May 9, 2024

Notice Concerning the Revision of the Executive Compensation System
Kawasaki Heavy Industries, Ltd. (hereinafter, Kawasaki) hereby notifies that in a Board ofDirectors meeting held today, a motion passed for the revision of the compensation system for
Directors of Kawasaki (excluding Directors who are Audit & Supervisory Committee Member, andOutside Directors) and Executive Officers.

1. Purpose of the Revision of the Executive Compensation System
In quest to achieve Group Vision 2030: Trustworthy Solutions for the Future, Kawasaki will
partially revise its Executive Compensation System in order to firmly ensure an even higher
level of value sharing with shareholders and all of the other stakeholders and a mid- to longterm corporate value increase.
2. Outline of the Revision of the Executive Compensation System(1) Reinforced linkage with performance
Kawasaki’s executive compensation is composed of basic compensation (Cash), short-termincentives (Cash), and long-term incentives (Stock).
Reducing basic compensation and increasing short-term incentives to reinforce the linkage
with performance allows the company to steadily achieve targets and increase corporate value.
The long-term incentives consist of a fixed portion and a performance-based portion, anddecreasing the fixed portion and increasing the performance-based portion encourages efforts
to improve corporate value while also enhancing value sharing with all of its stakeholders.
Additionally, to increase corporate value, maintaining the conventional number of granted
shares in general, instead of using the total long-term incentives amount and share value tocalculate the number of shares granted, the company will employ a framework of increasing
the compensation standard as the share value increases.
(2) New valuation indicesPreviously, each executive individually set targets concerning highly effective employee ratios,
ESG (Environment, Society, and Governance), and share value increasing. However, moving
forward, the company will reflect the following in performance-based compensation as
independent valuation indices with shared standards set.
(a) In order to extract an even higher level of activity from the human resources whowork at the company, the ratio of employees with high levels reported for both
Supportive environment and employee engagement in employee engagement

surveys (i.e. highly effective employees) in short-term incentives will be reflected.
(b) In order to encourage overall ESG related efforts, including efforts for CO2 reduction,
the company will employ the following three indices long-term incentives: CO2
emission reduction in its business activities, the degree of the contribution to CO2
reduction around the world through providing the solutions that lead to achievecarbon neutrality, and evaluations by third party-institutions (Dow Jones Sustainability
Index*1).
(c) In order to enhance awareness concerning the increasing of corporate value, sharevalue in long-term incentives as an index will be reflected.
3. Application period
After evaluating FY2024 activities for each index target, the results in executive compensation
in FY2025 onward will be reflected.
*1: Share indices jointly developed by S&P Dow Jones Indices and RobecoSAM[ Image on the Revision of the Executive Compensation System]

For Reference: Compensation Standard of President:*The total long-term incentives amount will increase with increases in share value.