Governance

Adoption of a Delegated Executive Officer System

J-MAX has adopted a delegated executive officer system to better concentrate the functions of the Board of Directors toward deciding and supervising important issues related to management by appropriately delegating the Company’s business execution.

Executive Remuneration Policy in accordance with the Revised Companies Act

Policy on Executive Compensation

1) Basic Approach and Procedures for Executive Compensation

1. Compensation for Directors (excluding Audit and Supervisory Committee Members, Non-Executive Directors, and Outside Directors) and Delegated Executive Officers consists of monthly remuneration, bonuses, and stock-based compensation. The system ensures linkage with corporate performance and reflects achievements and results.
2. The basic policy on compensation is deliberated by the Nomination and Compensation Committee and decided by the Board of Directors, enhancing fairness and objectivity.
3. Compensation for Audit and Supervisory Committee Members, Non-Executive Directors, and Outside Directors is fixed and does not include bonuses or stock-based compensation.
4. The individual compensation amounts for Directors and Delegated Executive Officers are determined by the Representative Director and President & Executive Officer, based on delegation from the Board of Directors. This includes setting the amounts for fixed and performance-based compensation.
5. In cases such as voluntary resignation, serious violations of laws, regulations, articles of incorporation, or internal rules, or significant damage caused to the Company due to intent or gross negligence, the Board may resolve to demand return of past bonuses and cancel the rights to stock-based compensation.

2) Method for Calculating Monthly RemunerationMonthly remuneration for Directors (excluding Audit and Supervisory Committee Members) and Delegated Executive Officers is determined by the Board after deliberation by the Nomination and Compensation Committee, taking into account industry standards and social conditions. Remuneration for Audit and Supervisory Committee Members is decided by the committee itself.

3) Method for Calculating Bonuses and Stock-based Compensation

1. Bonuses and stock-based compensation are each set at approximately 10% of total executive compensation (based on 100% achievement of performance targets), determined by the Board after deliberation by the Nomination and Compensation Committee. The policy on performance-linked compensation is detailed in section ② regarding such compensation.
2. To promote sustainable corporate value under its mid- to long-term growth strategy, the Company uses the following indicators to determine performance-linked compensation for Directors and Delegated Executive Officers: consolidated operating profit margin, year-over-year growth in consolidated operating profit, consolidated free cash flow, and achievement of business-specific targets/KPIs, depending on the role.Specifically, for the President & Executive Officer, the indicators are consolidated operating profit margin, year-over-year operating profit growth, and consolidated free cash flow. For Vice Presidents and below, the same indicators apply, supplemented by qualitative assessments such as KPI and business plan achievement for their respective divisions.The base values for each indicator are: the forecast at the beginning of the fiscal year for operating profit margin, the previous year's actual figure for growth rate, and the planned value at the start of the year for free cash flow. The payout ratio is set from 0% to 100% based on achievement.Stock-based compensation is linked to long-term performance, calculated by converting the above payout into points (1 point = 1 share), with the cumulative points paid as compensation upon resignation.

Compliance Manual

I Purpose and Basic Stance

Compliance refers to observance of ethical standards and laws and regulations. This Compliance Manual compiles matters that important issues that require particular attention in executing the Company’s activities. As a result, it does not cover all issues and should be taken as a description of basic concepts.
With progress in internationalization, the move toward an information-intensive society, and deregulation, what is most important is each employee’s mental attitude and courageous conscience to follow the philosophy embodied in the Compliance Manual. Toward that end, an important prerequisite is to take “ethical judgments based on good conscience” as the basis of business.
“Ethical judgments based on good conscience” means to step back from one’s individual interests or the interests of the workplace or business and question the appropriateness of one’s conduct from the perspective of an impartial third-party observer. That conduct is considered to be without issues if it would be free of criticism and acceptable regardless of who viewed it. We have but one goal. That is to build a fair workplace and sound business relationships and contribute to the advancement of society through our work. Our mission is to create a prosperous society based on conducting fair business.

II Basic Policies

1) Awareness of social responsibility and public mission
We will be aware of the social responsibility and public mission of our business and undertake sound business management.
2) Compliance with laws and regulations
We will comply with laws and regulations.
3) Fair and transparent business based on the principle of self-responsibility
We will be strongly aware of “self-responsibility”, which means the responsibility a company must take on its own and conduct fair and transparent business based on the principle of self-responsibility.
4) Customer satisfaction
We will make customer safety and satisfaction a constant in our business and provide products and services with sincerity and at appropriate prices.
5) Respect for human rights
We will respect human rights and contribute to the advancement of a sound company.
6) Respect for other cultures internationally
In the era of internationalization, we will respect different cultural traditions and customs.
7) Strict opposition to antisocial forces
We will display strict opposition to antisocial forces.
8) Passing down a prosperous and fair society
We will endeavor to leave a more prosperous environment and fair society.
9) Proactive creation of measures to overcome ethical issues
When we confront difficult ethical issues, we will proactively create measures to overcome them to the satisfaction of all concerned.
10) Appropriate management and use of information
We will take due care to appropriate store and use information from customers and business partners and personal information.