March 14, 2023
Kawasaki Kisen Kaisha, Ltd.
Notice Concerning Revisions to the Remuneration System for Executives
Kawasaki Kisen Kaisha, Ltd. (hereinafter referred to as “the Company”) hereby announces that it has
resolved to revise its remuneration system (hereinafter referred to as “the Revisions to the RemunerationSystem”) for Directors (Executive directors only) and Executive Officers (hereinafter referred to as“Directors, etc.”), as follows. The resolution was made by the Company’s Board of Directors at its
meeting held today.
In conjunction with the Revisions to the Remuneration System, the Company proposes for the 155th
Ordinary General Meeting of Shareholders scheduled to be held in June 2023 (hereinafter referred to as“this General Meeting of Shareholders”) that the maximum amount of monetary remuneration forDirectors be increased and that the cap on the funds to acquire stock for the performance-based share
remuneration plan and the cap on the total number of points to be granted to Directors (limited toExecutive Directors) be revised. On the condition that such proposals are approved at this General
Meeting of Shareholders, the adoption shall commence from the executive remuneration for Directors
as of the end of the 155th term based on the performance for that fiscal year.
The Revisions to the Remuneration System was resolved by the Board of Directors taking account ofrecommendations of the Remuneration Advisory Committee, which is comprised of a majority of
Independent Outside Directors. The Remuneration Advisory Committee made such recommendations
to the Board of Directors following its own deliberations. Therefore, the procedures are considered tobe objective and transparent.
1.

Purpose of the Revisions to the Remuneration System
The Company will create a remuneration system for executives that aims to maximize corporate
value by setting globally competitive remuneration levels in order to secure and retain talented
executive human resources, establishing a high ratio of performance-based remuneration as
motivation for achieving sustainable growth, improving medium- to long-term management
efficiencies, and promoting sustainability initiatives.

2.

Overview of the Revisions to the Remuneration System
The Revisions to the Remuneration System revise the composition ratios and total amount level of
remuneration for Directors, the performance assessment indicators, the maximum amount ofmonetary remuneration for Directors, and the medium- to long-term performance-basedremuneration plan.
1) Composition ratio and total amount of remuneration
The current remuneration of the Company’s Directors, etc. comprises the following three typesof remuneration.
1(i) Fixed remuneration (monetary): Monthly remuneration set for each position to executebusiness according to the duties and responsibilities.
(ii) Short-term performance-based remuneration (monetary): Remuneration linked to thelevel of achievement relative to the initial targets for performance in the current fiscal
year.
(iii) Medium -to long-term performance-based remuneration (stocks): Remuneration linked tothe total shareholders return (TSR) for the past three-year period including the currentyear.
In this revision, while maintaining the composition consisting of the above remunerations, thetotal amount level and the composition ratio of remuneration are revised with reference toremuneration market research data provided by outside professional organizations.
It is considered appropriate to set enhancement of medium- to long-term corporate value asindicators in the assessment of management, so we have revised the composition ratio ofremuneration giving more weight to medium- to long-term performance-based remuneration.
The revised composition ratio for fixed remuneration, short-term performance-based
remuneration, and long-term performance-based remuneration according to the typical
position is anticipated to be as follows.
In the case of achieving the performance target:(Before revision) 100:30:10 → (After revision) 100:40:65
Short-term performance-linked remuneration varies from 0 to 1.5 times, medium- to long-term
remuneration from 0 to 1.8 times, and performance-linked remuneration is designed to increasein accordance with management responsibility。
2) Revisions to performance assessment indicatorsWe are introducing indicators that motivate the promotion of improved management
efficiencies and ESG to maximize the medium- to long-term corporate value.
Short-term performance-based remuneration: In addition to the existing coefficient linked to
the level of achievement of the targets for consolidated performance (total amount of ordinary
income, amount of ordinary income excluding the containership business, and profit
attributable to owners of the parent) for a single fiscal year, and the coefficient corresponding
to the contribution of the individual, we introduce subtraction indicators related to safety inoperation of ships as ESG indicators.
Long-term performance-based remuneration: Apart from the existing total shareholders return(TSR), we introduce indicators linked to the return on equity (ROE) in the past three years andindicators that assess the improvements in CO2 emissions efficiency as ESG indicators. The
composition ratio for TSR indicators: ROE indicators: ESG (environmental preservation)2

indicators is set at 90:5:5.
3.

Revision to the maximum amount of monetary remuneration for Directors
At its 148th Ordinary General Meeting of Shareholders held on June 24, 2016, the Company gained
approval for the maximum amount of monetary remuneration for Directors of ¥600 million. In
conjunction with the Revisions to the Remuneration System, the Company proposes to this General
Meeting of Shareholders that this be revised to ¥800 million (including ¥111 million for Outside
directors).

4.

Revisions to the medium- to long-term performance-based remuneration plan
The Company announced on April 28, 2016, the introduction of the performance-based share
remuneration plan “Board Benefit Trust (BBT)” (hereinafter referred to as “the Plan”, with a trustestablished based on the trust agreement executed with Mizuho Trust & Banking Co., Ltd. in
relation to the Plan referred to as “the Trust”), resolving this as the executive remuneration at the148th Ordinary General Meeting of Shareholders held on June 24, 2016, which has continued sincethat time.
The Company acquires the reasonably anticipated number of the Company’s stock through theTrust necessary to provide the Company’s Stock, etc. (Note. 1) for a single Period (Note 2). In
conjunction with the Revisions to the Remuneration System, the Company proposes to this General
Meeting of Shareholders that the cap on the funds to acquire stock per period contributed by theCompany is revised from ¥1,300 million (including ¥480 million for Directors) to ¥5,200 million(including ¥2,400 million for Directors). Note, the Plan would establish an amount that is separate
from the maximum amount of monetary remuneration for Directors set forth in 3. above.
In line with this, we plan to partially review the contents of this system and disclose the details
separately.
(Note 1) Refers to the Company's shares and money equivalent to the amount of the Company's
shares converted to the market price.
(Note 2) The four fiscal years from the fiscal year ended March 31, 2017 to the fiscal year ended
March 31, 2020, and each four fiscal years that follows.

For further information, please contact:
Masaya Futakuchi
General Manager, General Affairs Group
Tel: +81-3-3595-5061

3