Type of Organization | Company with an Audit & Supervisory Board |
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Number of Board Members under the Articles of Incorporation | 15 |
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Term for Board Members under the Articles of Incorporation | 1 year |
Chairperson of Board of Directors | Chairman (Unless double as the president) |
Number of Board Members | 6 |
Number of Outside Directors | 3 |
Number of Independent Directors in Outside Directors | 3 |
Name | Former Status | Relationship with company (*1) | ||||||||||
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a | b | c | d | e | f | g | h | i | j | k | ||
Sadako Yasuoka | Other | ▲ | ||||||||||
Yojiro Shiba | From other company | △ | ||||||||||
Yumiko Ito | Lawyer |
(*1)
○: This person is currently or was recently placed in this category.
△: This person was previously placed in this category.
●: A relative of this person is currently or was recently placed in this category.
▲: A relative of this person was previously placed in this category.
Name | Independent Officer | Additional Information | Reasons of Appointment |
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Sadako Yasuoka | ○ | A relative of Ms. Yasuoka previously served as an operating officer of Nippon Express Co., Ltd, our main operating company. | Ms. Sadako Yasuoka is well qualified as outside Director, because she has excellent character and insight, as well as profound education and abundant experience, including educational activities, such as the study of the Analects of Confucius, with people of various ages. Meanwhile, her father has served as an operating officer of Nippon Express Co., Ltd, our main operating company in the past. However, it has been 27 years since he retired from the post and there is no special relationship that may affect our decisions in doing business. For these reasons, there is considered to be no risk of conflict of interest with our general shareholders, and no problem with her independence, and she has been designated as an Independent Officer. |
Yojiro Shiba | ○ | Mr. Shiba previously served as an executive at Mizuho Bank, Ltd., a main transaction bank of the company | Mr. Yojiro Shiba possesses outstanding character and insight, a wealth of experience and many years in corporate management, and broad knowledge cultivated through responding to a wide range of customer needs. Accordingly, we believe he is suitable to serve in a position as an outside director. Mr. Shiba has previously served as an executive at Mizuho Bank, Ltd., a main transaction bank of the company, through March 2005. However, he retired from said bank 18 years ago and maintains no special relationships that impact company decision-making. Given the preceding, we have determined there is no risk of conflict of interest with general shareholders and no issues related to independence. Therefore, we have designated Mr. Shiba as an independent director. |
Yumiko Ito | ○ | Yumiko Ito is a person of outstanding character and insight, and as an attorney, has held important positions such as legal officer in several companies with diverse backgrounds. She is currently active as an attorney, mainly assisting companies with contractual matters, litigations, and disputes. As an Outside Director and Audit & Supervisory Board member of several companies, she not only provides advice as a legal expert, but also contributes to improving corporate value from various perspectives by offering her opinions from the perspective of a shareholder, making her an ideal candidate for an outside director. In addition, none of the conditions that are deemed by the Tokyo Stock Exchange to present a risk of a conflict of interest with general shareholders apply to her. Given the preceding, we have determined there is no risk of conflict of interest with general shareholders and no issues related to independence. Therefore, we have designated Ms. Ito as an independent director. |
Discretionary Committee Equivalent to the Nomination Committee or Compensation Committee | In Place |
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Name of Committee | Members (persons) | Full-time members (persons) | Internal Directors (persons) | Outside Directors (persons) | Outside Experts (persons) | Others (persons) | Head (Chairperson) of the Committee | |
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Committee Equivalent to the Nomination Committee | Compensation and Nomination Advisory Committee | 4 | 0 | 1 | 3 | 0 | 0 | Internal Directors |
Committee Equivalent to the Compensation Committee | Compensation and Nomination Advisory Committee | 4 | 0 | 1 | 3 | 0 | 0 | Internal Directors |
In order to obtain the opinions of independent outside Directors concerning important matters such as the compensation and nomination of Officers, our company has established a fair and transparent discretionary Compensation and Nomination Advisory Committee—with three out of four committee members as independent outside directors—as an advisory body to the Board of Directors. The Board of Directors makes decisions based on the opinions of the committee members to the maximum extent possible. The committee members are appointed via resolutions of the Board of Directors, and the committee functions as both the Nomination Committee and the Compensation Committee.
In these meetings, the committee members deliberated on matters related to the appointment of directors and executive officers, including candidates for directors and executive officers, as well as resolutions related to establishment of a skills matrix for the composition of the Board of Directors, compensation policy, and compensation structure, in response to consultation from the President and Representative Director, and submitted reports to board of directors based on their decisions (Seven meetings were held in the fiscal year ended December 31, 2022).
The chairperson and the members as of end of March 2023 are as follows:
<Chairperson>
Kenji Watanabe (Chairman and Representative Director)
<Members>
Director: Sadako Yasuoka (Independent Outside Director)
Director: Yojiro Shiba (Independent Outside Director)
Director: Yumiko Ito (Independent Outside Director)
Audit & Supervisory Board | Formed |
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Number of Audit & Supervisory Board Members under the Articles of Incorporation | 5 |
Number of Audit & Supervisory Board Members | 5 |
We believe that sufficient cooperation is ensured through regular quarterly audit council meetings and monthly meetings between the accounting auditors and the Audit Division and Audit & Supervisory Board Members, attendance of internal control audits by Audit & Supervisory Board Members, and monthly meetings between the accounting auditors and the Internal Auditing Division. Additionally, when we establish an audit plan, the schedule for Audit & Supervisory Board Members’ audits and internal audits are determined after comparing schedules. Our company sets the date for an audit by the accounting auditors upon mutual discussion between the Audit Division and Audit & Supervisory Board Members. We will continue to strengthen the cooperation among the three parties, improve the effectiveness of audits, and maintain and develop the governance of our company group.
Outside Audit & Supervisory Board Members | Selected |
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Number of Outside Audit & Supervisory Board Members | 3 |
Number of Outside Audit & Supervisory Board Members who are Independent Directors | 3 |
Name | Former Status | Relationship with company (*2) | ||||||||||||
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a | b | c | d | e | f | g | h | i | j | k | l | m | ||
Toshiaki Nojiri | From other company | △ | ||||||||||||
Yoshio Aoki | From other company | △ | ||||||||||||
Nobuko Sanui | From other company |
(*2)
○: This person is currently or was recently placed in this category.
△: This person was previously placed in this category.
●: A relative of this person is currently or was recently placed in this category.
▲: A relative of this person was previously placed in this category.
Name | Independent Officer | Additional Information | Reasons of Appointment |
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Toshiaki Nojiri | ○ | Mr. Toshiaki Nojiri previously served as an executive (researcher) at Nippon Express subsidiary Nittsu Research Institute and Consulting, Inc.(Current NX Logistics Research Institute and Consulting, Inc.) | Mr. Nojiri is a person of integrity and insight with sufficient experience as a company Director to monitor the management of all aspects of corporate affairs. He has specialized in the study of Antimonopoly Law and transportation business policy and, with thorough knowledge especially in distribution-related policies, he has held many public offices as a person with relevant knowledge and experience at government offices and business organizations. Mr. Nojiri served as a researcher of Nittsu Research Institute and Consulting, Inc. (Current NX Logistics Research Institute and Consulting, Inc.), a subsidiary of our company, from April 1979 to March 1989. The period of his service was 10 years and it has been 34 years since he retired from the post. Therefore, there is no special relationship that can potentially influence our decision-making. Since June 2016, Mr. Nojiri has served as director of Nittsu Gakuen Educational Corporation, the operating entity of Ryutsu Keizai University. However, we assume that it has no impact on the Educational Corporation's operation, and therefore said Corporation's independence is sufficiently ensured. For these reasons, there is considered to be no risk of conflict of interest with our general shareholders, and no problem with his independence, and so he has been designated as an independent officer. |
Yoshio Aoki | ○ | Mr. Yoshio Aoki previously served as a partner of Deloitte Touché Tohmatsu LLC, our company’s accounting auditor | Mr. Aoki is a person of integrity and insight with sufficient experience as a company Director to monitor the management of all aspects of corporate affairs. He has a wealth of experience as a certified public accountant as well as specialized knowledge concerning finance and accounting. He was a partner of Deloitte Touché Tohmatsu LLC, our company’s accounting auditor, until November 2015. However, 7 years have already passed since she left the firm, and there is no special relationship that could influence the company’s decision making. For these reasons, there is considered to be no risk of conflict of interest with our company's general shareholders, and no problem with his independence, and so he has been designated as an independent officer. |
Nobuko Sanui | ○ | None. | Ms. Nobuko Sanui possesses outstanding character and insight, as well as being well-versed in international and labor-related fields. She has experience in organizational management and we believe she is suitable to serve in a position to monitor management from a perspective on general business. Ms. Sanui is not subject to any matters considered to be a conflict of interest with general shareholders as established by the Tokyo Stock Exchange. Given the preceding, we have determined there is no risk of conflict of interest with general shareholders and no issues related to independence. Therefore, we have designated Ms. Sanui as an independent director. |
Number of Independent Officers | 6 |
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All outside Directors and outside Audit & Supervisory Board Members who satisfy the qualifications for Independent Officers are designated Independent Officers.
【Independence Criteria for Independent Outside Directors】
Taking into consideration the requirement for outside directors stipulated in the Companies Act and the criteria set by securities exchanges, our company has established our own standards; and we appoint outside directors and outside A & S Board Members in accordance with these standards.
When the following items do not apply to an outside director or an outside A & S Board Member candidate, we consider that they have the appropriate independence.
*An “executive officer” signifies an executive director, a corporate officer or an employee.
When appointing independent outside directors, we strive to select candidates who can be expected to make effective proposals to the Board of Directors regarding the company’s management policies and management improvements.
【Outside Officers’ Status of Combined Offices】
And Our company discloses the status of our outside directors and outside A & S Board Members holding additional posts through the Convening Notices of General Shareholder Meetings and annual Securities Reports.
Incentives for Board Members | Introduction of Performance-based Stock Compensation Plan |
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We have introduced stock options as part of director compensation. In addition, we have introduced a performance-based stock compensation plan.
Recipients of Stock Options | ------ |
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------
Disclosure of Individual Compensation for Directors | Selected Directors |
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Total Amount of Compensation, etc. breakdown for Directors and Audit & Supervisory Board Members are being made available for public inspection in Business Report and Securities Report which are available on our website. And for directors who receive 100 million yen or more in compensation, the amount is disclosed in the Securities Report.
Classification | Total Compensation (Million Yen) |
Total amount of remuneration, etc. by type (Million Yen) | Number of people to be covered (People) |
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Basic compensation | Performance-based remuneration | Other | ||||
Bonuses | Share-based remuneration |
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Directors (Outside directors) |
354 (39) |
265 (39) |
67 (-) |
14 (-) |
6 (-) |
9 (3) |
Audit & Supervisory Board Members (Outside Members) |
90 (32) |
87 (32) |
- (-) |
- (-) |
3 (-) |
5 (3) |
*Note 1: Article 2, Paragraph 1 of the Supplementary Provisions of our Company’s Articles of Incorporation stipulated that the total amount of monetary remuneration to be paid to directors from the date of establishment of our Company until the close of the Ordinary General Meeting of Shareholders for the fiscal year ending on December 31, 2023 shall not exceed 660 million yen per year (not including the salary for directors who also serve as employees)
Note 2: The stock compensation plan for our Company’s directors (excluding outside directors) covering the period from the date of establishment of our Company to the fiscal year ending December 31, 2023 is stipulated in Article 2, Paragraph 2 of the Supplementary Provisions of the our Company’s Articles of Incorporation, but the above stock compensation is the amount of allowance recorded for the current fiscal year under the plan, which differs from the actual total amount paid.
Note 3: Article 3 of the Supplementary Provisions of our Company’s Articles of Incorporation stipulated that the total amount of remuneration, etc. for Audit & Supervisory Board members from the date of the establishment of our Company until the close of the Ordinary General Meeting of Shareholders for the fiscal year ending on December 31, 2023 shall not exceed 120 million yen per year.
Note 4: Other compensation includes company housing expenses, etc. paid by our company to the officers.
Kenji Watanabe Chairman and Representative Director
Total compensation: 109 million yen of which the basic compensation was 80 million yen and the company performance-based compensation was 29 million yen (Breakdown / Bonuses : 24 million yen /The performance and share-based remuneration: 5 million yen).
Mitsuru Saito President and Representative Director
Total compensation: 125 million yen of which the basic compensation was 80 million yen (Breakdown: 40 million yen from our company and 40 million yen from Nippon Express Co., Ltd.) ,the company performance-based compensation was 29 million yen (Breakdown/ Bonuses: 14 million yen from our company & 9 million yen from Nippon Express Co., Ltd./The performance and share-based remuneration: 2 million yen from our company & 3 million yen from Nippon Express Co., Ltd.) and other compensation was 14 million yen (Breakdown: 7 million yen from our company and 7 million yen from Nippon Express Co., Ltd.)
*Note 1: The consolidated remuneration, etc. for each individual director is paid by the submitting company under the submitting company's system, but for directors who concurrently serve at Nippon Express Co., Ltd, the amount is shown for the amount borne by both companies according to the relative proportion of concurrent service.
Note 2: The above information is limited to those whose total amount of consolidated remuneration is 100 million yen or more.
Note 3: Article 2, Paragraph 1 of the Supplementary Provisions of our Company’s Articles of Incorporation stipulated that the total amount of monetary remuneration to be paid to directors from the date of establishment of our Company until the close of the Ordinary General Meeting of Shareholders for the fiscal year ending on December 31, 2023 shall not exceed 660 million yen per year (not including the salary for directors who also serve as employees)
Note 4: The stock compensation plan for our Company’s directors (excluding outside directors) covering the period from the date of establishment of our Company to the fiscal year ending December 31, 2023 is stipulated in Article 2, Paragraph 2 of the Supplementary Provisions of the our Company’s Articles of Incorporation, but the above stock compensation is the amount of allowance recorded for the current fiscal year under the plan, which differs from the actual total amount paid.
Note 5: Other compensation includes company housing expenses, etc. paid by our company to the officers.
Existence of Policies for Determining the Amount or Method of Calculating Compensation for Directors and Audit & Supervisory Board Members | Yes |
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In order to seek appropriate advice from independent outside directors on important matters including officers’ remuneration, we established a discretionary Remuneration and Nomination Advisory Committee—with three out of four committee members who are independent outside directors. Our board makes decisions based on the report from the committee. Our policy for officers’ remuneration is as follows:
(Policy for Officers’ Remuneration)
(Determining officers’ remuneration)
Directors’ remuneration is determined by the board after the Remuneration and Nomination Advisory Committee hold an evaluation based on the directors’ duties and performance in accordance with the above policy and then submit a report to the board. The remuneration for A & S Board Members is determined via discussion among the members.
Specific amounts will be determined within the scope of the amount stipulated in the articles of incorporation, taking into consideration the company’s performance, the standards of other companies, employee salaries and other factors.
In addition to remuneration and bonuses for directors and corporate officers, the company has introduced a performance-based stock compensation plan using a trust for directors and corporate officers (excluding outside directors and those residing outside Japan). This plan aims to further enhance their awareness of their contribution to enhancing the company's corporate value and shareholder value over the medium to long term.This system is a medium- to long-term incentive system that uses a portion of the existing base compensation as a source of funds and delivers as compensation a variable number of company shares depending on the position of the recipient and the level of achievement of company-wide performance targets, etc. The system is currently being applied with five business years as the period subject to evaluation. This evaluation period is the same length as the mid-term business plan, and the KPIs are business targets set in the business plan. In particular, we evaluate performance based on indicators such as consolidated sales, consolidated operating income and consolidated return on equity (ROE) for each fiscal year and after the end of the evaluation period. The range of increase/decrease corresponding to the achievement of performance targets, etc., is from 0% to 150%, with 100% being the standard corresponding to achieving the performance targets set as the standards for the annual performance evaluation and the mid-term performance evaluation as a whole.
The actual performance of the indices related to performance-linked stock compensation for the fiscal year ending December 31, 2022 was 116.95% for consolidated net sales, 147.95% for consolidated operating income, and 163.27% for consolidated ROE, compared to the target figures throughout the period subject to evaluation.
The board has the right to determine the amounts which include officers’ remuneration and the calculation method. However, the discretionary Remuneration and Nomination Advisory Committee, which was established as an advisory body of our board, discusses the base amounts including officers’ remuneration and policies regarding the determination of officers’ remuneration. The board makes a decision with the utmost respect for the committee’s report based on its resolution.
[Outline of Performance-based Stock Compensation Plan]
This plan is a stock compensation system that is linked to the medium to long-term performance of our company using the Executive Compensation BIP (Board Incentive Plan) Trust (hereinafter the “BIP Trust”). The BIP Trust is an executive incentive plan based on US Performance Share Plans and Restricted Stock Plans, and is a system which grants benefits (hereinafter “grants etc.”) to Officers, etc. in the form of company stock or the cash equivalent of our company stock price based on business performance, etc.
In addition, NIPPON EXPRESS HOLDINGS is a new company established on January 4, 2022, and has inherited the status of the BIP Trust Contract from Nippon Express Co., Ltd. The details of the inherited BIP trust contract are as follows.
[Content of the trust agreement]
1 | Type of trust | Monetary trust other than a specified solely-administered monetary trust (third-party beneficiary trust with beneficiaries yet to exist) |
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2 | Purpose of trust | To provide incentives to the Officers of our company |
3 | Entruster | Our company (NIPPON EXPRESS HOLDINGS) |
4 | Trustee | Mitsubishi UFJ Trust and Banking Corporation (Joint Trustee: The Master Trust Bank of Japan, Ltd.) |
5 | Beneficiaries | Officers who satisfy the beneficiary requirements |
6 | Trust administrator | Third party having no conflict of interest with our company (certified public accountant) |
7 | Initial Date of trust Agreement | August 2016 (Plan to change to August 2019 to extend the trust period) |
8 | Trust term | August 2019 to May 2024 |
9 | Commencement of the plan | September 2016 |
10 | Exercise of voting Rights | Voting rights will not be exercised |
11 | Class of shares to be acquired | Common stock of our company |
12 | Upper limit of trust Money | 800 million yen (including trust fees and trust expenses) |
13 | Rights holder | Our company(NIPPON EXPRESS HOLDINGS) |
14 | Residual assets | Our company, as the rights holder, may receive residual assets within the scope of the reserve for trust expenses after deducting funds to acquire our shares from trust money. |
[Number of Shares Offered to Directors]
Maximum 115,000 shares (Trust period: five years)
[Individuals Eligible for Beneficial Interest and Other Interests]
Directors who meet the requirements.
The Secretarial Division as a secretariat of the Board of Directors, and other divisions, depend on the agenda, explains about our company's situation to outside directors appropriately. The Internal Auditing Division, in charge of internal auditing, provides the necessary job-related communication information that the occasion demands in order to support the duties of Audit & Supervisory Board Members, including outside Audit & Supervisory Board Members.
The Total Number of Senior Advisors, Consultants, etc., Who Are Former President and Representative Director, etc. | 0 |
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-
[Board of Directors]
*Breakdown of the Board of Directors: 3 internal directors (2 of them are also executive officers) and 3 outside directors (two of them are female)
Attendance of Audit & Supervisory Board Members (to supervise directors’ business execution, 2 internal and 3 outside members)
<Major topics of discussion at Board of Directors meetings held in FY2022 (fiscal year ending December 2022)>
<Reference: Effectiveness evaluation in FY2022 (for the fiscal year ending in December 2022)>
〇 Questionnaire by an outside institution, results of evaluation
Time Period | December 2022 |
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Participants | 9 directors (including 3 outside directors [3 independent officers]), 5 Audit & Supervisory Board Members (including 3 outside members [3 independent officers]); 14 in total |
Evaluation method | by selecting one in five levels (“5: Effective, Appropriate” to “1: Improvement required, Inappropriate”) |
Evaluation items (themes) | “Structure and Management of the Board of Directors,” “Management and Business Strategies,” “Corporate Philosophy and Risk Management,” “Evaluation of Management, Remuneration Status,” “Dialogue with shareholders etc”. Evaluation based on the answers to a total of 21 questions and comments (optional) |
Evaluation results | The Board of Directors evaluated the average score per question and the comments and confirmed that the efficiency of the board is roughly assured. |
<Items highly evaluated>
"Relationship between Management and Outside Directors / Audit & Supervisory Board Members," "Access to Information," "Active role of Outside Directors / Audit & Supervisory Board Members," and "Response to Issues Identified through Effectiveness Evaluation" (all themes related to " Structure and Management of the Board of Directors ") "Monitoring and Supervision of Compliance with Corporate Philosophy" (all themes related to "Corporate Philosophy and Risk Management")
Please also refer to “Establishment of Discretionary Committee, Composition of Committee, and Attributes of Head (Chairperson) of the Committee” in this report.
[Board of Officers]
[Group Management committees]
[Summary of other executive division committees]
Although our Company is a company based on an Audit & Supervisory Board structure under the Japanese Companies Act, we have introduced the Board of Officers system with the goal of delegating business execution from Board of Directors, thereby separating execution and supervision, while strengthening the supervisory function of Board of Directors, of which three out of six members are from outside Director. In addition, we have voluntarily established a Remuneration and Nomination Advisory Committee, chaired by a non-executive director and consisting of three out of four committee members, all of whom are independent outside directors, in order to seek appropriate advice and involvement of independent outside directors regarding the remuneration policy, remuneration system, performance-linked system, and selection and dismissal of directors, excluding the independent outside directors. In addition, audits by Audit & Supervisory Board Members, including 3 outside Audit & Supervisory Board Members, are conducted. By adopting such structure, we determine that the objectivity and neutrality of management supervision functions are ensured at the sufficient level.
In order to ensure an appropriate governance system while continuously discussing ways to improve corporate governance and assessing its necessity in light of the future business environment, the company will continue to discuss the need for institutional changes and executive structure, including a review of the proportion of outside directors.