Compensation of Officers

Matters related to resolutions at the general meeting of shareholders regarding remuneration, etc. of directors and auditors
Total compensation of directors is set by a resolution of the 90th Ordinary General Meeting of Shareholders, held on June 25, 2021, within a maximum annual limit of ¥600 million. Within this total, the total annual compensation of outside directors is set within a maximum annual limit of ¥50 million. This total compensation amount includes a restricted stock compensation plan and performance share unit (stock-based program linked to business performance). At present, there are 12 directors, including four outside directors. A resolution of the Ordinary General Meeting of Shareholders,held on June 28, 2018, set a maximum annual limit for total monetary compensation under the restricted stock compensation plan at ¥126 million, and a maximum annual limit for total monetary compensation claims and cash under the performance share unit (stock-based program linked to business performance) at ¥72 million.Compensation for Audit & Supervisory Board members is set by a resolution of the 90th Ordinary General Meeting of Shareholders, held on June 25, 2021, within a maximum annual limit of ¥80 million. At present, there are four Audit & Supervisory Board members, including two outside members.

Determination policy regarding the content of individual remuneration, etc. for directors

1. A.
   How to determine the decision policy
   At the board of directors meeting held on February 3, 2021, JACCS resolved on a policy regarding the determination of individual remuneration, etc. for directors.
2. B.
   Overview of the content of the decision policy
   

   • Compensation of executive directors
     Compensation of executive directors comprises basic compensation (cash compensation) and compensation linked to business performance (stockbased compensation).Basic compensation is determined based on the position held by eachdirector.
     The Company introduced a stock-based compensation program utilizing shares with restriction on transfer, and a performance share unit (stockbased program linked to business performance).
     The objectives of these programs are to provide a medium- to long-term incentive as well as create a compensation structure that further promotes shared value with shareholders, and thereby promote sustainable growth in corporate value.The performance share unit (stock-based program linked to business performance) grants shares and cash after the conclusion of a medium-term business plan, with performance evaluation ranks established based on the level of achievement of the medium-term business plan. The performance indicators targeted in the three-year medium-term management plan starting with fiscal year 2022 are consolidated operating revenue and consolidated ordinary income, which the Company has identified as important management indicators.
   • Compensation of outside directors
     Compensation of outside directors comprises basic compensation (cash compensation) only.
3. C.
   Reasons why the Board of Directors has determined that the content of individual remuneration, etc. for directors is in line with the determination policy When determining the content of individual remuneration, etc. for directors, the Compensation Advisory Committee reviews the original draft with the determination policy. The Board of Directors respects the content of the report and has determined that the content is in line with the decision policy.

Matters related to delegation regarding determination of individual remuneration, etc. of directors

1. A.
   Name, position, and responsibilities of the delegated person
   Chairman, CEO, and Representative Director Toru Yamazaki
   President, COO and Representative Director Ryo Murakami
2. B.
   Contents of the delegated authority and reason for delegating the authority
   The amount of remuneration for each individual director is determined based on the amount of basic remuneration (cash remuneration) according to the director's position and the evaluation of the director's duties. This is carried out by the Chairman and Representative Director and the President and Representative Director, who were delegated at the Board of Directors meeting held on June 29, 2019. The reason for delegating authority is that the Chairman and Representative Director and the President and Representative Director are the most suited to evaluate the duties of each Director while overseeing the Company's overall performance. Furthermore, the delegated representative director, chairman, and representative director and president must be determined in accordance with the contents of the report by the Compensation Advisory Committee.

Compensation of Audit & Supervisory Board members
Compensation of Audit & Supervisory Board members comprises basic compensation (cash compensation) only, and is determined after discussions by the Audit & Supervisory Board.

Amount of remuneration, etc. for directors and auditors

• 1.
  The amounts presented have been truncated to whole million-yen amounts.
• 2.
  The officers’ compensation presented in the above table includes that of four Director(including one outside director) Board member whose term of offi ce ended at the conclusion of the 91th Ordinary General Meeting of Shareholders, held on June 29, 2022.