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Corporate Governance

Compensation Policy and The Amount of Compensation

(Source: Reports for the 181st Fiscal Period)

(1) Compensation Policy

The Compensation Committee establishes compensation policy regarding compensation of each Director and/or Executive Officer as follows:
Since the main responsibility of Directors is to supervise the execution of the overall Group's business, "Compensation for Directors" is determined at an adequate level to secure highly competent personnel and ensure effective work of the supervisory function.
Since the main responsibility of Executive Officers is to increase corporate value in their capacity as executives responsible for companies or divisions within the Group, the Company has a basic policy to determine compensation for Executive Officers at an adequate level to secure highly competent personnel and ensure the effectiveness of their compensation package as an incentive to improve business performance, based on a balance between fixed compensation and performance-linked compensation.

i. Compensation for Directors

Directors who do not concurrently hold office as an Executive Officer are paid the basic compensation (fixed amount) calculated according to his/her duties. An allowance is provided for nonresidents of Japan (the country where the HQ is located).
Directors who concurrently hold office as an Executive Officer are paid the basic compensation (fixed amount) in addition to Compensation for Executive Officers specified in (ii).

ii. Compensation for Executive Officers

Compensation for Executive Officers consists of basic compensation (fixed amount) determined according to rank, stock compensation, and performance-linked compensation.
Performance-linked compensation is determined in accordance with the performance of the company overall and the divisions under the charge of the Executive Officer during the fiscal year, with cash and shares paid at a rate set according to rank.
With regard to the stock compensation and performance-linked compensation (shares) that is paid in the form of the Company's stock, mechanisms such as restricted stocks with transfer restrictions until retirement are used to secure effectiveness as an incentive for medium- to long-term improvement of business performance.

iii. Compensation standards

Compensation standards are determined at suitable levels as a global company, with the aim of securing highly competent personnel. The compensation standards of other listed companies and payroll and benefits of the Company's employees are considered when determining the Company’s compensation standards of management.

(2) Amount of Compensation

Item Number of Directors/Executive Officers
(Persons)
Amount
(Millions of yen)
Directors
(Outside Directors)
19
(14)
238
(222)
Executive Officers 15 1,381
(Notes)
  1. The above-mentioned compensations include compensations for the Directors who retired at the closing of the Ordinary General Meeting of Shareholders held on June 2626, 2019 with regard to the period from April 2019 to their respective retirement/resignation date.
  2. An amount of 618325 million yen in compensation in the form of stock-based compensation is included in the compensation, etc. of Executive Officers.
  3. The provision for Performance-based compensation reasonable estimated as of end of March 2020 is included in the compensation etc. of Executive Officers.
  4. For Directors who are concurrently serving as an Executive Officer, their compensation as Director and their compensation as Executive Officer are presented separately.

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