Toshiba 2013 Annual Report Download - page 50

Compensation policy
The Compensation Committee establishes compensation
policy regarding compensation of each director and/or
executive o cer as follows.
Since the main responsibility of directors is to
supervise the execution of the overall Group’s business,
compensation for directors is determined at an adequate
level to secure highly competent personnel and to ensure
e ective operation of the supervisory function.
Since the responsibility of executive officers is to
increase corporate value in their capacity as executives
responsible for companies or divisions within the Group,
compensation for executive officers is divided into fixed
compensation and performance-based compensation, and
determined at an adequate level to secure highly
competent personnel and ensure their compensation
package functions as an effective incentive to improve
business performance.
1) Director’s compensation
Fixed compensation is paid to directors who do not
concurrently hold office as an executive officer, and is
based on status as a full-time or part-time director and on
the duties performed.
The fixed compensation is paid to directors who
concurrently hold o ce as an executive o cer, in addition
to the executive o cer compensation speci ed in 2) below.
2) Executive o cer’s compensation
Executive officer compensation is composed of the basic
compensation based on executive officer rank (e.g.
representative executive officer, president and chief
executive o cer, representative executive o cer, corporate
senior executive vice president) and the service
compensation calculated according to the duties of the
executive o cer. Some 40-45% of the service compensation
will fluctuate from zero (no compensation) to 2 times
according to the year-end performance of the Company or
of the division for which the executive o cer is responsible.
Compensation Policy and
Amount of Compensation
The effective period of the plan for countermeasures to
large-scale acquisition of shares in the Company, which was
adopted in 2006 and renewed in 2009, was renewed and
approved again at the ordinary meeting of shareholders on
June 22, 2012.
The plan protects the Company's corporate value and
the common interests of its shareholders by defining
procedures to be followed in the event of any large-scale
acquisition of the Company's shares. It ensures that
shareholders receive all necessary information and the
time required to make appropriate decisions, and also
secures for the Company the opportunity to negotiate with
the acquirer.
Specifically, if an acquirer commences or plans to
commence an acquisition or a tender offer that would
result in the acquirer holding 20% or more of the shares
issued by the Company, the Company will require the
acquirer to provide the necessary information to the Board
of Directors in advance. The Special Committee, which
consists solely of outside directors who are independent
from the Company's management, may, at its discretion,
obtain advice from outside experts, evaluate and consider
the details of the acquisition, disclose to the Company's
shareholders the necessary information, evaluate, consider
and disclose any alternative proposal presented by the
Company's representative executive o cers, and negotiate
with the acquirer. If the acquirer does not comply with the
procedures under the Plan, or the acquisition would
damage the corporate value of the Company or the
common interests of its shareholders, and if the acquisition
satis es the triggering requirements set out in the Plan, the
Company will implement countermeasures (allotment of
stock acquisition rights with (a) an exercise condition
whereby the acquirer, etc., cannot exercise the rights
(except where an exceptional event occurs) and (b) an
acquisition provision to the e ect that the Company may
acquire the stock acquisition rights in exchange for the
Company's shares from persons other than the acquirer,
etc., by means of a gratis allotment of stock acquisition
rights (shinkabu yoyakuken no mushou wariate)) and protect
the corporate value of the Company and the common
interests of its shareholders.
Takeover Defensive Measures
Corporate Governance
48 TOSHIBA Annual Report 2013