Remuneration for directors of the Company is determined by the Board of Directors in accordance with the system and standard discussed in and reported by the Corporate Governance Committee based on the Director Remuneration Policy described below.

Policy for determining amounts of compensation, etc. for directors or method for calculating them, and how to determine them

The basic policy for determining directors’ remuneration has the criteria of maintaining and increasing the corporate value of the AUTOBACS Group, which comprises a franchise system, and securing human resources capable of effectively supervising the Company’s business operations as directors of the Company.

The remuneration standard is based on the results of third-party surveys on executive remuneration and takes into account such factors as the Company’s position in the industry, the difficulty of achieving targets, and responsibilities.

Remuneration for the Company's directors (excluding outside directors and directors who are audit and supervisory committee members) consists of fixed remuneration (monetary remuneration and stock remuneration). The ratio of monetary remuneration to stock remuneration in fixed remuneration is 2 to 1 for the Representative Director and 7 to 3 for directors. For outside directors and directors who are audit and supervisory committee members, fixed remuneration (monetary remuneration) set for each role is paid.

 

1. Fixed remuneration (monetary remuneration)
Determined based on the basic remuneration as a director and the remuneration for other delegated duties set according to individual roles.
 

2. Fixed remuneration (stock remuneration)
Restricted stock issued in advance at a face value set according to each individual role, with the aim of improving medium- to long-term performance and corporate value and further sharing value with shareholders.

Remuneration for directors in charge of the execution of duties among the Company’s directors (excluding outside directors and directors who are audit and supervisory committee members) consists of fixed remuneration (items 1. and 2. above) for directors as well as of fixed remuneration (monetary remuneration), variable remuneration (monetary remuneration) and variable remuneration (stock remuneration) as types of remuneration for the execution of duties.

The percentages set for fixed remuneration (monetary remuneration), variable remuneration (monetary remuneration), and stock remuneration (fixed and variable remuneration) for the Company’s directors are roughly 48%, 32%, and 20%, respectively, in the case of Representative Director & Chief Executive Officer. The percentage of variable remuneration will become higher in proportion to the ranks of executive directors.

 

3. Fixed remuneration (monetary remuneration)

The scope of control and responsibility for the execution of duties, degree of influence on the management of the consolidated Group, and achievement in the previous year are considered to determine fixed remuneration from the remuneration table.

 

4. Variable remuneration (monetary remuneration)

The achievement of a single-year consolidated operating profit target is set as a payment condition common to all eligible executive directors. The amount varies between 0 and 150% of the performance based remuneration standard depending on the degree of achievement of the following targets: financial performance figures such as ordinary profit targets for all businesses and each area of responsibility, and an individual assignment based on a strategic target including a medium- to long-term perspective, which cannot be measured by financial performance figures alone.

 

5. Variable remuneration (stock remuneration)

To improve performance and corporate value over the medium and long term and better share value with shareholders, restricted stock (performance-based stock remuneration) is issued in advance linked with the achievement of single-year performance targets in the amount specified according to individuals’ roles.

1. Remuneration for the Company’s directors (excluding outside directors and directors who are audit and supervisory committee members) is determined at the Board of Directors’ meeting, within the limit of the amount of remuneration resolved in advance at a general meeting of shareholders, along with the remuneration system that ensures objectivity and transparency through consultation with the Corporate Governance Committee.
    

2. Remuneration for the execution of duties by the Company’s directors is determined by the chief executive officer, based on the remuneration system for the execution of duties determined at the Board of Directors’ meeting after consultation with the Corporate Governance Committee and is in conformity to the remuneration policy decided by the Board of Directors.
    

3. The Company received the opinion from the Audit and Supervisory Committee that the contents of remuneration, etc. payable to directors (excluding directors who are audit and supervisory committee members) are considered to be reasonable because the director remuneration policy, the system profile and the procedure for determining the remuneration, etc. were appropriate and the amounts of remuneration, etc. payable to each director are consistent with the roles, duties, and achievements of each director.
    

4. Remuneration for the Company’s directors who are audit and supervisory committee members is determined following deliberations by audit and supervisory committee members at a meeting of the Audit and Supervisory Committee within the limit of the amount of remuneration resolved in advance at a general meeting of shareholders.

At a Board of Directors meeting, with the objective of continuing to improve its corporate value and share value with shareholders in line with the medium- to long-term performance targets under its business strategies and the Medium-term Business Plan, the Company resolved to introduce a mediumto long-term performance-linked remuneration system for directors charged to execute duties among the Company’s directors (excluding outside directors and directors who are audit and supervisory committee members) with payment being premised on achieving the operating profit target in the 2024 Medium-term Business Plan “Accelerating Towards Excellence.” Performance evaluation targets the Medium-term Business Plan period, three years from the fiscal term ended March 31, 2025 to the fiscal term ending March 31, 2027.