News Releases
Introduction of a Medium-term Performance-linked Stock Compensation System targeted at Konica Minolta's Executive Officers, etc.
Company Name: Konica Minolta, Inc.
Representative: Shoei Yamana, President and CEO
Stock Exchange Listing: Tokyo (First Section)
Local Securities Code Number: 4902
Contact: Mami Iwamoto, General Manager, Corporate Branding Division
Tel: (81) 3-6250-2100
Tokyo (May 11, 2017) - Konica Minolta, Inc. (hereinafter referred to as "the Company”) passed a resolution at the meeting of its Compensation Committee held today to introduce a medium-term performance-linked stock compensation system that utilizes a trust (hereinafter referred to as "System") as an incentive plan for its executive officers and directors excluding outside directors (hereinafter referred to as "Executive Officers, etc.")*1 as follows. The Company will notify the timing at which the trust concerning the System will be created, the total amount of shares to be acquired and other such details separately as soon as they are decided.
1. Introduction of the System
(1) The Company has formulated "SHINKA 2019", Medium Term Business Plan for the three-year period from FY2017 to FY2019. In order to fulfill this Medium Term Business Plan , the Company will introduce the System for the purpose of linking the performance targets set forth in the plan with the compensation of Executive Officers, etc.*2. The System will involve highly transparent and objective performance-linked stock compensation in that the compensation of Executive Officers, etc. will be determined according to the extent to which performance targets are fulfilled, among other factors. It is intended to help boost their motivation to improve the Company's business performance on an ongoing basis and in the medium/long run, and increase Konica Minolta Group's corporate value more than ever before.
(2) Upon introducing the System, the Company will adopt a structure called a Board Incentive Plan trust (hereinafter referred to as "BIP Trust"). Through the BIP Trust, the Company will execute the granting or payment (hereinafter referred to as "Granting, etc.") of Company shares and cash in the amount equivalent to the conversion value of Company shares (hereinafter referred to as "Company shares, etc.") to Executive Officers, etc. depending on such factors as their respective job positions and the extent to which performance targets of the medium-term business plan have been fulfilled.
(3) Compensation based on the System will consist of: "medium-term performance-linked stock compensation", which involves the Granting, etc. of Company shares, etc. to executive officers according to their respective job positions and the extent to which performance targets of the Medium Term Business Plan have been fulfilled; and "medium-term stock compensation”, which involves the Granting, etc. of Company shares, etc. to directors according to their respective roles and terms of office.
*1 The resolution on the introduction of the System was passed today at the meeting of the Compensation Committee, in which outside directors constitute the majority of members and an outside director serves as chairperson. Of note, the Compensation Committee conducts a fair evaluation of the appropriateness of the performance targets, the target fulfillment status, etc. and ensures transparency and objectivity in the decision-making process and outcome with respect to the executive compensation system.
*2 In conjunction with the introduction of the System, the existing stock compensation-type stock options system will be abolished, and new subscription rights to shares will no longer be granted. Compensation of the Company's directors will thus consist of basic compensation in the form of "base salary" and "medium-term stock compensation". Executive officers' compensation will consist of "base salary", "annual performance-linked cash compensation" and "medium-term performance-linked stock compensation". Outside directors' compensation will consist exclusively of "base salary".
2. Structure of BIP Trust (plan)
(i) The Company will have a resolution on the compensation of Executive Officers, etc. passed at the meeting of the Compensation Committee in relation to the introduction of the System.
(ii) The Company will establish stock-granting rules concerning the System at the meeting of the Compensation Committee.
(iii) The Company will contribute cash to beneficiaries to the extent approved by the Compensation Committee in (i), and create a BIP Trust in which beneficiaries are Executive Officers, etc. who meet the beneficiary requirements (hereinafter referred to as "Trust").
(iv) The Trust will acquire Company shares from the stock market by using the cash contributed in (iii) as the source of financing, in accordance with the Trust administrator's instructions.
(v) Dividends of Company shares in the Trust will be paid in the same manner as other Company shares.
(vi) Voting rights for Company shares in the Trust shall not be exercised throughout the Trust period.
(vii) During the Trust period, points will be awarded to Executive Officers, etc. in accordance with the stock-granting rules depending on such factors as their respective job positions and the extent to which performance targets set forth in the Medium Term Business Plan have been fulfilled. If Executive Officers, etc. have met the beneficiary requirements, the Trust will execute the Granting, etc. of Company shares, etc. proportionate to the number of such points.
(viii) In cases where any residual shares have arisen upon the expiry of the Trust period due to the failure to fulfill the performance targets during the Trust period or for other such reasons, the Company plans to either: continue to use the Trust in the form of the System or the same type of incentive plan as the System by amending the Trust agreement and making additional contributions to the Trust; or not continue the use of the Trust, in which case such residual shares will be transferred from the Trust to the Company without charge and the Company will retire such shares by resolution of the Board of Directors.
(ix) Property remaining at the time of the termination of the Trust is slated to be vested in the Company up to the amount of the Trust money after deducting the amount of stock acquisition funds.
(Note) The Trustor may entrust additional cash to the Trust as funds for acquiring Company shares up to the amount of funds for acquiring Company shares approved by the Compensation Committee.
(Reference)
The Company plans to apply the "medium-term performance-linked stock compensation" in the System also to its Group Executives and Technology Fellows.