Board of Directors & Executive Officers

• Board of Directors & Executive Officers

Basic Policy on the composition of the Board of Directors

Our basic policy is to compose the Board of Directors of internal directors who possess operational experience, knowledge, and expertise, enabling them to appropriately understand the status of business execution and make agile, prompt decisions while supervising execution, and multiple outside directors who chiefly possess management experience at other companies and can raise issues based on perspectives required by stakeholders and society.

Under this basic policy, the Board of Directors currently consists of 9 members, including 4 outside directors who are independent officers, meaning that at least one-third of the Board of Directors is composed of independent outside directors. Furthermore, we promote diverse management regardless of gender, nationality, or race, and have appointed 2 female directors. In addition, many directors have experienced overseas assignments for several years (the average number of years of overseas assignment for internal directors is approximately 7 years). We believe that this ensures a certain level of diversity, including from the perspectives of gender and internationality.

Basic principles of the Compensation System

Based on the relationships of trust with stakeholders that our Group has built by sincerely walking the path of integrity, we aim to contribute to business over the short, medium, and long term in an era where economic value and social value are in a "trade-on" relationship. Through these efforts, we strive to realize our Ideal State: "NAGASE — Contributing to the well-being of people and the planet by solving challenges faced by our customers and society through materials."
To drive the realization of this vision, our remuneration system for Internal Directors and Executive Officers is designed based on a fundamental policy of aligning incentives with shareholder value, enhancing the incentive effects for improving performance and corporate value over both the short and medium term, ensuring competitive remuneration levels in the market, and maintaining a highly transparent and objective system and decision-making process.

<Compensation level and compensation structure>

The Company uses objective external compensation data to benchmark NAGASE against competitive domestic companies in both business operations and talent acquisition. NAGASE sets its compensation levels at or above the market median of such data, taking into account business conditions and other relevant factors. In doing so, NAGASE aims to attract and retain diverse, skilled human capital capable of accelerating business transformation and to foster the growth ambition of the next generation of management leaders.

The indicated ratios show the proportion of each compensation type, assuming 100% achievement of performance targets based on the standard value. Director, senior adviser not eligible for stock-based compensation are excluded.

• *1. Stock-based compensation will be provided in a trust.
• *2. However, the Company will evaluate fiscal 2025, the final year of the current medium-term management plan, based on a single fiscal year.
• *3. Transfer restrictions are lifted upon resignation in the event that an officer retires during the three-year period.

<Matters Concerning Performance-Linked Remuneration>

The Company's performance-linked remuneration consists of annual bonuses, which are paid based on the financial results of a single fiscal year, and performance-linked stock remuneration, which typically uses a three-fiscal-year evaluation period. However, since fiscal year 2025 is the final year of the Medium-Term Management Plan, the performance-linked stock remuneration for this year is also based on a single-year evaluation.
The evaluation metric for the annual bonuses is operating income, which is a key financial indicator for the Company. As part of our policy to enhance corporate value, we aim to expand operating income by improving profitability and efficiency.

To enhance incentives for sustainable growth in corporate value, the performance-linked stock remuneration is structured as Performance Share Units (PSU), utilizing a continuous three-fiscal-year evaluation period. The number of shares to be granted under the PSU scheme is calculated using the formula shown in the table below:

<Matters of GSM Resolutions on Executive Remuneration>

At the Annual General Meeting of Shareholders held on June 18, 2025, it was resolved that the maximum amount of remuneration for Directors shall be within 800 million yen per year (of which, the amount for Outside Directors shall be within 80 million yen per year). This amount does not include the employee salary portion for Directors who concurrently serve as employees. The number of Directors at the conclusion of the said Annual General Meeting of Shareholders was nine (including three Outside Directors).
In addition, separate from the framework above, it was resolved at the Annual General Meeting of Shareholders held on June 18, 2025, that the stock remuneration framework for Directors (excluding Outside Directors and Director-Advisors) shall be within 80 million yen per year (and within 46,000 shares) for the restricted stock remuneration corresponding to fixed points, and within 120 million yen per year (and within 69,000 shares) for the performance-linked stock remuneration corresponding to performance-linked points. The number of eligible Directors at the conclusion of the said Annual General Meeting of Shareholders was five.
Furthermore, it was resolved at the Annual General Meeting of Shareholders held on June 21, 2019, that the maximum amount of remuneration for Audit & Supervisory Board Members shall be within 100 million yen per year. The number of Audit & Supervisory Board Members at the conclusion of the said Annual General Meeting of Shareholders was four.
Monetary remuneration consists of base remuneration and annual bonuses. For the base remuneration, which is fixed remuneration, the annual amount is paid in equal monthly installments, while the annual bonuses, which are performance-linked remuneration, are paid in a lump sum at the end of June. Non-monetary remuneration consists of performance-linked stock remuneration and restricted stock remuneration. For the performance-linked stock remuneration, stock granting points are determined based on the degree of achievement of medium-term KPIs over a continuous period of three fiscal years, and shares are granted annually (subject to a three-year transfer restriction after delivery). For the restricted stock remuneration, restricted stock equivalent to a standard amount based on roles and responsibilities is granted annually, and the transfer restrictions are lifted upon retirement.

<Matters Concerning the Policy for Determining the Content of Remuneration, Etc. for Individual Directors>

The policy regarding the determination of the amount of executive remuneration or its calculation method is established through consultation with the Remuneration Committee, the majority of which is composed of Outside Directors, followed by deliberations by the Board of Directors. In order to attract and retain talented and diverse human resources who can accelerate corporate transformation, as well as to stimulate the motivation for growth among next-generation executive talent, we utilize objective external remuneration data and benchmark against domestic companies that compete with us in terms of business and recruitment. Within this peer group, we target a remuneration level at or above the median, taking into account our management environment and other factors.
The remuneration mix is structured so that the ratio of variable remuneration to total remuneration ranges from 40% to 67% (at standard evaluation) depending on roles and responsibilities, serving as an incentive for the sustainable enhancement of corporate value. In light of their duties, the remuneration for Outside Directors and Audit & Supervisory Board Members consists solely of base remuneration, which is fixed remuneration.

Breakdown of Compensation and Total Amounts（Fiscal year ended March 2026）

Important Matters regarding Employee Bonuses for Employees Also Serving as Directors（Fiscal year ended March 2026）

• ※The total amount of remuneration, etc. mentioned above includes the remuneration for one Director and one Audit & Supervisory Board Member who retired upon the conclusion of the 110th Annual General Meeting of Shareholders held on June 18, 2025.

Sustainability-related Indicators for Compensation

In recent years, there has been a shift from a “trade-off” mentality, in which social value and economic value are incompatible, to a “trade-on” mentality, in which social and especially environmental considerations are a prerequisite for economic value. As Nagase moves forward with corporate activities based on this “trade-on” approach, we added ESG-related indicators (Currently Sustainability-related indicators) to our performance-linked indicators from FY2024 in order to strengthen the linkage between our sustainability-related initiatives and executive compensation.

<Sustainability-related Indicators Evaluation Indicator>

①Employee engagement
②Carbon neutral
③External evaluation

• ※We will set appropriate evaluation indicators depending on the status of materiality (key issues) at our company.

Status of Audit by Audit & Supervisory Board Members

Audit & Supervisory Board audits are conducted by four Audit & Supervisory Board Members, including three full-time members (of whom one is an outside member) and one part-time member (an outside member), and this group includes members with a considerable degree of knowledge in finance and accounting. To ensure the effectiveness of these audits, one staff member from the Audit Office (the internal audit department), who possesses extensive expertise in finance, accounting, and internal auditing, has been appointed to assist the Audit & Supervisory Board Members.

The Audit & Supervisory Board meets monthly in principle and additionally on an as-needed basis. In these meetings, each member reports on their audit activities and findings, and various opinions are exchanged regarding audit perspectives and the communication of views.

Status of Audit by Internal Auditors

The internal audit is conducted by 11 employees, including certified internal auditors (CIA) and qualified internal auditors (QIA) with expert opinions on internal auditing, who audit the appropriateness and efficiency of the business activities of the Company and its subsidiaries in accordance with the internal audit rules.

Status of Audit by Independent Auditor

Independent audits are performed in a fair and impartial manner by the following specified limited liability partners.

Neither of the certified public accountants, who have executed the aforementioned duties, have performed audits continuously for more than seven years.

Outside Director

NAGASE has three outside directors, Ms. Ritsuko Nonomiya, Mr. Noriaki Horikiri and Mr. Toshiaki Mikoshiba. All three are independent outside directors based on the definition set forth by the Financial Instruments Exchange.

Details (Outside Directors’ Relationship with the Company)

Corporate Governance Report (pdf:658KB)

Outside Auditors

Our outside auditors are Masaya Ishida and Iwao Matsui, both of whom are independent officers as defined by the rules of the financial instruments exchange.

Details (Outside Directors’ Relationship with the Company)

Corporate Governance Report (pdf:658KB)

Criteria for appointment of external officers

The candidate for external director is a person who can raise issues based on his or her honest personality, high insight and ability, and the perspectives of stakeholders and society. The Representative Director selects those candidates, and after deliberation by the independent Nominating Committee, the Board of Directors deliberates and makes a resolution, which is then submitted to the Shareholders’ Meeting.

With regard to audit and supervisory board members, the Representative Director selects candidates from among those who meet the requirements set forth in the Corporate Auditor Auditing Standards, and after prior consultation with the Audit and Supervisory Board and obtaining their consent, the Board of Directors deliberates and makes a resolution, and the matter is submitted to the Shareholders’ Meeting. In addition, our Company discloses the reasons for the nomination of each candidate for director and each candidate for audit and supervisory board member in the reference documents of the Notice of Convocation of the Shareholders’ Meeting.

Directors’ Self-Dealing & Conflict-of-Interest Transactions

The regulations of the Board of Directors stipulate that directors or executive officers must obtain the approval of the Board of Directors in the event that they engage in own transactions or transactions with conflicts of interest.

Directors' compensation and shareholder voting rights

The Company's Articles of Incorporation stipulate that the total amount of remuneration for Directors, etc. shall be determined by a resolution of the Shareholders’ Meeting.

Communication with Analysts and Institutional Investors

By providing briefings on medium-term management plans and financial results, we offer forums where analysts and institutional investors can directly interact with management. Briefing session materials are published both in Japanese and English. In addition, members of management, including the President, regularly visit institutional investors and engage in active dialogue.

Communication with Individual Investors and Shareholders

In order to help outside parties gain an understanding of the NAGASE Group, we have set up a subsection of the investor relations section of our website, called “Individual Investors.” In addition, we hold briefings for individual investors to provide an easy-to-understand introduction of our global business activities, as well as NAGASE Group management strategies and performance reports.