Corporate Governance Compensation
Corporate Governance Compensation
Executives eligible for the executive compensation system
| ▪The Company’s Directors and Audit & Supervisory Board members : | The following executive compensation system is applied. |
| ▪The Company’s executive officers (who do not concurrently serve as directors): | Basically the same executive compensation system as that for the Company’s Directors is applied. |
| ▪Presidents of the operating companies of the Company : | In light of the fact that they are responsible for increasing the corporate value of the Panasonic Group, the compensation system for the Presidents is similar to that of the Company’s Directors |
- The Company’s Directors and Audit & Supervisory Board members :
The following executive compensation system is applied. - The Company’s executive officers (who do not concurrently serve as directors):
Basically the same executive compensation system as that for the Company’s Directors is applied. - Presidents of the operating companies of the Company :
In light of the fact that they are responsible for increasing the corporate value of the Panasonic Group, the compensation system for the Presidents is similar to that of the Company’s Directors
All the executive compensation systems are discussed by the Nomination and Compensation Advisory Committee.
Overview of the executive compensation system
Relative size of compensation for Representative Director, President
Relative size of compensation for Representative Director, President
Performance-based compensation
The amount of performance-based compensation paid varies according to the financial and non-financial evaluation elements. Both the short term and mid-long term incentive are designed in such a manner that the target annual amount (100%) is paid when the individual director’s targets are achieved.
- The weight of the financial elements is higher for the Representative Director and President than any of the other directors, given the magnitude of his/her responsibility for consolidated business performance (1).
- The range of the financial elements for the mid-long term incentive has been raised to a range from 0% (min.) to 450% (max.) (2) to encourage Directors to aim for an even higher target beyond simply achieving the mid-long term plan’s targets.
Non-financial items are set in light of important assignments to each role and each job duty (presented below are some of the specific indicators).
- Elimination of serious accidents and promotion of strict compliance: The number of serious accidents, the number of serious compliance issues
- Environmental contribution: CO2 reduction in our value chains
- Human resources strategies: The results of employee opinion surveys, the percentage of women in high-ranking positions (promotion of Diversity, Equity & Inclusion)
- Operation KPIs relating to enhancement of competitiveness: Strengthening of procurement and logistics capabilities, DX of business processes, increases in the number of patents
- Effort to raise the level of group management: Propagation and practice of the Basic Business Philosophy, management based on design thinking, improvement of brand recognition
Process for determining the amount of compensation
The optional Nomination and Compensation Advisory Committee, majority-staffed and chaired by independent Outside Directors, deliberates on the appropriateness of the Company’s policy and system for determining compensation of Directors and reports the results to the Board of Directors. The Board of Directors makes a resolution on the policy for determining the compensation based on the report.
As to the annual amounts of base salary and incentive pay to be paid and the annual number of shares to be allocated to each recipient as restricted stock compensation, the Nomination and Compensation Advisory Committee examines whether these amounts and numbers are appropriate in light of the policy for determining the compensation and reports the results to the Board of Directors. The Board of Directors has left the determination on the compensation solely to the Representative Director, President and Chief Executive Officer of the Company, who objectively comprehends and supervises overall business execution of the Panasonic Group. As the Representative Director, President and Chief Executive Officer of the Company determines the details of base salary, incentive pay, and restricted stock compensation to each recipient in accordance with the results of deliberation at the Nomination and Compensation Advisory Committee, the Board of Directors believes this decision is in line with the policy for determining compensation.
