LIXIL makes pioneering water and housing products that solve everyday, real-life challenges, making better homes a reality for everyone, everywhere.
As the Company is a company with a nomination committee, etc., the Compensation Committee (the “Committee”), comprised solely of Outside Directors, determines compensation policy for Directors and Executive Officers received from the Company as consideration for their duties and the individual compensation for Directors and Executive Officers.
The Committee manages the overall executive compensation as described below based on the belief that strong motivations for Executive Officers to achieve management goals and thorough corporate governance for all Directors and Executive Officers are important for achieving LIXIL's Purpose “Make better homes a reality for everyone everywhere” sustainably.
The Compensation for Directors and Executive Officers is determined in accordance with the following basic policies,
(a) Foster improvement of short-, medium-, long-term and sustainable business results and
corporate value.
(b) Attract and retain the best talent who are necessary to foster business growth globally.
(c) Ensure a fair and reasonable decision process with regards to compensation that will provide
accountability to shareholders, employees, and all stakeholders.
(d) Consider and discuss based on the economic and social situation, our business condition and objective
indexes and advices of external specialized agencies at the Committee.
(e) Individual compensation shall be managed in consideration of each individual duty, performance,
experience, and priority of attracting and retaining personnel etc.
Compensation structure for Directors who monitor and supervise the Company’s management, and for Executive Officers who are responsible for the performance of business, shall be separate. When a Director concurrently serves as an Executive Officer, the compensation system for the Executive Officers shall be applied.
The compensation system for Directors consists of Annual Base Salary and Stock-linked compensation as their acts are requested to contribute to increase the sustainable corporate value while they are monitoring and supervising the management during their statutory terms. In the event that an Outside Director assumes the role of chairperson of the Board of Directors’ Meeting or chairperson of a Committee, Chairperson Allowance shall be paid, taking into account the responsibilities and burdens of the Director.
The above chart shows the compensation mix (median value) of Outside Directors for the Fiscal Year ended March 2022. Stock-linked compensation indicates the amount granted, which is different from the actual amount paid.
The compensation system for Executive Officers consists of Annual Base Salary, Performance-linked compensation and Stock-linked compensation, based on the policy of attracting and retaining talented human resources that are essential for accelerating business growth, providing strong motivation to achieve management goals and rewarding fairly and equitably in accordance with the results of such efforts and properly reflecting the trust and evaluation of shareholders and other stakeholders in the compensation. Regarding the details of the individual compensation for Executive Officers, the Committee determines the compensation level and compensation mix based on the role and responsibility, business performance, experience and difficulty of securing personnel, etc. of each Executive Officer, as well as the performance targets and ESG action targets, etc. for each of them. In particular, for Executive Officers who are expected to contribute significantly to improving corporate value from a medium- to long-term perspective, the Committee takes measures such as increasing the ratio of Stock-linked compensation to total compensation.
The above chart shows the compensation mix for the Fiscal Year ended March 2022, and the compensation mix of Executive Vice President, "Senmu" is median value. Performance-linked compensation indicates the standard amount, and stock-linked compensation indicates the amount granted, which is different from the actual amount paid.
Annual Base Salary of Outside Directors shall be determined, based on the role of Outside
Directors at the Company, while referring to the salary levels of the upper group among domestic companies
as reference information in line with the purpose of the compensation basic policies.
Annual Base
Salary of Executive Officers shall be determined individually, based on role and responsibility, business
performance, experience and difficulty of securing personnel, etc., while referring to the compensation
levels inside and outside Japan as reference information in line with the purpose of the compensation
basic policies. As for the referenced compensation levels, the external specialized agencies’ data for
each country is compared based on criteria such as revenue and market value mainly in Global Industry
Classification Standard categories. The Company intends to eliminate as much as possible any differences
in compensation based on the country of residence.
In order to encourage the Executive Officers to work together to achieve single-year management goals and to ensure that they are fairly equitably rewarded in accordance with the results of their performance, the calculation formula has been composed of only company-wide performance.
(Claw back, etc.)
If the financial statements have been
retroactively corrected due to a material accounting mistake or malpractice in the process of account
settlement by the Company, the Committee shall conduct a review based on such event for
revisions of Performance-linked compensation already paid and/or due to be paid in the future to the
relevant Executive Officer, and can decide to request the return of Performance-linked compensation
already paid to the Executive Officer and/or amend Performance-linked compensation to be paid.
Furthermore, the Committee may adjust the method of calculating Performance-linked compensation after
considering in a comprehensive manner the impact on earnings of events that occur during the calculation
period.
The Company has been applying the Phantom Stock Plan since the fiscal year ended March
2020, with the aim of encouraging Directors and Executive Officers
to monitor, supervise, manage and make management decisions for achieving the sustained improvement in the
corporate value of the Company over the mid- to long-term as well as further promoting shared values
between the Directors and Executive Officers and shareholders of the Company, and attracting and retaining
talented human resources from around the globe by standardizing
global officers’ compensation.
The Company grants the Phantom Stock to Directors on the day of each
Annual Shareholders’ Meeting, and to Executive
Officers on the first day of each business year.
The number of the Phantom Stock allotted to each
Director and Executive Officer shall be
the number calculated by dividing the granted amount, which is calculated by multiplies Annual Base Salary
by the coefficient according to responsibilities, etc., of the eligible officer, by the Company’s stock
price at the time of grant.
After the period from the grant date to the vesting date (the “Holding
Period”) has passed, the amount calculated by multiplying the stock price at that time by the number of
stocks held shall be paid.
As the above mechanism, the amount of compensation increases or decreases
according to changes in the stock price similar to the Restricted Stock etc., and Directors and Executive
Officers are encouraged to act with an awareness of the impact on the Company’s stock price.
Note: The average of closing price of the Company's stock for the previous 30 business days is applied at both grant and vesting.
The following is the contents for the Fiscal Year ended March 2022.
Officer category | Total amount of the compensation (million yen) |
Total amount of the compensation by type (million yen) | Number of Officers receiving | |||
---|---|---|---|---|---|---|
Annual Base Salary | Performance-linked compensation |
Stock-linked compensation |
Various allowances |
|||
Outside Directors | 149 | 121 | - | 28 | - | 8 |
Executive Officers | 974 | 484 | 314 | 5 | 171 | 8 |
Total | 1,123 | 605 | 314 | 33 | 171 | 16 |
Notes:
Amounts based on Japan standard.
The compensation amounts shown above include compensation paid by the Company’s subsidiaries, in addition to compensation paid by the Company. Of the above amounts, the amount paid by the Company is 1,046 million yen (149 million yen for the 8 Outside Directors and 897 million yen for the 8 Executive Officers).
The amount of Annual Base Salary for Outside Directors includes the Chairperson Allowance.
Regarding Performance-linked compensation and Stock-linked compensation, the amounts that should be recorded as expenses for the Fiscal Year ended March 2022 are stated.
Cost-of-living allowances and income tax allowances, etc. were paid as Various allowances.
The following is the contents for the Fiscal Year ended March 2022.
Name | Officer category | Company name | Total amount of the compensation (million yen) |
Total amount of the compensation by type (million yen) | |||
---|---|---|---|---|---|---|---|
Annual Base Salary | Performance-linked compensation |
Stock-linked compensation |
Various allowance | ||||
Kinya Seto | Executive Officer | LIXIL | 295 | 125 | 108 | 62 | - |
Hwa Jin Song Montesano | Executive Officer | LIXIL | 184 | 59 | 25 | △6 | 106 |
Bijoy Mohan | Executive Officer | LIXIL | 133 | 59 | 78 | △20 | 16 |
Director | LIXIL International Pte. Ltd | 77 | 28 | - | - | 49 |
Notes:
Amounts based on Japan standard.
Annual Base Salary is the amount paid as determined by the Compensation Committee.
Performance-linked compensation is not the actual amount paid but the expensed amount calculated based on the target amount of Performance-linked compensation determined by the Compensation Committee with the business forecast as of March 31, 2022.
Stock-linked compensation is not the actual amount paid but the expensed amount calculated based on the number of stocks granted as Phantom Stock, which is determined by the Compensation Committee, for the three fiscal years from the Fiscal Year ended March 2020 to the Fiscal Year ended March 2022. The expensed amount is calculated by adding up the following two items.
1) The amount which is calculated by multiplying the number of stocks granted in the Fiscal Year ended March 2022 by the stock price at the end date of the Fiscal Year ended March 2022.
2) The amount which is calculated by multiplying the total number of stocks granted for the Fiscal Year ended March 2020 and the Fiscal Year ended March 2021 by the difference of the stock prices between these fiscal years. (The difference value is a positive value if the stock price goes up, and a negative value if it goes down.)
Since the stock price of the Company moved from 3,075 yen at the end date of the Fiscal Year ended March 2021 to 2,290 yen at the end date of the Fiscal Year ended March 2022, and thus the expensed amount for these two years was negative.
Cost-of-living allowances and income tax allowances, etc. were paid as Various allowances.
For details of the exective compensation, please refer to the "Report for the 80th Fiscal Year".
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