Toshiba 2014 Annual Report Download - page 63

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 effective
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 e ective 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 office as an executive officer, in
addition to the executive o cer compensation speci ed
in 2) below.
2) Executive o cer’s compensation
Executive o cer compensation is composed of the basic
compensation based on executive officer rank (e.g.
representative executive officer, president and chief
executive officer, representative executive officer,
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  uctuate
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.
3) Compensation standards
Compensation standards are determined at suitable levels
for a global company, with the aim of securing highly
competent management personnel. The compensation
standards of other listed companies and pay and bene ts
of employees are considered when determining the
Company’s compensation standards for management.
Compensation Policy
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 o er 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 officers, 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
request reports on the status of audits during the course of
each term, and explanations and reports on end-of-year
audits, as necessary.
Corporate Governance
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TOSHIBA Annual Report 2014