【Hibiya Sogo Sekou】Review of Executive Compensation System｜May 13, 2026

Overview of the System

Hibiya Sogo Sekou resolved at the Board of Directors to continue and partially revise its performance-linked stock compensation system introduced in FY2017. The system utilizes a trust to assign points based on the achievement of the medium-term management plan and the executive’s position, which are then used to distribute shares or liquid assets. The trust period is three years from September 2026 to August 2029, with plans to expand share acquisition within the trust and increase contributions. The purpose of the system is to enhance corporate value and motivation of executives.

Future Outlook and Impact on Shareholders

The continuation and revision of this system aim to strengthen the linkage between executives’ compensation and performance, thereby promoting long- to mid-term corporate value enhancement. After shareholder approval at the June 2026 meeting, contributions and share acquisitions will be conducted based on the system. The revision may strengthen incentives for executives but could also lead to some dilution of shares and impact shareholder returns. The details include extending the trust period and implementing a point-based reward system based on contribution levels.