Executive Remuneration
The Policy for Determining Remuneration and the like for Directors（excluding Directors who are Audit and Supervisory Committee Members）, etc
System of Remuneration and the Like
Remuneration for the Directors (excluding Outside Directors and Non-Executive Directors) consists of base remuneration and performance-linked remuneration (bonuses), and this system is established to serve as an incentive for achieving sustained growth and enhancing the corporate value of the Group. Part of the base remuneration is the remuneration to be contributed to the Sumitomo Pharma Officers Shareholders' Association for the purpose of acquiring shares of the Company. The Directors continue to hold the shares they acquire through the said Association during their term of office and for one year after their retirement. Through such measures, the Directors' willingness to contribute to the increase of corporate value in the medium- to long-term is enhanced and value sharing with shareholders is promoted.
Remuneration for the Outside Directors and Non-Executive Directors consists of base remuneration only, and the Company adopts a remuneration system where the business performance of the Company is not linked thereto, for the purpose of securing the supervisory function and independence of the Outside Directors.
The base amounts are set with respect to the base remuneration and performance-linked
remuneration (bonuses) according to each position, such as
Representative Director. The ratios of the base amount of the base remuneration and the performance-linked
remuneration (bonuses) of the Directors (excluding Outside Directors and Non-Executive Directors) are set to be 70% for the base
remuneration and 30% for the performance-linked remuneration (bonuses), with respect to the total amount of
the remuneration (when the performance-linked elements described in "Method of Calculating the amount of
performance-linked Remuneration (bonuses)" and individual performance are all considered standard).
The total amount of the remuneration and the like shall be not more than 500 million JPY annually as approved
at the Shareholders' Meeting.
Method of Calculating the Amount of Performance-Linked Remuneration (Bonuses)
The amount of the performance-linked remuneration (bonuses) for the Directors (excluding Outside Directors and Non-Executive Directors) is calculated based on the performance-linked elements and individual performance, and is calculated to be within the scope of zero to 200% of the base amount.
The performance-linked elements are evaluated by the Nomination and Compensation Committee based on the degree of achievement of targets, using as indicators the "core operating profit," which was set as a profit indicator showing recurring profitability of a company within the Group and serves as an original performance management indicator; "R&D results" which are the base of the business activities of the Group and important to its continuous growth; and "operating cash flow" which serves as the investment fund for R&D and related activities. The individual performance is evaluated by the Nomination and Compensation Committee based on the degree of achievement of performance targets of each Director (excluding Outside Directors and Non-Executive Directors). Regardless of the result of the calculation, the performance-linked remuneration (bonuses) will not be paid if no dividend is paid throughout the relevant business year.
Method of Determining Remuneration and the Like
Remuneration and the like for individual Directors are determined by the Board of Directors based on the recommendation from the Nomination and Compensation Committee after the Board of Directors seeks such recommendation and the Nomination and Compensation Committee deliberates the relevant matters. When the Board of Directors determines to delegate the decision-making thereof to the Representative Director, President and CEO, the Representative Director, President and CEO shall determine the same, respecting and in accordance with the recommendation made by the Nomination and Compensation Committee to the Board of Directors.
Remuneration and the like of Directors who are Audit and Supervisory Committee Members
Directors who are Audit and Supervisory Committee Members receive only base remuneration. The details of individual remuneration and the like are determined through consultation among the Directors who are Audit and Supervisory Committee Members, within the annual limit of 100 million JPY as approved at the 205th Annual General Meeting of Shareholders held on June 26, 2025.
Amount of Executive Remuneration (Fiscal 2024)
The remuneration and the like for fiscal 2024 has been calculated in accordance with the previous remuneration system for Directors, which was in place prior to the transition. With respect to the remuneration and the like, Toru Kimura, Representative Director, President and CEO, who oversees the overall operations and is fully informed of the execution of duties by all Directors (excluding Outside Directors), determines under delegation from the Board of Directors . The Nomination and Compensation Committee confirms that such details are in accordance with the system of remuneration for Directors. Based on the above, the Board of Directors has determined that the finalized content of the remuneration and the like is in alignment with the Policy for Determining Remuneration and the like for Directors. Pursuant to the resolution of the Annual Shareholders’ Meeting held on June 26, 2025, the Company has transitioned from a company with an Audit & Supervisory Board to a company with an Audit and Supervisory Committee.
| Category of Officer | Total Amount of Remuneration | Amount of Remuneration by Type | Number | ||
|---|---|---|---|---|---|
| Base Remuneration | Performance-Linked Remuneration (Bonuses) | Other remuneration | |||
| Directors (excluding Outside Directors) | ¥126mn | ¥136mn | − | − | 8 |
| Audit & Supervisory Board Members (excluding Outside Audit & Supervisory Board Members) | ¥50mn | ¥50mn | − | − | 2 |
| Outside Directors and Outside Audit & Supervisory Board Members | ¥98mn | ¥88mn | − | ¥10mn | 7 |
- (Note)
- 1.The amount of remuneration and the like for Directors that was determined by resolution at the 201st Annual Shareholders' Meeting held on June 24, 2021, does not exceed 700 million yen annually, and the number of Directors concerned under this resolution was nine (9).
- 2.The amount of remuneration and the like for Audit & Supervisory Board Members that was determined by resolution at the 185th Annual Shareholders’ Meeting held on June 29, 2005, does not exceed 100 million yen annually, and the number of Audit & Supervisory Board Members concerned under this resolution was four (4).
- 3.The total amount of remuneration and the like for twelve (12) Directors is 186 million JPY, and the total amount of remuneration and the like for five (5) Audit & Supervisory Board Members is 88 million JPY.
- 4.The Directors (excluding Outside Directors) include four (4) Directors who retired upon the conclusion of the 204th Annual Shareholders’ Meeting held on June 25, 2024.
- 5.As for base remuneration for Directors (excluding Outside Directors), reduction was made from April 2024 to March 2025 by 30% for the Representative Director, President and CEO, and by 20% for other Directors (by 10% for April 2025) in light of a challenging business situation. From April 2025 to June 2025, reduction was made by 30% for the Representative Director, President and CEO, and by 20% for other Directors. From July 2025 to June 2026, reduction will be made by 10% for the Representative Director, President and CEO.
- 6.As for performance-linked remuneration (bonuses) for Directors (excluding Outside Directors), such remuneration based on the performance of the fiscal year under review will not be paid in light of the challenging business situation.
- 7.Other remuneration for the Outside Directors and Outside Audit & Supervisory Board Members indicates the amount of remuneration for activities as members of any relevant committees.