Working Toward the Mobility Society of the Future
Message from
the President
The Source of Our
Value Creation:
What Makes Us Toyota
Value Creation Story:
Working toward the Mobility
Society of the Future
Business Foundations
for Value Creation
Corporate Data
>Message from the CSO > Roundtable Discussion with the Outside Directors > Dialogue with Institutional Investors on Corporate Governance > Corporate Governance
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Decision Policy and Process
Toyota believes that it is critical to appoint individuals
who contribute to decision making aimed at sustainable
growth into the future in accordance with the Toyoda
Principles, which set forth our founding philosophy.
Moreover, these individuals should be able to play a sig-
nificant role in transforming Toyota into a mobility compa-
ny by responding to social change, such as the
emergence of CASE technologies, and contributing to
the solution of social issues, including the SDGs. Toyota's
executive compensation system is an important means
to promote various initiatives and is determined based on
the following policy.
•The system should encourage Members of the Board of
Directors to work to improve the medium- to long-term
corporate value of Toyota
• The system should support compensation levels that will
allow Toyota to secure and retain talented personnel
• The system should motivate Members of the Board of
Directors to promote management from the same view-
point as our shareholders with a stronger sense of
responsibility as corporate managers
The Board of Directors decides by resolution the policy
for determining remuneration for and other payments to
each Member of the Board of Directors. Remuneration is
effectively linked to corporate performance while reflecting
individual job responsibilities and performance.
Remuneration standards in each Member's home coun-
try are also taken into account when determining remunera-
tion amounts and methods.
Remuneration for Outside Members of the Board of
Directors and Audit & Supervisory Board Members consists
only of fixed payments. As a result, this remuneration is not
readily impacted by business performance, helping to
ensure independence from management.
The amounts of remuneration and other payments to
each Member of the Board of Directors and the remunera-
Table 1 Explanation of Indicators
Consolidated
operating income
Fluctuation in Toyota's
market capitalization
Individual performance
evaluation
tion system are decided by the Board of Directors and the
Executive Compensation Meeting, a majority of the mem-
bers of which are Outside Members of the Board of
Directors, to ensure the independence of the decisions.
The Board of Directors resolves the policy for determining
remuneration for and other payments to each Member of
the Board of Directors and the executive remuneration sys-
tem as well as the total amount of remuneration for a given
fiscal year. The Board of Directors also resolves to delegate
the determination of the amount of remuneration for each
Member of the Board of Directors to the Executive
Compensation Meeting. The Executive Compensation
Meeting reviews the executive remuneration system on
which it advises the Board of Directors and determines the
amount of remuneration for each Member of the Board of
Directors, taking into account such factors as corporate
performance as well as individual job responsibilities and
performance, in accordance with the policy for determining
remuneration for and other payments to each member of
the Board of Directors established by the Board of
Directors. The Board of Directors considers that such deci-
sions made by the Executive Compensation Meeting are in
line with the policy on determining remuneration and other
payments for each member of the Board of Directors.
Remuneration for Audit & Supervisory Board Members is
determined by the Audit & Supervisory Board within the
scope determined by resolution of the shareholders' meet-
ing. To decide the compensation for the fiscal year under
review, the Executive Compensation Meeting was held in
May 2021, March 2022, and April 2022. Also, preparatory
meetings attended solely by Outside Directors were held
five times in July, September, and October 2021 and
February and March 2022 as a forum for discussions in
preparation for the Executive Compensation Meeting. The
compensation for the Members of the Board of Directors
was decided with the agreement of all members of the
Executive Compensation Meeting.
Indicator for evaluating Toyota's efforts based on business performance
Corporate value indicator for shareholders and investors to evaluate
Toyota's efforts
Qualitative evaluation of each Director's performance
Major Matters Discussed at the Executive
Compensation Meeting
• Compensation levels according to position
and responsibilities
• Benchmarks and results evaluation for FY2022
Individual performance evaluation
• The remuneration for each individual
Method of Determining Performance-based
Remuneration (Bonuses, Share-based Compensation)
1. Directors with Japanese citizenship
(excluding Outside Directors)
Toyota sets the total amount of remuneration received
by each director in a year ("Annual Total
Remuneration") based on consolidated operating
income, fluctuation in Toyota's market capitalization,*
and individual performance evaluations. The balance
after deducting monthly remuneration, which is fixed
remuneration, from Annual Total Remuneration consti-
tutes performance-linked remuneration.
Toyota sets Annual Total Remuneration based on
position and duties by referencing the executive remu-
neration levels of a benchmark group of companies
located in Japan.
Table 1 Table 2
*Calculated by multiplying the closing price of Toyota's common
stock on the Tokyo Stock Exchange by the number of shares
issued after deducting treasury stock
Method of Setting the Annual Total Remuneration
Annual Total Remuneration is set according to a formula
based on the benchmark results of executive compensa-
tion. Annual Total Remuneration for each position is set
based on consolidated operating income and fluctuation
in Toyota's market capitalization and then adjusted based
on individual performance evaluations. Individual perfor-
mance evaluations take into consideration the individual's
Table 3 Remuneration by Executive Category, Remuneration by
Type, and Number of Applicable Executives
Remuneration by type [million yen]
efforts made in accordance with the Toyoda Principles,
which set forth our founding philosophy, and other
aspects, such as the trust of others and promotion of
human resource development. Based on the evaluations,
the amount of Annual Total Remuneration for each direc-
tor is determined within the range of 50% above or below
the Annual Total Remuneration for each position.
2. Directors with foreign citizenship
(excluding Outside Directors)
Fixed remuneration and performance-based remuneration
are set based on remuneration levels and structures that
allow Toyota to secure and retain talented personnel, taking
into account each member's job responsibilities and the
remuneration standard of his/her home country.
Performance-based remuneration is set based on consoli-
dated operating income, fluctuation in Toyota's market cap-
italization, and individual performance evaluations, taking
into account each member's job responsibilities and the
remuneration standard of his/her home country. The
approach to setting each item is the same as that for direc-
tors with Japanese citizenship (excluding Outside
Directors). Differences in tax rates in Japan and their home
countries may be considered and compensated for.
Share-based Compensation System
The Board of Directors decides share-based compensa-
tion using the maximum values for share-based compen-
sation set at the 115th and 118th Ordinary General
Shareholders' Meetings held on June 13, 2019 and June
15, 2022 (a maximum of 4.0 billion yen per year, with the
total number of common shares of Toyota to be allotted to
the Members of the Board of Directors, excluding Outside
Directors, capped at 4 million). For more details, please
refer to p. 86 of the Securities Report (for the fiscal year
ended March 2022).
Table 3 Table 4
Table 4 Names and Details of Those Who Receive Total Consolidated Remuneration of One
Hundred Million Japanese Yen or More
Company category
Performance-linked
remuneration
Total consolidated remuneration by type (million yen)
Fixed
remuneration
Monthly
remuneration
118
No. of
Executive category applicable remuneration
executives
Monthly
remuneration
Fixed
Performance-linked
remuneration
Bonuses
Share-based
compensation
Total
remuneration
(million yen)
Total consoli-
Name
dated remu-
(executive category)
Bonuses
Share-based
compensation
Retirement
benefits
neration
(million yen)
Directors (of which
Outside Directors)
10
(3)
822
(148)
772
196
(368,000 shares)
1,790
(148)
Reference
value
Evaluation result
for the fiscal year
Audit & Supervisory
Takeshi Uchiyamada (Director) Reporting company
Shigeru Hayakawa (Director)
Akio Toyoda (Director)
79
76 (37,000 shares)
273
Reporting company
Reporting company
74
1
81 (39,000 shares)
156
204
0
481 (230,000 shares)
685
Board Members (of
6
261
261
which, Outside
1 trillion yen
Audit & Supervisory
(3)
(54)
(54)
Koji Kobayashi (Director)
Reporting company
78
0
100 (48,000 shares)
178
Board Members)
210%
James Kuffner (Director)
(Notes) 1. Cash compensation consists of monthly remuneration and bonuses.
2. Performance-based remuneration is set based on the resolution of the Board of
Directors' Meeting on May 11, 2022. Share-based compensation is the number of
shares presented in the table multiplied by the closing price on the day prior to the date
of resolution for the allocation.
(Notes) The fixed remuneration paid to Director James Kuffner by Woven Planet Holdings, Inc., a consolidated subsidiary, includes the amounts of
fixed remuneration paid every three months and every 12 months.
Reporting company.
152
100
906
Consolidated subsidiary Woven
Planet Holdings, Inc.
642
13
Table 2 Method and Reference Value for Evaluating Indicators and
Evaluation Result
Evaluation
weight
Consolidated
operating
70%
income
Fluctuation
in Toyota's
market
capitalization
30%
Evaluation method
Evaluate the degree of attainment of consolidated operat-
ing income in the fiscal year, using required income (set in
2011) for Toyota's sustainable growth as a reference value
Comparatively evaluate the fluctuation in Toyota's market
capitalization for the relevant fiscal year (average from
January through March), using the market capitalization
of Toyota and TOPIX for the previous fiscal year (average
from January through March) as reference values
Toyota's market
capitalization:
22.3 trillion yen
TOPIX:
1,903.60
TOYOTA MOTOR CORPORATION
37
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