Executive Compensation Consulting
The Corporate Governance Study Group Report released on March 22, 2017 recommended that compensation policies and key management performance indicators comply with management strategy.
Going forward, there is now an awareness that it is important to make compensation easier to understand for outsiders and of the correlation between the mid-term management plan, executive compensation, and a company’s governance structure (i.e. compensation committee).
At IR Japan, we propose compensation policies that comply with management strategy. We make these proposals based on input from your CEO, CFO and other top management.
Distinctive Features of Our Executive Compensation Consulting
Designing an executive compensation plan that complies with management strategy
We not only provide our support in introducing stock-compensation schemes, but also provide our complete support services that range from formulating a mid-term management plan, selecting KPIs, establishing a compensation committee, and creating a fee table (overall remuneration structure including cash-based pay).
Source: CGS Study Group Report Guidebook for the establishment and operation of effective governance systems
Consulting tailored to your company
Compliance with the following requirements is necessary when introducing restricted stock (RS) :
- Requirement for deductibility as fixed compensation notified in advance under the Corporation Tax Act
- Requirement for conditions in schedule of granting RS to directors under the Companies Act
It is also important to consider insider trading regulations when utilizing treasury stocks. Additionally, it is also critical to avoid errors while creating legal documentation and filing statutory disclosure documents.
We conduct thorough consultations with our clients, and our support services include building a to-do list, creating a summary of scheme options to be considered. We also provide our supports in the drafting of disclosure documents and a schedule for tax deduction purposes.
We can also assist with special circumstances such as arranging payouts to executive management at subsidiaries and granting phantom stock to non-residents of Japan.
(Consultation regarding direct stock grants to non residents of Japan should be made separately.)
Creating a compensation scheme that institutional investors will understand
Our company annually conducts approximately 900 projects for shareholder identification, and projects voting results at AGM in advance. In addition, we also visit investors regularly. These help us understand domestic and overseas institutional shareholders’ views regarding executive compensation. We provide advice during the consultation that takes into account ISS’s proxy voting guideline, your major shareholders’ general voting guidelines as well as those shareholders’ guidelines regarding remuneration.