Directors’ Compensation

Basic policy on executive compensation

The Board of Directors of Yaskawa determines the compensation policy for Directors (excluding Audit and Supervisory Committee Members.)
As a basic policy, for the purpose of continuous enhancement of corporate value and enhancement of competitiveness, the remuneration level of Yaskawaʼs officers shall be such that excellent human resources can be secured, and the incentive for short-term, medium- to long-term performance improvement shall function.
The basic policy for performance-linked compensation is as follows.

・Single-year compensation
In order to raise awareness of continuous profit improvement for the entire company, compensation will be provided according to profit performance in the previous fiscal year.

・Medium- to long-term compensation
Raise awareness of improving corporate value over the medium to long term and share benefits with stakeholders.

Remuneration to Directors (Excluding Audit and Supervisory Committee Members)

①Basic compensation

The maximum amount of basic remuneration for Directors shall be a fixed limit of 430 million yen or less.

・Directors (excluding Outside Directors)
A certain amount will be provided according to the performance evaluation and position of each director as he/she is responsible for improving corporate value.

・Outside Director
A fixed amount will be provided in advance for the responsibility of supervising the execution of duties.

②Performance-linked compensation (single-year compensation)

・Directors (excluding Outside Directors)
The maximum amount of performance-linked compensation shall be 1.0% or less of the consolidated net income of the fiscal year prior to the General Meeting of Shareholders appointed or reappointed, in order to more clearly link compensation to consolidated performance. The amount of remuneration for each director is calculated by taking into account the relative results of Yaskawa from standard deviations with respect to operating profit, operating profit growth rates and ROA performance of other companies in the same industry.

・Outside Director
Performance-linked compensation is not provided.

③Stock compensation (medium- to long-term compensation)

・Directors (excluding Outside Directors)
The evaluation indices used to calculate stock-based compensation in mid-term business plan “Challenge 25 Plus” from FY2021 to FY2022 are as follows. The stock compensation is calculated by multiplying the performance factor according to the target value of each evaluation index.

Evaluation Indicators and Formulas for Stock Compensation for Directors (Excluding Outside Directors)

Evaluation Indicators and Formulas for Stock Compensation for Directors (Excluding Outside Directors)

Target

Target

(a) Base amount by rank

In light of the size and responsibilities of the areas in which Directors are responsible and their contribution to Group management, the Company sets the base amount according to their positions after deliberation by the Compensation Advisory Committee.

(b) Operating profit amount (fiscal year concerned)

Evaluations are based on operating profit values for each fiscal year of the mid-term business plan “Challenge 25 Plus” from FY2020 to FY2021. From the time of exceeding the results of the previous fiscal year, evaluation is conducted by a certain coefficient, and the coefficient is set higher after achievement of the target originally planned for the fiscal year. By doing so, we aim to increase the motivation of directors to achieve the plan and to maintain their willingness to take active measures after achieving the plan.

Evaluation image

Evaluation image

(c) Operating profit ratio (fiscal year concerned)

The evaluation is based on the degree of achievement of operating profit ratio for the purpose of securing high competitiveness and growing into a highly profitable company.

(d) Achievement level of ROIC (fiscal year concerned)

To motivate Directors to improve capital efficiency and profitability, we evaluate directors according to their degree of achievement of ROIC.

(e) Comparison of TSR (total shareholders return) with TOPIX (fiscal year concerned)

Evaluations are conducted according to the degree of achievement of TSR with the aim of motivating directors to increase corporate value from the shareholdersʼ point of view.

(f) Achievement level of CO2 emissions reduction through Yaskawa products (fiscal year concerned)

In order to realize sustainable corporate activities and respond to social issues, Yaskawa evaluates the achievement of CO2 emission reduction targets through its products.

Evaluation Indicators for Stock Compensation for Outside Directors

It is based on the indicator and amount of Directors who are Audit and Supervisory Committee members. (non-performance-linked)

Composition of compensation for Directors (Excluding Audit and Supervisory Committee Members)

Composition of compensation for Directors (Excluding Audit and Supervisory Committee Members)

Policy on the proportion of each remuneration

・Directors (excluding Outside Directors)
Performance-linked compensation (single-year compensation) and stock compensation (medium- to long-term compensation) shall be designed without upper limit so that any improvement in performance is returned as compensation. Therefore, if the performance of the indicators used as the basis for calculation is favorable, the ratio of basic remuneration will be relatively small, whereas if the performance of the indicators used as the basis for calculation is unfavorable, the ratio of basic remuneration will be relatively large.

・Outside Director
From the perspective of independence, performance-linked compensation is not provided, and basic compensation and non-performance-linked stock compensation only when performance targets are achieved are provided. The composition of compensation for Outside Directors is as follows.

(a)
In the event that stock compensation does not accrue
Basic compensation: Stock-based compensation = 100%: 0%
(b)
When stock compensation is generated (when stock compensation is maximum)
Basic compensation: Stock-based compensation = 75%: 25%

Remuneration of Audit and Supervisory Committee members

①Basic compensation

The maximum amount of basic remuneration for Audit and Supervisory Committee members shall be a fixed limit of 150 million yen or less.

②Stock compensation

In light of the situation in which the Audit and Supervisory Committee members, in addition to the function of supervising business execution, are responsible for monitoring management execution, etc. to ensure the achievement of mid-term business plan, remuneration will be paid on the premise of mid-term business planʼs achievement. In order to share value with shareholders, this remuneration is a stock-based remuneration. The number of shares to be paid to Audit and Supervisory Committee members is not linked to business performance, and the value of the remuneration is linked only to Yaskawa Stock Price, thereby eliminating the impact on the Audit and Supervisory Committee membersʼ function of supervising business execution.

Methods of Determining Directors’ Compensation

Yaskawa Electric has established the Compensation Advisory Committee as an advisory body to ensure the appropriateness and transparency of remuneration for directors (excluding Audit and Supervisory Committee Members) and executive officers through fair deliberations.

The remuneration of Audit and Supervisory Committee Members is determined through discussions of the Audit and Supervisory Committee.

Total Amount of Compensation, etc. by Director Category, Total Amount of Compensation, etc. by Type, and Number of Applicable Directors (FY2020)

Director category No. of directors Total amount of compensation (millions of yen)
Basic compensation Performance-linked compensation Stock-based compensation
Directors
(excluding Audit and Supervisory Committee Members)
6 396 267 129
Directors who are Audit and Supervisory Committee Members
(excluding outside directors)
2 61 61
Outside directors 5 63 63

(Note)The above includes 1 Director who is an Audit and Supervisory Committee Member who retired at the conclusion of the 104th Annual General Shareholders Meeting held on May 27, 2020 and 1 Director (who is not an Audit and Supervisory Committee Member) who retired on June 4.

PAGE TOP

YASKAWA uses Google Analytics to collect information about its users. If you don't want this, you can disable it by clicking here.