Corporate Governance

Compensation for Executives

Basic Policy on Executive Compensation

The Company’s basic policies regarding remuneration for its Directors and Executive Officers are twofold: 1) to increase corporate performance and corporate value over the medium to long term to realize its corporate mission and Management Vision and 2) to establish a remuneration system and decision-making process that is transparent, rational, and fair so that the Company can fulfill its accountability to customers, society, the environment, shareholders, business partners, employees, and other stakeholders. Based on this policy, the Company’s executive compensation system is as follows.

出光興産, DFF Inc.

Amount and Composition of Compensation

Compensation for Directors and Executive Officers consists of 1) fixed compensation, 2) performance-based bonuses, and 3) performance-linked stock compensation. When paid in the standard amount, the above three components account for around 70%, 15%, and 15%, respectively, of overall compensation. In the course of determining such compensation, the Company utilizes data obtained from a consulting firm that is independent from the Company to assess its appropriateness.
Moreover, the level of compensation is being reviewed as necessary in light of its appropriateness vis-à-vis changes in the business environment and input gleaned via external surveys. Compensation for Outside Directors consists solely of fixed compensation from the perspective of objectively assessing the appropriateness of business execution and ensuring appropriate supervisory functions. In addition, no specific limitations are set for the number of the Company shares that can be owned by Directors and Executive Officers, nor does a clawback provision apply to shares granted to these individuals.

Compensation Systems for Directors (excluding Outside Directors) and Executive Officers
Figure
  • * Stock compensation is granted only after the recipients have stepped down from their positions. To provide the recipients with medium- to long-term incentives, the value of stock compensation is designed to reflect fluctuations in stock prices during their terms in office.
出光興産, DFF Inc.

Total Amount of Compensation, etc. by Executive Category

Total amount of compensation and other wages paid to Directors in FY2020, their breakdown by type and the number of
recipients is as presented below

Category People
(number)
Fixed
Compen-sation
(Million yen)
Performance-linked
compensation (Million yen)
Total
compen-sation
(1 million yen)
Cash
compen-sation
Stock
compen-sation
Directors (excluding Outside Directors) 10 360 43 127 531
Audit & Supervisory Board Members
(excluding Outside Audit & Supervisory Board Members)
2 62 - - 62
Outside Directors and Outside Audit & Supervisory Board Members 7 101 - - 101
Total 19 524 43 127 695
出光興産, DFF Inc.