IWATA, February 10, 2022--Yamaha Motor Co., Ltd. (Tokyo: 7272) announced at the Board of Directors meeting held today that it would revise the amount of renumeration for directors and corporate auditors. The Board of Directors also resolved to replace the conventional restricted share remuneration system with no attached performance conditions with a performance-based shares remuneration system (hereinafter referred to as the "Performance Share system") where the number of shares to be granted will be determined in conjunction with the Company's Total Shareholder Return (TSR) performance.
For this revision of remuneration amounts and the new remuneration system for directors, a proposal will be submitted at the 87th Ordinary General Meeting of Shareholders scheduled to be held on March 23, 2022.
I. Objectives of the revision for the remuneration system for directors and corporate auditors
Yamaha Motor has repeatedly deliberated on the ideal remuneration system to enhance the connection with corporate value over the medium to long term at the Executive Personnel Committee, composed primarily of independent outside directors. As a result, in order to strongly promote our company-based efforts to solve materiality (important societal issues) and realize the sustainable creation of corporate and brand value, the Company has decided to expand its performance-based remuneration and introduce performance indicators related to materiality and TSR in line with the start of the new Medium-Term Management Plan in 2022. In addition, it was determined that the base remuneration of Yamaha Motor's outside directors and corporate auditors should be revised upward due to the business environment becoming more complex and diverse, along with the increasing burden of roles and job performances expected of outside directors and corporate auditors.
II. Revision of remuneration amounts for directors
Currently, remuneration for Yamaha Motor directors consists of base remuneration (fixed remuneration), performance-based remuneration, and share-based remuneration.
Of the above three, base remuneration (fixed remuneration) was approved to be up to 500 million yen per year at the 84th Ordinary General Meeting of Shareholders held on March 27, 2019 (of which up to 100 million will be paid annually for outside directors). As part of the continuous review of the remuneration system for directors, base remuneration (fixed remuneration) takes into consideration the expansion of expertise and diversity, and the increase in expected roles of directors in order to improve management governance. Yamaha Motor therefore plans to propose that annual remuneration be up to 600 million yen (of which up to 200 million yen for outside directors) at the next Ordinary General Meeting of Shareholders.
For outside directors, Yamaha Motor will continue to pay only base remuneration, which is at a fixed rate. As in the past, for directors who work concurrently as employees, the remuneration amount shall not include the employee salary. In addition, with regards to performance-based remuneration, as in the past, performance-based bonuses linked to individual director performance will be up to 100 million yen per year. Companywide performance-based bonuses that reflect short-term companywide consolidated performance will be paid within the 0.5% range of the net income attributable to owners of parent from the previous consolidated fiscal year.
III. Revision of remuneration for corporate auditors
At the 84th Ordinary General Meeting of Shareholders held on March 27, 2019, the amount of remuneration for corporate auditors was approved to be up to 120 million yen per year. However, in consideration of the fact that the level of expertise and range of responsibilities expected of corporate auditors has been increasing, Yamaha Motor plans to propose that the annual remuneration amount be up to 200 million yen at the next Ordinary General Meeting of Shareholders. Individual remuneration will be determined through discussions with each corporate auditor within the range of the above remuneration amount.
IV. Introduction of a Performance Share system for directors
As part of the continuous review of the remuneration system for directors, Yamaha Motor will promote further value-sharing between our directors and shareholders. Also, regarding share remuneration for directors, in aiming to provide appropriate incentives for the sustainable improvement of our medium- to long-term corporate value, a revision will be implemented to change from the conventional system of remuneration of shares with restriction on transfer with no attached performance conditions to a system of performance-based remuneration of shares with restriction on transfer that determines the number of shares to be granted in conjunction with the Company's TSR performance.
Along with this revision, the former share remuneration resolution will be abolished and directors excluding outside directors (hereinafter "Applicable Directors") will be provided remuneration in a separate frame from the remuneration amount in the above "II. Revision of remuneration amounts for directors" for the granting of shares with restriction on transfer based on the Performance Share system. The Company plans to ask all shareholders for their approval of the following:
•As an appropriate monetary amount and number of shares for the above purpose and based on the Performance Share system, the total amount of monetary remuneration receivables to be paid to Applicable Directors for the granting of shares with restriction on transfer is to be up to 600 million yen per year.
•The total number of Yamaha Motor's common shares issued to or disposed of for Applicable Directors is to be up to 300,000 shares per year.