Executive Compensation

The Company's basic policy for director compensation is to ensure a level of remuneration appropriate to each director's role and responsibilities, within the limit approved by the General Meeting of Shareholders, while also providing suitable incentives to enhance corporate value and business performance across the TOHO Group. The compensation framework consists of the following components: (1) Base Compensation (Monetary), which is determined based on role, responsibilities, individual performance, and other factors; (2) Restricted Stock Compensation (Non‑Monetary), which is designed to share interests with shareholders through the long‑term enhancement of corporate value; (3) Performance Achievement Bonus (Monetary), which is designed to provide an incentive to achieve annual performance targets; and (4) Performance Share Units (Non‑Monetary), which are linked to the achievement rate of numerical targets and other indicators in the Mid‑Term Plan. For non‑executive directors and directors who are members of the Audit and Supervisory Committee, compensation consists solely of fixed monetary compensation, in consideration of the nature of their duties.