Notice of Revised Compensation Scheme for the Company’s Executive Officers

Rhea-AI Summary

Mitsubishi Electric Corporation (MIELY) announced a revision to its executive compensation scheme effective fiscal 2023, aiming to align pay more closely with performance. The new scheme emphasizes a performance-linked structure, incorporating stock compensation and new ownership guidelines to boost corporate and shareholder value. Additionally, the evaluation of compensation will include non-financial metrics such as public trust and sustainability efforts. Governance improvements include malus and clawback provisions to enhance accountability among executives.

Positive

• Revised compensation scheme to be more performance-linked, potentially enhancing shareholder value.
• Incorporation of non-financial performance metrics, addressing public trust and sustainability.
• Established new stock ownership guidelines to strengthen long-term corporate value.

Negative

• None.

TOKYO--(BUSINESS WIRE)-- Mitsubishi Electric Corporation (TOKYO Prime Market: 6503) announced today that the Compensation Committee, at its meeting held on May 25, 2022, decided to revise the compensation scheme for the Company’s Executive Officers and to apply the revised scheme from fiscal 2023, as follows:

1. Purpose of the Revision
The Company has introduced a performance-based compensation scheme, including stock compensation, for its Executive Officers to increase their awareness of the necessity to contribute to enhancing the medium- to long-term corporate value of the Group and to share that value with shareholders. However, we have decided to revise the entire compensation structure for our Executive Officers effective from the fiscal year 2023 to further clarify the roles and responsibilities of Directors and Executive Officers and to more rigorously evaluate their short-, medium-, and long-term incentive compensation based on the achievement level of the performance indices.
The key points of the new compensation scheme for the Company’s Executive Officers are as follows:

• Revised its compensation scheme to make it more performance-linked to implement and achieve the key indicators and priority measures outlined in the Medium-Term Management Plan.
• In addition to rigorously evaluating the achievement of the performance indices in the business units in charge, greater emphasis on incentive compensation to reflect performance indices in non-financial matters, such as restoring public trust, improving employee engagement, and sustainability and ESG-related progresses.
• Revised the stock compensation portion of the compensation scheme and established new stock ownership guidelines to strengthen incentives to sustainably increase corporate value and shareholder value over the medium- to long-term.
• Improved compensation governance by introducing malus and clawback provisions.

For the full text, please visit: www.MitsubishiElectric.com/news/

View source version on businesswire.com: https://www.businesswire.com/news/home/20220601005600/en/

Media Inquiries

Takeyoshi Komatsu

Public Relations Division

Mitsubishi Electric Corporation

Tel: +81-3-3218-2346

prd.gnews@nk.MitsubishiElectric.co.jp

www.MitsubishiElectric.com/news/

Source: Mitsubishi Electric Corporation

FAQ

What changes did Mitsubishi Electric make to its executive compensation scheme?

Mitsubishi Electric revised its executive compensation scheme to be more performance-linked, effective from fiscal 2023.

How will the new compensation scheme impact Mitsubishi Electric's shareholders?

The new compensation scheme aims to increase alignment between executive pay and corporate performance, potentially enhancing shareholder value.

What performance metrics will Mitsubishi Electric use to evaluate executive compensation?

Mitsubishi Electric will evaluate executive performance based on financial results as well as non-financial metrics like public trust and sustainability.

Are there any governance changes related to the new compensation scheme at Mitsubishi Electric?

Yes, the revised scheme includes malus and clawback provisions to improve compensation governance.