Notice Regarding Revision of Executive Compensation System

Overview of the Revision to the Executive Compensation System

TOPPAN HOLDINGS revised the compensation system for directors and executive officers with titles in conjunction with the launch of the new medium-term management plan. The compensation consists of fixed remuneration and variable remuneration (performance-linked bonuses and performance-linked restricted stock compensation), with a particular emphasis on increasing the ratio of variable remuneration to strengthen short-term and medium-to-long-term incentives. Outside directors receive only fixed remuneration, prioritizing fairness and transparency. The compensation level aims to be in the upper-middle range among comparable manufacturers listed on the Tokyo Stock Exchange Prime Market.

Details and Decision Process of Variable Remuneration

Performance-linked bonuses are calculated using evaluation metrics including Non-GAAP operating income, Non-GAAP ROE, and ESG indicators (CO2 reduction, employee engagement). Restricted stock compensation similarly links to performance indicators, aiming to share shareholder value and retain outstanding personnel. In case of significant misconduct, forfeiture or reclaiming of compensation is possible. Total compensation and the system are deliberated by the advisory committee, resolved by the board of directors, and submitted to the shareholders meeting if necessary.