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Lion has designed a corporate officer compensation system to provide sound and appropriate incentives necessary for retaining outstanding management talent that will achieve the Company’s management policies and continuously increase its corporate value over the medium to long term. Director and Audit & Supervisory Board member compensation is decided by the Board of Directors and the Audit & Supervisory Board, respectively, based on consultations with the Compensation Advisory Committee. Compensation is set within the limits decided by resolution of the General Meeting of Shareholders.
Compensation for directors (excluding external directors) consists of fixed monthly compensation and performance-linked compensation (bonuses and stock-based compensation). It is made up of approximately 50% fixed compensation and 50% performance-linked compensation (30% of which is bonus and 20% stock-based compensation), according to the director’s rank. The proportion of performance-linked compensation increases according to rank and is revised as needed.
Among performance-linked compensation, bonuses are calculated based on a standard bonus amount determined by position and performance, factoring in 30% of individual performance assessments (evaluated according to management supervision, performance in execution of duties, and contribution to Sustainability Material Issues), paid individually. Stock-based compensation is evaluated with points based on the achievement of annual targets, with shares equivalent to the accumulated points granted upon retirement.
| Type | Determining Policy | Upper Limit |
|---|---|---|
| Overview |
|
¥500 million (of which up to ¥150 million for external directors) per fiscal year |
| Type | Performance-Linked Bonus | Performance-Linked Stock-Based Compensation |
|---|---|---|
| Indicators |
(1) Core operating income (2) Profit for the period attributable to owners of the parent |
(1) Performance indicators |
| Payment amount |
(1) Calculation of base bonus amount by position: the sum of (a) and (b) below multiplied by the position-based coefficient (2) Individual performance assessments (3) Individual payment amount |
(1) Calculation of number of points
(2) Total points awarded per individual (number of shares) |
| Time of payment | End of March of each year | In principle, shares are issued to directors upon retirement in a number equivalent to the total number of points they have been assigned |
| Upper limit | ¥400 million per fiscal year | ¥300 million (per fiscal year) Total number of shares.: 270,000 (per fiscal year) |
| Clawback clause | No | Yes* |
*In the event of a serious violation of internal rules or professional duties, forfeiture of points already granted or return of the amount equivalent to the shares already received
Achievement of targets for core operating income and profit for the period attributable to owners of the parent are as below.
| Indicator | Target | Achievement | Achievement rate |
|---|---|---|---|
| Core operating income | ¥30,000 million | ¥30,760 million | 103% |
| Profit for the period attributable to owners of the parent | ¥25,000 million | ¥27,587 million | 110% |
| ROIC | 6.1% | 6.7% | 110% |
Compensation for external directors and Audit & Supervisory Board members consists solely of fixed monthly compensation. Compensation levels are set taking into consideration similar levels at other companies and are based on individual roles and responsibilities.
| Number of Corporate Officers | Fixed Compensation (Millions of yen) |
Performance-Linked Compensation | Total (Millions of yen) |
||
|---|---|---|---|---|---|
| Bonuses (Millions of yen) |
Stock-Based Compensation (Millions of yen) |
||||
| Directors (External Directors) | 14 (5) | 302 (76) | 163 (–) | 97 (–) | 563 (76) |
| Audit & Supervisory Board Members (External Audit & Supervisory Board Members) | 7 (5) | 104 (41) | – (–) | – (–) | 104 (41) |
| Total (External Officers) | 21 (10) | 406 (118) | 163 (–) | 97 (–) | 667 (118) |
1.There are no individuals serving concurrently as employees and corporate officers.
2.An upper limit on directors’ fixed compensation of ¥500 million (of which up to ¥150 million for external directors) per fiscal year was set by resolution of the 164th Annual Meeting of Shareholders held on March 28, 2025. There were eleven directors at the closing of this meeting.
3.An upper limit on Audit & Supervisory Board members’ fixed compensation of ¥200 million per fiscal year was set by resolution of the 164th Annual Meeting of Shareholders held on March 28, 2025. There were five Audit & Supervisory Board members at the closing of this meeting.
4.Within performance-linked compensation, bonus amounts are calculated and determined based on the core operating income and the profit attributable to the owners of the parent for each year with consideration of individual performance, in accordance with the methods described above. An upper limit for bonuses of ¥400 million per fiscal year was set by resolution of the 164th Annual Meeting of Shareholders held on March 28, 2025. There were six directors (excluding external directors) at the closing of this meeting.
5.Within performance-linked compensation, stock-based compensation is the amount obtained by using the share acquisition price to convert the number of points (shares) granted to eligible individuals under the system, depending on the degree of achievement of the Group’s business targets and progress in initiatives aimed at top- priority Sustainability Material Issues for the fiscal year. An upper limit of ¥300 million on the contribution amount of stock-based compensation per fiscal year and an upper limit of 270,000 shares on the total number of shares granted per fiscal year were set by resolution of the 164th Annual Meeting of Shareholders held on March 28, 2025. There were six directors (excluding external directors) at the closing of this meeting.
6.The amounts shown are rounded down to the nearest million yen.