Daily BriefsESG

Daily Brief ESG: Director Compensation Should Be Changed from Stable Compensation to More Variable Compensation and more

In today’s briefing:

  • Director Compensation Should Be Changed from Stable Compensation to More Variable Compensation

Director Compensation Should Be Changed from Stable Compensation to More Variable Compensation

By Aki Matsumoto

  • The reason for high remuneration of foreign directors isn’t only that remuneration is determined based on overseas compensation levels, but also that fixed remuneration for directors in Japan is high.
  • It is hoped that more companies will increase the proportion of variable compensation, and that for shareholders, performance will increase enough to significantly increase variable compensation.
  • In order for directors to fulfill their responsibilities in determining important strategies, the system must be designed to be high-risk and high-return as well as individually disclosed.

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