P.33 Corporate Governance (Election, Dismissal and Remuneration of Officers)

33 Corporate Governance Election and Dismissal of Officers In accordance with the Articles of Incorporation, directors are elected by a majority vote at the General Meeting of Shareholders, where shareholders holding at least 1/3 of the voting rights are present. We do not use cumulative voting. The number of directors is limited to 10, with a 2-year term, building a structure that flexibly adapts to changes in the business environment. When selecting candidates, we comprehensively evaluate each individual's execution ability and expertise, regardless of gender, and appoint the right person to the right position to maintain governance quality. Through rigorous personnel evaluations at Management Meetings, we also develop next-generation management executives. CEO Succession Plan We develop next-generation management executives through rigorous personnel evaluations at Management Meetings. Director Remuneration Officer compensation consists of monthly remuneration, bonuses, and stock options. We set compensation levels based on internal standards by position, considering comparisons with other companies and performance. We pay only monthly remuneration to Outside Members of the Board of Directors and Audit & Supervisory Board Members to maintain independence. The Board of Directors determines compensation amounts within the range approved by the General Meeting of Shareholders. The Representative Director & CEO, who is best suited to evaluate performance and assigned departments, determines individual basic compensation for Directors. The annual compensation limit is 200,000 thousand yen for Directors and 50,000 thousand yen for Audit & Supervisory Board Members. Types of Remuneration and Calculation Methods Monthly remuneration is consolidated into a single director remuneration, and in principle, no other allowances are paid. Bonuses for directors are paid based on internal regulations according to their rank. We have introduced a stock option system as an incentive to boost motivation and morale for performance improvement, with the aim of enhancing corporate and shareholder value. The number of options granted is determined by considering factors such as future contributions to business growth. Remuneration for Audit & Supervisory Board Members is determined through discussions by the Audit & Supervisory Board within the scope of the resolution at the General Meeting of Shareholders. We aim to build a sound incentive function by combining performance-linked elements with linkage to medium- to long-term value enhancement. Training for Officers To ensure Outside Members of the Board of Directors and Outside Audit & Supervisory Board Members fulfill their roles, the General Affairs Department provides timely information and support. For important meetings such as the Board of Directors, the General Affairs Department, acting as the secretariat, distributes materials in advance and handles inquiries beforehand. To strengthen management monitoring and supervision, we invite external experts such as analysts and fund managers to hold lectures and exchange meetings, providing opportunities to deepen knowledge of capital market trends. Additionally, to maintain and improve compliance awareness, we conduct internal training, including insider trading prevention, to share the latest legal knowledge and high ethical standards.