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

Introduction of Performance-Linked Stock Compensation System

Sanrio has resolved to introduce a performance-linked stock compensation system as a replacement for the current restricted stock compensation system as part of its review of the executive compensation system. This system aims to strengthen the linkage between the remuneration of targeted directors and the company's business performance and stock value, promoting long- to medium-term enhancement of corporate value. Details of the system, subject to shareholder approval, involve the contribution of funds to a trust, which will acquire and deliver shares to officers. The existing system will be abolished, but restricted stock granted beforehand will remain in effect.

System Structure and Future Schedule

The new system grants points based on the officers' performance and position, which are then used to deliver shares or cash equivalents. The trust period is approximately three years, with shares or cash being delivered upon officers' retirement corresponding to their points. The system's official implementation is scheduled to commence after approval at the shareholders' meeting on June 25, 2026. The operation of the system will be decided through deliberation by a committee including independent outside directors.