Updated June 27, 2024
Organizational form：Company with auditors
■ Outside Director
Mr. Yasuyuki Ohira comes from Sapporo Holdings Ltd.
Mr. Hideaki Shinada comes from Ajinomoto AGF, Inc.
■ Voluntary committee (Members / Chairperson)
| Voluntary committee equivalent to Nominations Committee |
Voluntary committee equivalent to Remuneration Committee |
|
| Name | Nominations and Remuneration Committee |
Nominations and Remuneration Committee |
| Members | 3 | 3 |
| Full-time members |
0 | 0 |
| Internal directors |
1 | 1 |
| Outside directors |
2 | 2 |
| External professionals, |
0 | 0 |
| Others | 0 | 0 |
| Chairperson | An outside director | An outside director |
■ Supplementary explanation
Regarding the roles of the committees and the policy on independence regarding the composition of the committees, please refer to the content described in [II. Management Organization for Operational Decision-Making, Execution, and Supervision, and Other Corporate Governance Structures] → [2. Functions Including Business Execution, Audit, Supervision, Appointments, and Remuneration Determination (Outline of Current Corporate Governance Systems)].
■ Collaboration among statutory auditors, accounting auditor, and internal audit division
The accounting auditor reports to the statutory auditors on audit plans and results, and both parties exchange views in an effort to achieve efficient and effective audits. The statutory auditors and the Internal Audit Office collaborate and exchange information quarterly and as required.
■ Outside Statutory Auditor
Mr. Tomonori Ito comes from The Bank of Yokohama, Ltd.
Mr. Nobutaka Kanaji comes from T-Gaia Corporation
■ Principal activities of Outside Director and Outside Statutory Auditors (FY 2023)
| Category | Name | Summary of attendance, participation and expected roles |
|---|---|---|
| Director | Yasuyuki Ohira | Mr. Ohira has attended all 19 meetings of the Board of Directors during the fiscal year. He adequately performed the role required of an outside director with activities including stating many opinions that used his extensive knowledge of all aspects of management acquired through long experience in the engineering division at a company in a different industry and serving as the head of the production technology division and research and development division and the president of a group company. In addition, he attended all 3 meetings of the Nominations and Remuneration Committee and all 7 meetings of the Business Monitoring Committee. and was chairman of both committees, which are voluntary advisory committees for the Board of Directors. Mr. Ohira used his independent and objective perspective to play a central role in the oversight function concerning the selection of director and statutory auditor candidates and the determination of terms for business transactions with Nissan Motor Co., Ltd. |
| Director | Hideaki Shinada | Following his election on June 28, 2023 as a director, Mr. Shinada has attended all 15 meetings of the Board of Directors during the fiscal year. He adequately performed the role required of an outside director with activities including stating many opinions that used his extensive knowledge concerning corporate management and corporate governance through his many years of experience at a company in a different industry. In addition, he attended all 2 meetings of the Nominations and Remuneration Committee and all 5 meetings of the Business Monitoring Committee during the fiscal year from June 28, 2023 onwards as a member of these committees, which are voluntary advisory committees for the Board of Directors. Mr. Shinada used his independent and objective perspective to perform the oversight function concerning the selection of director and statutory auditor candidates and the determination of terms for business transactions with Nissan Motor Co., Ltd. |
| Statutory Auditor |
Tomonori Ito | Mr. Ito attended all 19 meetings of the Board of Directors and all 13 meetings of the Board of Statutory Auditors during the fiscal year. He performed the role required of an outside statutory auditor by using his many years of financial institution management experience and extensive knowledge of finance and accounting to provide advice. In addition, Mr. Ito attended all 7 meetings of the Business Monitoring Committee during the fiscal year as a member of this committee, which is a voluntary advisory committee for the Board of Directors. At this committee, he performed the functions of an outside statutory auditor by making statements from an independent and objective perspective concerning the determination of terms for business transactions with Nissan Motor Co., Ltd. |
| Statutory Auditor |
Nobutaka Kanaji | Following his election on June 28, 2023 as a statutory auditor, Mr. Kanaji attended 15 meetings of the Board of Directors and all 10 meetings of the Board of Statutory Auditors during the fiscal year. He has extensive knowledge of all aspects of corporate management because he was involved in the information and communications field over many years at a company in a different industry, and subsequently oversaw a variety of business divisions, including each of the sales divisions and the corporate division, etc. He performed the role required of an outside statutory auditor by using this extensive knowledge to provide advice. In addition, Mr. Kanaji attended all 5 meetings of the Business Monitoring Committee during the fiscal year from June 28, 2023 onwards as a member of this committee, which is a voluntary advisory committee for the Board of Directors. At this committee, he performed the functions of an outside statutory auditor by making statements from an independent and objective perspective concerning the determination of terms for business transactions with Nissan Motor Co., Ltd. |
Outside Director Yasuyuki Ohira, Outside Director Hideaki Shinada, Outside Statutory Auditor Tomonori Ito and Outside Statutory Auditor Nobutaka Kanaji all four qualified as independent directors, have been appointed as outside directors.
Part of the remuneration of directors is linked to Nissan Shatai’s results of operations and the performance of individual directors in order to clarify the directors’ accountability regarding their performance and responsibilities in each fiscal year.
[ Total amount of remuneration, etc. by officer category, total amount of remuneration, etc. by type, and the number of eligible officers ]
| Directors and Auditors |
Total amount of basic salary and variable remuneration for fiscal 2023 Notes:1 |
Total amount of remuneration (Thousand yen) |
No. of persons |
||
|---|---|---|---|---|---|
| Base salary | FY2023 variable remuneration Notes:2 |
Non-monetary Remuneration, etc. |
|||
| Directors (Excluding outside directors) |
112 | 86 | 26 | - | 4 |
| Statutory Auditors (Excluding outside Statutory Auditors) |
14 | 14 | - | - | 1 |
| Outside director |
32 | 32 | - | - | 6 |
The total amount of directors' remuneration is disclosed in the securities report and the business report.
■ Disclosure of policies for deciding remuneration amount or calculation method
Remuneration for Directors is paid within the ceiling amount approved at the general shareholders meeting and has two components: (1) Annual base salary that is fixed and based on each Director’s roles and responsibilities and (2) performance-based remuneration that is determined in accordance with the achievement of major Nissan Shatai performance targets and the performance of each Director. Only Directors who are also Corporate Officers are eligible to receive performance-based remuneration. Outside Directors receive only annual base salary.
Statutory Auditors receive only annual base salary and the amount of this remuneration is determined by the Statutory Auditors.
Remuneration for Directors and Statutory Auditors is based on resolutions approved at the general shareholders meeting held on June 30, 1982. These resolutions limit total monthly remuneration to 30 million yen for Directors and 5 million yen for Statutory Auditors. At the end of this general shareholders meeting, Nissan Shatai had 15 Directors and 2 Statutory Auditors.
The Board of Directors has given Nissan Shatai President Haruhiko Yoshimura the authority to determine the base salary and remuneration linked to results of operations of individual directors. The reason is the judgment of directors that this delegation of authority is appropriate because, with the involvement of the Nominations and Remuneration Committee, the company president is able to evaluate the performance of the business units supervised by individual directors. The president prepares an initial proposal for remuneration and submits the proposal to the Nominations and Remuneration Committee. The president then takes the results of the committee’s discussions into consideration and makes final decisions concerning remuneration.
Method for determining remuneration for individual directors
1. Policy and method for determining remuneration for individual directors
On March 22, 2022, the Board of Directors approved a resolution concerning partial amendment of the policy for determining remuneration for individual directors. Before this resolution was approved, the Nominations and Remuneration Committee discussed the proposed policy and submitted their findings to the Board of Directors.
2. Summary of the remuneration policy
There are two components of remuneration, both monetary, for directors. One is a fixed base salary. The other is remuneration linked to results of operations that is determined in accordance with the achievement of major Nissan Shatai performance targets and the performance of each director. Outside directors receive only the base salary.
Remuneration linked to results of operations is determined by using companies in similar industries as benchmarks and establishing a standard ratio of the base salary for each executive title. These standard ratios are determined by the Board of Directors after taking into account the results of a discussion of this matter by the Nominations and Remuneration Committee.
Remuneration linked to results of operations
Remuneration linked to results of operations ratio is calculated by multiplying the payment ratio that is established for each title of directors who are also Nissan Shatai corporate officers (40% of FY base salary for the president and 30% for other directors) by the degree to which each individual’s targets concerning financial indicators and other performance were achieved in the applicable fiscal year. Financial indicators used for remuneration linked to results of operations are major indicators for the preservation of a sound foundation for business operations for many more years and include consolidated operating income, consolidated free cash flows and other items. Furthermore, these indicators are consistent with the current medium-term management plan and are reexamined as needed to reflect changes in the business climate. To evaluate personal accomplishments, targets for quality and productivity improvements and other items are established that reflect each individual’s duties. These items are selected in each fiscal year upon agreement by the president and each director who is also a corporate officer.
The Secretariat (secretarial and director support) regularly collaborates with outside directors, and the Secretariat (statutory auditor support) regularly collaborates with outside statutory auditors.
Directors receive documents associated with upcoming meetings of the Board of Directors prior to these meetings as well as preliminary explanations of agenda items as needed.
■ Retired Representative Director and Presidents, etc. Holding Advisory or Any Other Position in the Company
| Name | Title /Position |
Responsibilities | Working Form and Conditions (Full-time /Part-time, Paid /Unpaid, etc.) |
Date of Retirement from Position Such as President |
Term of Office |
|---|---|---|---|---|---|
■ Other Matters
Nissan Shatai has a Board of Directors, which decides material business activities of Nissan Shatai and monitors the activities of individual directors. In addition, statutory auditors who comprise Board of Statutory Auditors audit the activities of the directors. Furthermore, Nissan Shatai’s Board of Directors is relatively small, so it is structured with a transparent and logical system of delegation, by which the authority to perform business activities is properly delegated to corporate officers and other employees.
The Board of Directors resolves the material business activities in Nissan Shatai such as the basic policies concerning management and matters concerning the General Shareholders Meeting, directors, finance, stocks, human resources and the organization, etc. and the matters stipulated in the applicable laws and the Articles of Incorporation in accordance with the rules of the Board of Directors and their bylaws. Furthermore, it monitors the activities of the directors and executive officers by receiving reports about the status of the business activities, including production, financial status, etc.
There are six directors, including two who are outside directors and independent directors as stipulated by Tokyo Stock Exchange, Inc. As a rule the Board of Directors meets monthly and in addition ad-hoc meetings are also held whenever necessary. Eighteen meetings were held in the current fiscal year. The status of attendance by individual directors is as follows.
In addition, the Executive Committee meets once a week in principle to discuss specific management issues. This members of this committee consist of four corporate officers who are directors, five corporate officers who are not directors, and six vice presidents, and the Committee Chair is the President. Furthermore, an outside director and a statutory auditor (Full-time) attend the committee as observers.
There are three statutory auditors, including two outside statutory auditors all of whom are an independent statutory auditor as stipulated by Tokyo Stock Exchange, Inc.
Statutory auditors attend meetings of the Board of Directors, and audit the overall execution of work by the Board of Directors in accordance with audit policies the Board of Statutory Auditors determines.
Through robust discussion at Board of Directors meetings and other means, Nissan Shatai strives to achieve a situation where directors monitor each other’s work. In order to ensure sound supervision of directors, the three statutory auditors, one of whom is an outside statutory auditor, audit directors’ execution of work primarily by attending meetings of the Board of Directors and other key bodies, receiving business reports from directors, etc., and reviewing important documents. The audit function is further strengthened by appointing two independent statutory auditors to supervise work from an objective and neutral standpoint.
Nissan Shatai established a voluntary Nominations and Remuneration Committee and Business Monitoring Committee as advisory committees for the Board of Directors in January 28, 2020. The majority of these committee members are independent outside directors.
Each Committee discusses and submits their advice to the Board of Directors about policy for determining the remuneration of directors, remuneration for individual directors and significant transactions with related parties The current system has been adopted to ensure sound business supervision through such measures.