Yamaha 2010 Annual Report Download - page 31

Japanese law, and has worked to enhance governance functions by
introducing an executive officer system, as well as by setting up Cor-
porate Governance Committees and an internal control system. These
actions, in conjunction with consistent audits conducted by the Com-
pany’s system of full-time auditors, combine to raise the effectiveness
of governance.
As of June 25, 2010, Yamaha has four auditors, including two
outside auditors. In principle, the Board of Auditors convenes once
monthly. Based on audit plans, auditors periodically perform compre-
hensive audits of all divisions and Group companies, and participate in
Board of Directors’ meetings and other important meetings such as
management councils. Yamaha has also established a Corporate
Auditors’ Office (with one staff member as of June 25, 2010) as a
dedicated staff for the auditors, to ensure an environment conducive
for performing effective audits.
With respect to accounting audits, the suitability of such audits is
determined based on periodic progress reports from the accounting
auditors of their audits of the Company’s financial statements.
The Internal Auditing Division (10 staff members as of June 25,
2010) is under the direct control of the President and Representative
Director. Its role is to closely examine and evaluate systems pertaining
to management and operations, as well as operational execution, for
all management activities undertaken by the Company and Group
companies from the perspective of legal compliance and rationality.
The evaluation results are then used to provide information for the
formulation of suggestions and proposals for rationalization and
improvement. In parallel, Yamaha strives to boost audit efficiency by
encouraging close contact and coordination among the corporate
auditors and the accounting auditors.
Registration of Independent Officers
Yamaha has registered outside director Haruo Kitamura and outside
auditor Kunio Miura as independent officers in accordance with the
stipulations of the Tokyo Stock Exchange.
Formulation of Policy
The policy on determining remuneration for directors is decided at a meeting of
the Corporate Officers Personnel Committee that included the outside directors.
The policy on determining remuneration for corporate auditors is decided at a
meeting of the Board of Auditors.
Content of Policy
(1) Remuneration for Directors
Remuneration to directors is to be decided based on the following standards,
taking into account compensation levels primarily at other listed companies
and employee treatment standards.
(i) Remuneration for directors other than outside directors is decided by
reflecting consolidated results and each director’s individual performance
into the annual base salary determined based on job responsibilities.
Specifically, depending on consolidated results and individual performance,
the annual base salary may be increased or decreased by up to 20%.
(ii) Remuneration for outside directors is not linked to business performance.
However, amounts are determined taking into account factors such as
balance with remuneration to other directors and the scale of Yamaha
Corporation’s business.
Fiscal 2010 Activities by Outside Director and Outside
Corporate Auditors
Outside director Takashi Kajikawa attended 13 of the 14 meetings of
the Board of Directors held in fiscal 2010. Utilizing his ample experi-
ence and considerable insight as a representative director of a publicly
owned company, he made necessary statements as appropriate
during the consideration of meeting agenda items.
Outside corporate auditor Kunio Miura attended 12 of the 14
meetings of the Board of Directors held in fiscal 2010. He also
attended 12 of the 15 Board of Auditors’ meetings, and made state-
ments mainly from his specialist standpoint as an attorney.
Outside corporate auditor Yasuharu Terai attended all 14 of the
meetings of the Board of Directors held in fiscal 2010. He also
attended all 15 Board of Auditors’ meetings, making statements based
primarily on his experience and insight as a management executive.
Outside corporate auditor Haruo Kitamura attended 10 of the 11
meetings of the Board of Directors held after his appointment. He also
attended all 10 of the Board of Auditors’ meetings held during his
term, and made statements based primarily on his experience and
insight as a chartered accountant.
Remuneration for Directors and Corporate Auditors
The aggregate amount of remuneration paid to directors and corpo-
rate auditors in fiscal 2010 is outlined below.
Directors: 12 persons, ¥276 million (including ¥5 million to 1 out-
side director)
Corporate Auditors: 5 persons, ¥74 million (including ¥18 million
to 3 outside corporate auditors)
Notes:
1. The remuneration amount stated above includes compensation paid to three directors who retired at the
conclusion of the 185th Ordinary General Shareholders’ Meeting held on June 25, 2009.
2. In addition to the abovementioned payments, retirement allowances amounting to a total of ¥356 million were
paid to three directors who retired at the conclusion of the 185th Ordinary General Shareholders’ Meeting held
on June 25, 2009. This was based on a resolution approved at the 182nd Ordinary General Shareholders’
Meeting held on June 27, 2006, regarding the lump-sum payment of retirement allowances to directors and
corporate auditors upon the abolition of the retirement allowance system.
The above amounts paid were calculated based on the term of office served by each director or corporate
auditor through June 30, 2006.
Policy on Determining Remuneration for Corporate Officers
(2) Remuneration for Corporate Auditors
Remuneration for corporate auditors and outside corporate auditors is not
linked to business performance. Amounts are determined through consultation
with the corporate auditors, taking into account factors such as balance with
remuneration to directors and the scale of Yamaha Corporation’s business.
(3) Bonuses
Yamaha pays bonuses to directors and corporate auditors. These bonuses,
which take into account corporate results, are separate from the remunera-
tion framework decided in advance at the General Shareholders’ Meeting,
and are paid with the approval of the Ordinary General Shareholders’ Meet-
ing. The amount paid to each director is determined through resolution of the
Board of Directors, and the amount paid to each corporate auditor is deter-
mined in consultation with the corporate auditors.
(4) Other
At the 182nd Ordinary General Shareholders’ Meeting held on June 27,
2006, a resolution was approved abolishing payment of retirement allow-
ances to directors (including outside directors) and corporate auditors
(including outside corporate auditors). Yamaha does not maintain a stock
option system.
Annual Report 2010 29
Corporate Governance