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Updated on September 7, 2016

The Compensation Committee

Primary role

  • Sets policy on the contents of individual compensation for Directors, Corporate Executive Officers, Corporate Executives
  • Determines the amount and content of individual compensation of Directors and Corporate Executive Officers in accordance with the policy

Composition of the Compensation Committee

The Compensation Committee shall consist of at least three Directors, the majority of whom shall be outside Directors and, as a general rule, at least one Director of the Compensation Committee shall be a Corporate Executive Officer and the chair is to be selected from among the outside Directors; provided, however, that a Director who is a CEO (Chief Executive Officer) or a COO (Chief Operating Officer) of the Sony Group or at any equivalent position shall not be a member of the Compensation Committee (a "Compensation Committee Member"). In determining whether to appoint or remove a Compensation Committee Member, continuity of the Compensation Committee shall be duly taken into account. For a list of the latest members of the Compensation Committee, please refer to the page below.

Basic policy for director remuneration

Taking into account that the primary duty of the Directors is to oversee the performance of business operations of the Sony Group as a whole, as well as setting the fundamental management policies of the Sony Group and other material matters, and the fact that Sony Corporation is a global company, in order to improve the functioning of the Directors, the following two elements constitute the basic policy for the determination of the remuneration of Directors:
  • attracting and retaining an adequate talent pool of Directors possessing the requisite abilities to excel in the global marketplace; and
  • ensuring the effectiveness of the functions of the Directors.

Based upon the above, the remuneration of Directors consists of the following two components:
  • fixed remuneration; and
  • a phantom restricted stock plan.*

The amount of each component is determined by the Compensation Committee in accordance with the basic policy above. Remuneration of Directors is set at an appropriate level based on research by a third party regarding remuneration of Directors of both domestic and foreign companies. No Director remuneration is paid to those Directors who concurrently serve as Corporate Executive Officers.

Basic policy for Corporate Executive Officer remuneration

Taking into account that Corporate Executive Officers are key members of management responsible for executing the business operations of Sony, in order to further improve the business results of Sony Corporation, the following two elements constitute the basic policy for determining the remuneration of Corporate Executive Officers:
  • attracting and retaining an adequate talent pool of Corporate Executive Officers who possess the requisite abilities to excel in the global marketplace; and
  • providing effective incentives to improve business results on a short, medium and long-term basis, reflecting the appropriate balance of priorities among each time period.

Based upon the above, remuneration of Corporate Executive Officers is consists of the following four components:
  • fixed remuneration;
  • remuneration linked to business results;
  • remuneration linked to share price; and
  • a phantom restricted stock plan.*

The amount of each component and its percentage of total remuneration are determined in accordance with the above basic policy with an emphasis on linking remuneration to business results and shareholder value. Remuneration of Corporate Executive Officers is set at an appropriate level determined based on research by a third party regarding remuneration of senior management of both domestic and foreign companies, as well as his/her responsibilities. Specifically, the amount of remuneration linked to business results is determined based upon the consolidated business results of Sony Corporation, such as operating income, and the level of achievement in respect of the business area(s) for which the relevant Corporate Executive Officer is responsible, and the amount paid to Corporate Executive Officers fluctuates from 0 % to 200 %, in principle, of the base fixed remuneration amount.

*
Phantom Restricted Stock Plan: Points, the number of which is fixed every year by the Compensation Committee, are granted to Corporate Executive Officers and Directors every year during his/her tenure, and at the time of resignation, the remuneration amount is calculated by multiplying Sony Corporation's common stock price by the Corporate Executive Officer's or Director's accumulated points. A resigning Corporate Executive Officer or Director must purchase Sony Corporation's common stock with the remuneration received.

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