Olympus 2008 Annual Report Download - page 27

Appointment of Directors and Auditors
> Director appointments and dismissals are determined
at the General Meeting of Shareholders. The Board of
Directors selects candidates for the position of direc-
tor, passing its proposals to the General Meeting of
Shareholders for approval. Auditor appointments and
dismissals also require approval from the General Meeting
of Shareholders.
Director and Auditor Compensation
> Director compensation is determined by the Board of
Directors, depending on each director’s job description.
Olympus introduced a balance score card (BSC) system
and a performance-linked executive compensation
system based on the degree to which goals are achieved
in four categories: financial, customer service, business
operation process and growth potential. The total amount
of a director’s monthly compensation is approved by the
General Meeting of Shareholders, the Board of Directors
deciding on a figure for each director’s compensation that
falls within this amount. The cap on auditor compensation
is determined by a resolution by the General Meeting of
Shareholders.
Following a review of its compensation system for
directors and auditors carried out as a part of manage-
ment reforms, Olympus abolished its executive retirement
benefits system in June 2006.
Olympus does not exercise stock options. However,
all of its directors and executive officers, excluding
outside directors, possess the Company’s own shares
and constantly purchase them through the shareholders’
association. Olympus discloses information regarding
directors’ share ownership.
Anti-Takeover Measures
> Olympus introduced anti-takeover measures to prevent
large-scale purchases of the Company’s shares, which
would run counter to our corporate values and shareholder
interests. This is prior warning-type rights plan stipulates
a gratis issue of stock options in case of emergencies. In
order to make objective judgments concerning the positive
and negative aspects of anti-takeover measures, Olympus
established a Special Committee made up of three outside
directors, two outside auditors and one outside expert.
This committee is independent of the Company’s top
management.
Should a purchaser acquire over 20% of Olympus’
shares, the Company’s Board of Directors will make a
reasonable response to any offer after taking advice from
the independent Special Committee and will disclose
appropriate information in a timely manner. These anti-
takeover measures will be valid for three years and require
an approval from the General Meeting of Shareholders in
the event of renewal. Given these conditions, the mea-
sures do not undermine shareholder interests, nor were
they established to maintain the position of the Company’s
directors.
Company Spin-Offs
> To strengthen and improve the Imaging Systems and
Medical Systems Businesses, Olympus spun off both and
established Olympus Imaging Corp. and Olympus Medical
Systems Corp. in October 2004. Olympus has also imple-
mented company spin-offs at major overseas subsidiaries
to establish a globalized system, to enhance market
responsiveness tailored to the characteristics of each
business as well as to accelerate business operations.
Performance Indicator
> The Olympus Group has adopted the Olympus Value Added
(OVA) performance indicator. This enables the presentation
of business operation results in consideration of capital
cost. Consequently, Olympus OVA serves as a guideline
and indicator for the selection and concentration of busi-
nesses.
IR Activities
> Olympus proactively discloses information to fulfill its
corporate accountability, to ensure management transpar-
ency and in order for its stakeholders, including share-
holders, to gain a better understanding of and develop
trust for the Company. Several times a year, Olympus also
holds financial result meetings and business briefings,
in which the president or the director responsible gives
presentations to investors, analysts and members of the
press on management policies and business conditions.
Overseas, the Company commenced IR activities in the
early 1970s to provide opportunities to disclose informa-
tion to overseas investors. Since 2007, Olympus has been
joining forces with several major medical-related compa-
nies and holding briefings mainly for individual investors.
Olympus has provided details of its Corporate Strategic
Plan, financial results and presentation data, including
concurrent disclosure in both Japanese and English, on its
web site.
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