Corporate Governance System

System Overview
Board of Directors
Support System for Outside Directors
Succession plan
Elections and Dismissals of Executive Officers, Nominations of Director Candidates
Policy for Determining Amount or Calculation Method of Compensation, etc., for Directors and Executive Officers

System Overview

JAPAN POST BANK adopted the company with three statutory committees system of corporate governance to implement rapid decision-making and to increase management transparency. This is deemed to be a system under which the Board of Directors and each statutory and voluntarily established committee can provide appropriate oversight of management.

A Diagram of General Meeting of Shareholders

Supervisory Function

As of July 1, 2024

	Role and composition (as of July 1, 2024)	Main agenda / Operational status (FY2023)	Number of times held (FY2023)
Board of Directors	The JAPAN POST BANK Board of Directors has 14 members (five women and nine men), and of these nine are Outside Directors. Directors who possess diverse experience and knowledge work to oversee the Bank’s operations.	In FY2023, the Board of Directors discussed important matters involved in the management strategy, including formulation of the FY2024 management plan, the revision of the Medium-term Management Plan (FY2021 through FY2025), the compliance system, and HR Strategies. From the perspective of ensuring the propriety of operations, the Board of Directors also supervised business execution in an appropriate manner.	12 times
Nomination Committee	Comprising five directors (three of whom are outside directors), this committee determines the criteria regarding the election and dismissal of directors. In addition, it determines the content of proposals regarding the election and dismissal of directors that are submitted to general meetings of shareholders.	In FY2023, the Nomination Committee decided on candidates for directors and continued to hold discussions regarding the selection of director candidates for the next term. Moreover, the Committee continued to discuss president succession plans and other matters.	8 times
Compensation Committee	Comprising four directors (three of whom are outside directors), this committee decides the Policy for Determining the Details of Individual Compensation for Directors and Executive Officers. It also decides the content of individual compensation for executive officers and directors.	In FY2023, the Compensation Committee decided on individual compensation for executive officers and directors as well as performance-linked compensation for executive officers. The Committee also discussed officer compensation levels.	5 times
Audit Committee	Comprising five directors (four of whom are outside directors), this committee audits the execution of duties by executive officers and directors and prepares audit reports. The committee also determines the content of proposals regarding the election and dismissal of accounting auditors and the refusal to reelect accounting auditors to be submitted to general meetings of shareholders.	In FY2023, the Audit Committee focused on auditing both internal control system improvements and initiatives to maintain and develop the business. In particular, steps have been taken to prevent internal crimes at the Bank’s directly operated branches and at post offices by developing and strengthening comprehensive crime prevention measures and building a system to promote these measures through the JAPAN POST GROUP. Moreover, the Audit Committee has confirmed that steps for improvement continue to be taken.	14 times
Risk Committee (Voluntary committee)	As an advisory body to the Board of Directors, the Risk Committee comprises three directors (two of whom are outside directors) and two outside experts, who deliberate on important matters related to the status of risk management and provide reports and advice to the Board of Directors.	In FY2023, the Risk Committee deliberated on risks related to market operation, ALM and IT systems in light of the Bank’s risk characteristics. In particular, it deliberated on the investment plan and the result of its assessment as well as the status for cybersecurity and other system updates, and it reported or advised the Board of Directors on important matters from among its discussions.	7 times

	Role
Meetings of Independent Outside Directors	Based on the independent and objective positions of the independent outside directors, the purpose of the Meetings of Independent Outside Directors is to exchange information and share awareness about important matters relating to issues of importance to the management of the Bank and its governance. The Bank also designates all outside directors as independent directors as stipulated by the Tokyo Stock Exchange.

Role

Meetings of Independent Outside Directors

Based on the independent and objective positions of the independent outside directors, the purpose of the Meetings of Independent Outside Directors is to exchange information and share awareness about important matters relating to issues of importance to the management of the Bank and its governance. The Bank also designates all outside directors as independent directors as stipulated by the Tokyo Stock Exchange.

Business Management and Operational Execution

		Role
Executive Committee		The Executive Committee has been established as an advisory body to the President and Representative Executive Officer to hold discussions on important business execution matters.
Internal Control Committee		The Internal Control Committee has been established as an advisory body to the President and Representative Executive Officer to hold discussions on the legal, regulatory and other compliance-related issues as well as other important internal control matters.
Special Committees		The Special Committees assist the Executive Committee in matters requiring specialized discussions.
	Compliance Committee	The Compliance Committee formulates compliance systems and programs and holds discussions and provides reports regarding progress in these matters.
	Risk Management Committee	The Risk Management Committee formulates risk management systems and operational policies. The committee also holds discussions and provides reports regarding progress in risk management matters.
	ALM Committee	The ALM Committee formulates basic ALM plans and operational policies, determines management items, and holds discussions and provides reports regarding progress in these matters.
	Sustainability Committee	The Sustainability Committee formulates action plans with regard to Sustainability and holds discussions and provides reports regarding progress in these matters.
	Information Disclosure Committee	The Information Disclosure Committee formulates basic information disclosure policies, holds discussions, and provides reports on disclosure content and progress in order to ensure the appropriateness and effectiveness of information disclosure.
	Stakeholder Engagement Committee	This committee discusses and reports on the content of the policy and the formulation of plans relating to customer-oriented business operations based on "customer feedback" and "employee feedback", and other important items including the status of implementation.
	Σ Business Strategy Committee	This committee deliberates and reports on the formulation and progress of strategies and plans for the Σ Business, which is a corporate business for creating futures for societies and local communities through investment.

Features of JAPAN POST BANK Corporate Governance (As of July 1, 2024)

[Ratio of outside directors] Outside directors 9/14, Outside directors 64.2% [Ratio of Men to Women] Women 5/14, Women 35.7%

Board of Directors

Skills Matrix

The Board of Directors is comprised of directors with diverse experience and knowledge.

As of July 1, 2024

Name		Experience / Expertise									Committee staffing status
Name		Management (Corporate Management)	Legal / Compliance	Financial Accounting		Market Operation / Risk Management	Sales / Digital Marketing	Human Resource Development	ESG	Administration	Nomination Committee	Compensation Committee	Audit Committee	Risk Committee (Voluntary committee)
Outside Directors	Keisuke Takeuchi	●							●		●	★
	Makoto Kaiwa	●		●					●		★
	Risa Aihara	●					●					●
	Hiroshi Kawamura		●										★
	Kenzo Yamamoto				●	●							●	★
	Keiji Nakazawa		●	●								●	●
	Atsuko Sato				●	●		●						●
	Reiko Amano					●			●		●
	Akane Kato	●						●					●
Internal Nonexecutive Directors	Hiroya Masuda	●			●				●	●	●	●
Internal Nonexecutive Directors	Katsuyo Yamazaki				●			●		●			●	●
Internal Directors	Takayuki Kasama	●			●	●			●		●
	Susumu Tanaka			●	●					●
	Harumi Yano				●	●		●	●

External experts	Takao Yajima	Chairman of specified non-profit organization CIO Lounge					●
External experts	Hiromi Yamaoka	Board Director of Future Corporation, Director Group CSO & CLO					●

*:: The ★ mark refers to committee chairperson.

Reasons for the Nomination as Candidate for Director

Position	Name	Reason
President and Representative Executive Officer	Takayuki Kasama	Mr. Takayuki Kasama was appointed as an executive officer, as he has successively held various important posts in the Investment Division and other departments of the Bank, and has been responsible for the management as President and Representative Executive Officer of the Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations by making use of his abundant experience and track record of achievements.
Representative Executive Vice President	Susumu Tanaka	Mr. Susumu Tanaka was appointed as an executive officer, as he has successively held various important posts in the Corporate Administration Division and other departments of the Bank, and has been responsible for the management as Representative Executive Vice President of the Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations by making use of his abundant experience and track record of achievements.
Representative Executive Vice President	Harumi Yano	Mr. Harumi Yano was appointed as an executive officer, as he has successively held various important posts in the Corporate Administration Division and other departments of the Bank, and has been responsible for the management as Representative Executive Vice President of the Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations by making use of his abundant experience and track record of achievements.
Executive Vice President	Kenji Ogata	Mr. Kenji Ogata was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience in the Compliance Division and other departments of Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Senior Managing Executive Officer	Masato Tamaki	Mr. Masato Tamaki was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience in the Risk Management Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Senior Managing Executive Officer	Hisashi Matsunaga	Mr. Hisashi Matsunaga was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience in the System Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Senior Managing Executive Officer	Makoto Shinmura	Mr. Makoto Shinmura was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience in the Corporate Administration Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Managing Executive Officer	Shinobu Nagura	Mr. Shinobu Nagura was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience in the Operation Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Managing Executive Officer	Satoru Ogata	Mr. Satoru Ogata was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience in the System Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Managing Executive Officer	Hideki Nakao	Mr. Hideki Nakao was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience in the Investment Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Managing Executive Officer	Koji Iimura	Mr. Koji Iimura was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience in the Internal Audit Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Managing Executive Officer	Etsuko Kishi	Ms. Etsuko Kishi was appointed as an executive officer, as she has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on her experience as Chief Director of Tokyo Regional Headquarters and other positions at Japan Post Bank. She is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Managing Executive Officer	Akihiro Den	Mr. Akihiro Den was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience as General Manager of the Operation Management Department in the Operation Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Executive Officer	Masaya Touma	Mr. Masaya Touma was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience as Chief Director of South Kanto Regional Headquarters and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Executive Officer	Katsuya Fukushima	Mr. Katsuya Fukushima was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience as General Manager of the Corporate PlanningDepartment in the Corporate Administration Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Executive Officer	Koji Hasukawa	Mr. Koji Hasukawa was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience as General Manager of the ALM Planning Department in the Corporate Administration Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Executive Officer	Koichiro Yoshida	Mr. Koichiro Yoshida was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience as General Manager of the Marketing Department in the Marketing Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Executive Officer	Hisanori Kato	Mr. Hisanori Kato was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience as General Manager of the Compliance Management Department in the Compliance Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Executive Officer	Yasumitsu Toyoda	Mr. Yasumitsu Toyoda was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience as Chief Director of Kyushu Regional Headquarters and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Executive Officer	Junko Fujie	Ms. Junko Fujie was appointed as an executive officer, as she has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on her experience as General Manager of the Customer Satisfaction Department in the Corporate Administration Division and other positions at Japan Post Bank. She is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Executive Officer	Hiroshi Ueda	Mr. Hiroshi Ueda was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience as Executive Officer of the Digital Strategy Department and the Digital Service Business Department in the Marketing Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Executive Officer	Kenji Aono	Mr. Kenji Aono was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience as Executive Officer of the Regional Relations Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Executive Officer	Hirokazu Yamamoto	Mr. Hirokazu Yamamoto was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience as General Manager of the Human Resources Department in the Corporate Administration Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Executive Officer	Tomotake Yano	Mr. Tomotake Yano was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience as General Manager of the Digital Strategy Department in the Marketing Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Executive Officer	Kenichi Imai	Mr. Kenichi Imai was appointed as an executive officer, as he has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on his experience as General Manager of the Investor Relations Department in the Corporate Administration Division and other positions at Japan Post Bank. He is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.
Executive Officer	Yuko Yoshida	Ms. Yuko Yoshida was appointed as an executive officer, as she has the knowledge and experience to be able to execute the Bank's operations appropriately, fairly and efficiently, based on her experience as Chief Strategy Officer of the CIO Office in the Investment Division and other positions at Japan Post Bank. She is therefore expected to play an adequate role in deciding the business execution of the Bank and executing its business operations.

Independent Director Appointment Standards

Japan Post Bank shall appoint Independent Directors stipulated by the Tokyo Stock Exchange from Outside Directors who do not fall under any of the following.

Those who have served as an Executive of the Japan Post Group in the past.
Those who have served as a Director who is not an Executive of the parent company of Japan Post Bank in the past.
Entities which hold Japan Post Bank as major client or an Executive thereof, etc.
Entities which are major clients of Japan Post Bank or an Executive thereof, etc.
Consultant, accounting expert or legal expert who acquire, or have acquired substantial money or other property from Japan Post Bank other than officers’ compensation (in case of an organization including corporation, association, etc., those who are, or have been affiliated to such organization in the past)
Major shareholder of Japan Post Bank (in case of a corporation, an Executive thereof, etc.)
Spouse or relative within the second degree of kinship of the following (excluding those without significance).
(1) Those listed in 1 to 6 above
(2) Executive of the Japan Post Group (excluding Japan Post Bank)
(3) Director who is not an Executive of the parent company of Japan Post Bank
Those who execute business in a company in which those who execute business, etc. of Japan Post Bank serve as outside officer.
Those who receive a substantial amount of donation from Japan Post Bank (in case of an organization including corporation, association, etc., those who execute business, etc. thereof, or similar)

Appendix

The definitions of the terms in these Standards are as follows.

Japan Post Group	Japan Post Bank, its parent company, subsidiaries and fellow subsidiaries of the parent company
Executive	An executive stipulated in Article 2, Paragraph 3, Item 6 of the Ordinances for the Enforcement of the Companies Act
Executive, etc.	An Executive or those who have been an Executive in the past
Entities which hold Japan Post Bank as major client	An entity which the average annual cash amount paid from Japan Post Bank thereto in the past three fiscal years is over 2% of annual average consolidated total net sales thereof in the past three fiscal years
Entities which are major clients of Japan Post Bank	An entity which the average annual cash amount paid therefrom to Japan Post Bank in the past three fiscal years is over 2% of annual average consolidated ordinary income of Japan Post Bank in the past three fiscal years
Substantial money	Individuals: An average annual cash amount of over ¥10 million in the past three fiscal years Organizations: The average annual cash amount paid from Japan Post Bank to such entity in the past three fiscal years which is over 2% of annual average consolidated total net sales of such entity in the past three fiscal years
Major shareholders	Major shareholders stipulated in Article 163, Paragraph 1 of the Financial Instruments and Exchange Act
Substantial amount of donation	An average annual donation of over ¥10 million in the past three fiscal years

In case transactions or donations relating to the independent directors satisfy the following standards of immateriality, statement on the attribute information of independent directors will be omitted on the judgment that there are no effects on the independence of such independent directors.
(1) Transactions
- 1) The average annual amount paid from Japan Post Bank to such entity in the past three fiscal years is less than 1% of annual average consolidated total net sales of such entity in the past three fiscal years
- 2) The average annual amount paid from such entity to Japan Post Bank in the past three fiscal years is less than 1% of annual average consolidated ordinary income of Japan Post Bank in the past three fiscal years
(2) Donations

An annual average donation from Japan Post Bank is less than ¥5 million in the past three fiscal years

Support System for Outside Directors

The Bank shall take the following actions in relation to directors to ensure the effective and smooth operation of meetings of the Board of Directors and enhance the effectiveness of supervision by outside directors, in particular.

Coordination of an annual schedule with sufficient time available
Timely and appropriate provision of information as necessary
Ensuring sufficient prior explanation and time for prior consideration of the content of agenda items
Ensuring time for questions at Board of Directors’ meetings

In addition, the Bank shall establish the Board of Directors Office and allocate appropriate staff for operational support to effectively and efficiently carry out meetings of the Board of Directors, and for communication and coordination with outside directors.

Providing Opportunities for Outside Directors to Collect Information

To ensure that the expected roles and responsibilities of executives who include outside directors are properly fulfilled, we regularly provide them with opportunities to acquire the necessary knowledge. For example, we provide them with opportunities to deepen their understanding of our business, issues, management strategies, etc., and to acquire the necessary knowledge, such as by conducting inspections of our facilities.

Major training programs for senior management (including outside directors) conducted on a regular basis

Theme	Content of training, etc.
General meetings of shareholders	Training by attorneys on points to keep in mind for directors and corporate auditors speaking at general shareholders' meetings
Sustainability	Training by external instructors on risks related to sustainability (climate change, human capital management, human rights) and matters to be addressed by management
Media Support	Conducted training with outside experts as instructors to deepen understanding of crisis management public relations in light of recent risk trends
Cyber security	Training by external instructors on cyber security measures and incident response from the perspective of raising awareness of the risks of cyber attacks, etc.
Anti-Money Laundering, Terrorist Financing and Proliferation Finance	Conducted training by external instructors as part of the development of a risk management system for money laundering, etc.
International financial regulations related to risk management	Conducted study sessions on capital adequacy regulations, Basel Ⅲ finalization, etc.
Data analysis on sales	Marketing Division analytical PTs held debriefing sessions on the results of sales-related data analysis.

In addition, the Bank strives to enhance support for directors. For example, we provide new outside directors with opportunities for individual explanations of the Bank's operations (management plans, market operations, risk management, compliance, etc.) .
Also, the Risk Committee, which invites outside experts as committee members, is open to directors who are not committee members, so that audit committee members and other directors attend the committee.

Succession plan

At JAPAN POST BANK, the Nomination Committee deliberates on succession plans for executives, including the President and Representative Executive Officer, with the aim of achieving sustainable corporate growth and enhancing corporate value over the medium to long term. The Nomination Committee clarifies the ideal image of the President and Representative Executive Officer in terms of values, qualities, and abilities based on JAPAN POST BANK’s vision. The Nomination Committee then establishes objective evaluation criteria and holds discussions based on them, referring to individual and multifaceted evaluations by external organizations. In addition, we are working to develop human resources based on evaluation criteria for the ideal President and Representative Executive Officer in order to facilitate succession planning.

Elections and Dismissals of Executive Officers, Nominations of Director Candidates

With regard to the policies and procedures for electing or dismissing executive officers and nominating director candidates, the Bank has established the "Criteria for Election or Dismissal of Executive Officers" and the "Criteria for Nomination of Director Candidates."

Related Information

Criteria for Election or Dismissal of Executive Officers (PDF/46KB)

Criteria for Nomination of Director Candidates (PDF/51KB)

Compensation for Directors and Executive Officer

Policy on Determining Remuneration Amounts for Directors and Executive Officers, and the Calculation Methods Thereof

In regard to compensation for the Bank’s directors and executive officers, the Compensation Committee has prescribed the policy for determining the details of individual compensation for directors and executive officers as follows, and it determines the amount of compensation in accordance with this policy.

At the Compensation Committee meeting held on June 18, 2024, the Committee resolved to revise the compensation system for directors and executive officers along with this policy.

1. Compensation system

When serving concurrently as a director and executive officer, compensation shall be paid for the position of executive officer.
Compensation that directors of the Bank receive shall be paid in the form of a fixed amount of compensation corresponding to duties, in light of the scope and scale of responsibility relating to management, and the like.
Compensation that executive officers of the Bank receive shall be paid in the form of a base salary (a fixed amount of compensation), a short-term incentive in the form of a bonus, and a mid-to-long-term incentive in the form of stock compensation (both non-performance-linked and performance-linked), and shall function as a sound incentive for the achievement of performance goals and sustainable growth.

2. Compensation for directors

Compensation for directors shall be paid as a certain level of a fixed amount of compensation corresponding to duties, in light of the main role of supervision of management, and the level shall be an appropriate one that takes into account the scale of duties as a director, the role in each committee, and the current situation of the Bank.

3. Compensation for executive officers

Compensation for executive officers shall be paid in the form of a certain level of base salary (a fixed amount of compensation), in light of differences in responsibility that varies according to the job position, a short-term incentive in the form of a bonus, and a mid-to-long-term incentive in the form of stock compensation (both non-performance-linked and performance-linked).
The level of base salary shall be an appropriate one that takes into account the scale of duties of the executive officer and the current situation of the Bank.
The bonus shall function as an incentive to steadily achieve the performance targets for a single fiscal year. It shall be calculated by multiplying the standard amount according to the responsibilities by a coefficient based on the individual evaluation and a coefficient that varies according to the achievement status of the management plan, and the cash will be paid every year.
In regard to stock compensation, based on the viewpoint of a sound incentive for improving mid- to long-term corporate value and sustainable growth, a fixed amount of points according to the responsibilities shall be granted every year, and points that are calculated by multiplying the sum of basic points corresponding to duties by a coefficient that varies according to the state of achievement of the management plan shall be granted after the end of the final fiscal year of the medium-term management plan, and shares corresponding to the points accumulated at the time of retirement from office shall be provided. However, a certain percentage of this shall be paid in the form of money obtained by converting the shares into cash.
Furthermore, in the case of a person who is an executive officer in charge of an area that requires special knowledge and skills and, based on the compensation corresponding to his/her duties, would receive a significantly lower level of compensation than what an officer in charge of such an area would generally receive at other companies, it shall be permitted to adopt compensation that refers to the level of compensation at other companies instead of compensation corresponding to duties.

*1:

Evaluation based on number of accounts registered in the Yucho Bankbook app, number of Tsumitate NISA operation accounts.

*2:

Evaluation based on balance of risk assets, balance of strategic investment areas, RORA(Return on Risk-Weighted Assets).

*3:

Evaluation based on domestic General Partner(GP)-related investment commitments.

*4:

Evaluation based on balance of ESG-themed investments and financings, ESG ratings from major ESG rating agencies(FTSE, MSCI, CDP, DJSI), ratio of women in managerial positions, ratio of employees with disabilities, childcare leave rate for male employees(more than 4 weeks), evaluation based on employee engagement index.
ESG's valuation weighting in the short-term performance linkage is 15%.
ESG-related indicators are applied to all executive officers, including the President and Representative Executive Officer.

ESG Indicators	Climate change-related	Evaluation weights
Balance of ESG-themed investments and financings	○	3%
ESG ratings from major ESG rating agencies (FTSE, MSCI, CDP, DJSI)	○	3%
Ratio of women in managerial positions		3%
Ratio of employees with disabilities		2%
Childcare leave rate for male employees (more than 4 weeks)		2%
Evaluation based on employee engagement index		2%
Total		15%

(Supplement): Indicators related to climate change will be "Balance of ESG-themed investments and financings" and "ESG ratings from major ESG rating agencies".
Balance of ESG-themed investments and financings is a target related to the balance of investment/ financing balance in ESG bonds and other instruments that use climate change mitigation/adaptation as their financial use.
ESG ratings from major ESG rating agencies includes climate change and provides an objective assessment of the Bank's climate change initiatives.

*5:

Customer-oriented business operations, advancement of DX, human capital management, etc. only particularly noteworthy efforts that contribute to the enhancement of corporate value will be added.

*6:

Points are deducted based on system trouble, noncompliance status, etc.

Incorporation of ESG evaluation items into executive compensation

In promoting overall management and the operations of each division, from the viewpoint of providing sound incentives not only from the short-term perspective of single fiscal year performance, etc., but also for efforts toward the Bank's long-term, sustainable growth, from FY2021, the Bank will reflect the status of promotion of sustainability management in the compensation of executive officers.The evaluation items will be reviewed each fiscal year as necessary in response to changes in the external environment and the Bank's internal environment.

Number of persons compensated, compensation, etc., for each officer category (FY2023)

(Millions of yen)

Category	Number of persons compensated	Compensation, etc.	Base compensation	Performance-linked stock compensation	Retirement benefit	Other
Category	Number of persons compensated	Compensation, etc.
Directors	13	133	133	–	–	0
Executive Officers	31	875	645	202	24	2
Total	44	1,008	778	202	24	2

(Notes)

The figures for compensation, etc., are rounded down to the nearest million yen.
If a person holds concurrent positions as Director and Executive Officer, we do not pay compensation for services as Director to such person.
Number of Directors compensated excludes one Director without pay.
Includes compensation paid to three Directors and five Executive Officers who retired during the fiscal year under review and one Executive Officer who resigned at the end of the fiscal year under review.
Performance-linked stock compensation above represents the amount accounted for as expense during FY2023.
Although the retirement benefits program to Executive Officers was abolished in June 2013, retirement benefits will be paid upon retirement to Executive Officers who have remained in their positions since then, for their terms of office up to the day of the abolishment of the system.

Related Information

ESG Data - Corporate Governance: "Compensation for Directors (excluding outside directors)"

ESG Data - Corporate Governance