Corporate Governance Organization

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Basic Views

The Nikon Group will strive to achieve sustainable growth and enhancement of its corporate value over the medium- to long-term, through improving management efficiency and transparency and further strengthening the supervisory function over management in light of the purpose of Japan's Corporate Governance Code.

Management System

In an aim to further enhance corporate governance, the Company transitioned to a company with an Audit and Supervisory Committee, subsequent to the approval at the 152nd Annual General Shareholders' Meeting held on June 29, 2016. Through this transition, the Company will strive to clarify management responsibility and streamline decision-making by delegation of authority, while further strengthening the supervisory function of the Board of Directors.

Nikon's Corporate Governance Organization (As of June 29, 2016)

Board of Directors

The Board of Directors supervises management by directors and assumes the decision-making functions on the matters prescribed under laws and regulations, and the Articles of Incorporation of the Company, as well as the important matters concerning the Nikon Group. For the purpose of clarifying the scope of delegation to the executive directors and officers while ensuring prompt decision-making and management by the executive directors and officers, the Company specifically sets out the matters subject to deliberation at the Board of Directors in the criteria for matters subject to deliberation and report at the Board of Directors. For example, the Board of Directors makes decisions on matters concerning important management, including the basic management policies, the Medium Term Management Plan, the annual plan, the Basic Policy on Internal Control System, and investments and loans exceeding a certain amount.
Moreover, in order to further strengthen the supervisory function of the Board of Directors, the Company has appointed four independent external directors (including three Audit and Supervisory Committee members).

Audit and Supervisory Committee

The Audit and Supervisory Committee audits and supervises the status of management by directors other than those who are Audit and Supervisory Committee members, and officers. For such purpose, Audit and Supervisory Committee members regularly attend the important meetings such as the meetings of the Board of Directors and the Executive Committee, and conducts audits and supervision over the management and directors. In addition, to further enhance independence and neutrality of the audit system, the Audit and Supervisory Committee shall consist of five Audit and Supervisory Committee members including three independent external directors.

Executive Committee

The Executive Committee, as the highest decision-making body of the management, swiftly and decisively makes decisions on individual major management issues delegated by the Board of Directors, in accordance with basic management policies, etc. as determined by the Board of Directors.

Compensation Committee

The Company establishes the Compensation Committee which consists of representative directors, external directors and external experts. The Compensation Committee deliberates and makes proposals for policy regarding executive compensation as well as various related systems so as to ensure objectivity, transparency and linkage with performance in the process of determining executive compensation.

Compensation for Directors and Corporate Auditors (Year ended March 31, 2016)

Category Monthly compensation Subscription rights to shares granted as stock-related compensation Bonuses Total
Number of persons Amount of compen-
sation
(million yen)
Number of persons Amount of compen-
sation
(million yen)
Number of persons Amount of compen-
sation
(million yen)
Number of persons Amount of compen-
sation
(million yen)
Directors (External directors out of all directors) 11
(2)
319
(20)
8
(-)
108
(-)
7
(-)
65
(-)
11
(2)
493
(20)
Corporate auditors (External corporate auditors out of all corporate auditors) 5
(2)
71
(20)
- - - - 5
(2)
71
(20)
Total 16 390 8 108 7 65 16 564

Method for Calculating Compensation

Basic policies regarding compensation Executive compensation will be determined to satisfy the following basic matters.
  • Executive compensation should motivate executives to sustainably improve values of companies and shareholders, as well as enhance willingness and morale
  • Executive compensation should keep, cultivate and reward excellent personnel
  • The decision process for the compensation system should be objective and transparent
Compensation system and performance-based structure
  • A)The compensation system for executive directors and officers is comprised of the following items. The distribution ratio for compensation is determined by changing the percentages of fixed monthly compensation and performance-based compensation according to positions and duties.
  • "Fixed monthly compensation"
    Monetary compensation not based on performance.
  • "Bonuses"
    This monetary compensation is based on the degree of accomplishment and qualitative assessment of the consolidated net sales and consolidated operating income of the Group as a whole and departments in charge on a single-year basis, and is determined within the range of 0% to 200% of the standard payment. Furthermore, if the target value of the consolidated operating income is below a certain level, the amount of the standard payment is adjusted downward.
  • "Performance-based stock compensation"
    Stock compensation is determined within the range of 0% to 150% in accordance with achievement of consolidated net sales and consolidated operating income, etc. for the final fiscal year of the Medium Term Management Plan to be resolved per each three fiscal years with the aims of sharing value with shareholders and enhancing willingness and morale for improvement of medium- and long-term performance.
  • "Subscription rights to shares granted as stock-related compensation"
    Subscription rights to shares are granted with the aims of sharing value with shareholders and enhancing willingness and morale for improvement of long-term performance, within the range not exceeding 5% of the share dilution ratio.
  • B)The compensation system for non- executive directors consists only of "fixed monthly compensation."
Method for determining compensation level and amount The Compensation Committee discusses and advises on related systems in order to determine the level and system appropriate to the duties on account of compensation levels of major Japanese companies that globally develop their businesses so as to determine the compensation amount consistent with the performance of the Group and its business scale.
The Compensation Committee consists of the representative directors, external directors and external experts, and discusses on establishment of executive compensation policies, consideration of the compensation system and specific calculation method. Based on the results of the discussions, compensation for directors other than those who are Audit and Supervisory Committee members is determined by a resolution of the Board of Directors, and compensation for directors who are Audit and Supervisory Committee members is determined by consultation at the Audit and Supervisory Committee.

Amount of remuneration, etc. for Accounting Auditor (Year ended March 31, 2016)

Accounting Auditor Category Amount
Deloitte Touche Tohmatsu LLC Total amount of remuneration, etc. of Accounting Auditor during the fiscal year under review 93 million yen
Total amount of money and other properties which the Company and its subsidiaries should pay in remuneration of Accounting Auditor for their services to the Company and its subsidiaries during the fiscal year under review 282 million yen

Attendance at Meetings of the Board of Directors and Board of Corporate Auditors by External Directors and External Corporate Auditors (Year ended March 31, 2016)

Category Name Attendance at meetings of the Board of Directors Attendance at meetings of the Board of Corporate Auditors
External directors Kenji Matsuo 12 of 13 -
Koukei Higuchi 9 of 13 -
External corporate auditors Haruya Uehara 13 of 13 11 of 11
Hiroshi Hataguchi 13 of 13 11 of 11

Appointment of Females and Non-Japanese to Directors and Officers (As of March 31, 2016)

Number of female Number of non-Japanese
Nikon Corporation 0 0
Group companies* 3 35