【Hakuho】Introduction of Performance-Linked Stock Compensation System｜May 2026

Overview of the System

Hakuho decided at its Board of Directors meeting on May 19, 2026, to revise the executive compensation scheme and to introduce a performance-linked stock compensation system, 'Executive Compensation BIP Trust,' replacing the traditional restricted stock that was previously used. The system will be implemented over the target business years during the mid-term management plan period (August 2026 – August 2029), utilizing a trust to deliver shares and related assets, aiming to increase the linkage between executive compensation, corporate performance, and stock price. Details of the system include the upper limits for the trust fund amount and the number of shares to be granted, methods for acquiring and transferring shares, and restrictions on voting rights. The implementation is subject to shareholder approval.

Impact on Shareholders and Future Outlook

With the introduction of this system, the executive compensation structure will consist of a basic salary, bonuses, and performance-linked stock compensation. Using a trust to distribute shares aligns the interests of executives and shareholders and promotes long-term corporate value enhancement. The implementation is expected to have a limited effect on share dilution and is anticipated to strengthen corporate governance and motivate executives. Moving forward, the system will be officially launched upon shareholder approval, and the Company will closely monitor its operation and effects.