Integrated Report 2021(For the year ended December 31, 2020)

Remuneration System for Executives Remuneration for directors and executive officers is composed of base compensation (monthly fixed remuneration), performance-based com-pensation, and share-based compensation. For the president and repre-sentative director, the ratios of base compensation, performance-based compensation, and share-based compensation are set at roughly 50%, 30%, and 20% of the base amounts, respectively. Ratios of compensa-tion for other directors and executive officers are determined based on the compensation for the president and representative director in consid-eration of their responsibilities, remuneration levels, and other factors, with an upper limit of 60% set for the ratio of base compensation. As the role of outside directors and outside Audit & Supervisory Board members is to provide supervision and advice regarding management from an objective and independent perspective, they are only paid a fixed base compensation.In order to ensure the appropriateness as well as the transparency and feasibility of the deliberation process regarding items relating to executive remuneration, the Executive Personnel Committee voluntarily established by the Company conducts pertinent examinations and reports its findings to the Board of Directors. The remuneration amounts for directors and other executives are decided at Board meetings based on these reports, but the representative director is responsible for deciding the distribution of Companywide performance-based bonuses based on the coefficients in place for each executive position. In addition, Audit & Supervisory Board members discuss and determine the specific amounts of their base compensation. Basic Policy• To be a Kando Creating Company, Yamaha Motor encourages its executives to the maximum extent possible to perform their duties in accordance with its Management Principles and Action Guidelines.• Toward realizing the Company’s Long-Term Vision, executive remuneration shall offer strong motivation for achieving management targets in the Medium-Term Management Plan and other plans. • In order to function as a healthy incentive for achieving the sustainable growth of the Company, the ratio of remuneration linked to short-term results and performance of duties (performance-based compensation) and the ratio of remuneration linked to medium- to long-term results and corporate value (share-based remuneration) shall be set at an appropriate level.• Remuneration amounts shall be set at a level capable of securing and retaining outstanding human resources suitable for the roles and respon-sibilities to be carried out by the Company’s executives. Remuneration StructureBase CompensationAn annual base compensation is set for each executive position, one-twelfth of which is paid in cash on a monthly basis.Performance-Based CompensationThe representative director shall only be paid the Companywide performance-based bonus. Performance-based compensation for other directors and executive officers shall comprise a Companywide perfor-mance-based bonus and an individual performance-based bonus. The total amount of the Companywide performance-based bonus for directors shall be payable up to 0.5% of the net income attributable to owners of parent recorded in the previous fiscal year. The individual performance-based bonus will be determined within the scope of 0–2 times the base amount stipulated for each executive position, taking into account the degree of progress in achieving various predetermined evaluation indicators.Share-Based CompensationWith the aim of encouraging executives to share a common interest with shareholders and achieve sustainable improvements in corporate value, the Company shall issue restricted stock once a year in accordance with the base amount stipulated for each executive position. Executives are not able to transfer, establish security interests in the issued shares, or dispose in any other way of the issued shares until resigning from their position as a director or other positions held. Cross-Shareholdings Yamaha Motor conducts development, procurement, production, and sales globally, and we believe that strengthening the business relation-ships with our partners and maintaining stable relationships with finan-cial institutions and other parties are necessities for achieving sustainable growth going forward. In considering our business strategies, business relationships with our partners, the reinforcement of our financial foun-dations, and other factors, we hold cross-shareholdings only when it is deemed necessary and appropriate in order to enhance corporate value from a medium- to long-term perspective.The Board of Directors examines each cross-shareholding annually to determine whether the purpose of the shareholdings is appropriate, if the benefits and risks associated with the shareholdings are commensu-rate with capital costs, among others. The Board of Directors then appro-priately discloses a summary of the results. In addition, Yamaha Motor upholds a policy to reduce cross-shareholdings if, as an outcome of the examination, the shareholdings cannot be justified. Based on this policy, in fiscal 2020 the Board of Directors verified the appropriateness of holding certain individual stocks and the Company sold a portion of its cross-shareholdings. Shareholdings of Yamaha CorporationYamaha Motor was established by spinning off the motorcycle division from Nippon Gakki Co., Ltd. (currently Yamaha Corporation). Today, the two companies’ management is conducted separately, with both using the same Yamaha brand. We are undertaking various measures in col-laboration with Yamaha Corporation through the Joint Brand Committee and under the Yamaha Brand Charter and Joint Brand Regulations. Both companies appropriately monitor measures for mutual sustainable growth through shareholdings and by dispatching directors. We believe that maintaining and improving the shared value of the Yamaha brand by building a relationship of monitoring and collaboration with Yamaha Corporation will contribute to the medium- to long-term enhancement of Yamaha Motor’s corporate value.66Corporate Governance Yamaha Motor Co., Ltd. Integrated Report 2021

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