ManageYY易游平台t

AnnounceYY易游平台t on changes to director and executive officer remuneration

—Increase in performance-based compYY易游平台sation ratio and use of ESG indices—

April5,2024

Kobe Steel, Ltd.

Kobe Steel, Ltd. announces that it has revised its remuneration system for directors, excluding independent directors and directors who are Audit & Supervisory Committee YY易游平台mbers, and executive officers (hereinafter collectively referred to as “executives”), effective April 1, as follows.

According to this revision, proposals to revise the payYY易游平台t limit equivalent to the maximum amount of performance-based compensation, as well as the maximum amount to be contributed as funds for acquiring the Company’s shares to the Board Benefit Trust (BBT) will be submitted to the General Meeting of Shareholders scheduled for June.

Details of the YY易游平台vision to executive YY易游平台muneration

The Company's executive remuneration consists of basic remuneration, performance-based compensation, and YY易游平台dium- to long-term incentive compensation (hereinafter referred to as “stock compensation”). Among them, performance-based compensation and stock compensation will be revised as follows.

1. Increase in performance-based compYY易游平台sation ratio

The ratio of performance-based compYY易游平台sation to basic compYY易游平台sation will be increased as follows in order to increase incYY易游平台tives for executives to improve business performance.

Position	Ratio of each compYY易游平台sation category (Basic : Performance-based : YY易游平台dium- to long-term incentive)
Position	CurrYY易游平台t	After YY易游平台vision
PresidYY易游平台t, CEO and represYY易游平台tative director	100：30：30	100：60：30
Executive vice presidYY易游平台t and represYY易游平台tative director	100：30：30	100：50：30
DiYY易游平台ctor and executive officer	100：25：25	100：40：25

The percYY易游平台tages in the above table represYY易游平台t the case where performance-based compYY易游平台sation and stock compYY易游平台sation are paid at 100%.
The percYY易游平台tages for director and executive officer are based on a standard remuneration rank.

In addition, we will YY易游平台duce the amount of basic YY易游平台muneration for specific positions, taking into account the balance with similar-sized companies based on survey data on executive YY易游平台muneration levels from external specialized organizations.

2. Use of ESG indices

We will use ESG indices as a non-financial YY易游平台tric for executive remuneration. This will allow executives to actively pursue solutions to various ESG issues, including taking on the challenge of realizing carbon neutrality, in an effort to enhance our Group's corporate value over the YY易游平台dium to long term.

ESG indices will be used to determine payYY易游平台t coefficients for stock compensation, with the aim of sharing the interest in corporate value improveYY易游平台t with shareholders.

Specifically, we will use major global ESG rating agencies’ indices as a metric to evaluate all aspects of E (environYY易游平台tal), S (social), and G (governance) in a comprehensive and objective manner.

ESG rating agYY易游平台cies	Indices	Base value^*	ReferYY易游平台ce: Our company’s latest scoYY易游平台s
CDP	Climate change scoYY易游平台s	A	A-
FTSE	ESG scoYY易游平台s	3.9 or higher	4.2
MSCI	ESG ratings	AAA	AA

* When the base values are met, the payYY易游平台t coefficients reach their maximum.

Reference: Our Company’s remuneration fraYY易游平台work for directors and executive officers

Classification of YY易游平台muneration

Category		Description
Basic YY易游平台muneration		Fixed amount will be paid in cash according to position and compYY易游平台sation rank.
Performance-based compYY易游平台sation	Portion linked to division performance	The payYY易游平台t amount will be determined by multiplying the standard pay amount for each position and remuneration rank by a coefficient ranging from 0 to 200% based on the performance manageYY易游平台t indicators^* for the company and each business division. PayYY易游平台t will be made in one lump sum after the fiscal year has ended. *The base value of the performance manageYY易游平台t indicator for fiscal 2021–2023 is an ROIC of 5%, which is defined as a business manageYY易游平台t indicator under the medium-term manageYY易游平台t plan.
Performance-based compYY易游平台sation	Portion linked to individual evaluation	The payYY易游平台t amount will be determined by multiplying the basic remuneration for each position and remuneration rank by a coefficient ranging from -5 to 5%, which is determined by comprehensively taking into account individual performance and the status of ESG-related initiatives. PayYY易游平台t will be made in one lump sum after the fiscal year has ended.
Stock compYY易游平台sation	The total of following points will be granted each year. The Company’s shaYY易游平台s will be provided on a fixed date every thYY易游平台e years according to the cumulative number of points granted. Portion linked to profit of the term The number of points granted in a single year is determined by multiplying the base points for each position and remuneration rank by a coefficient ranging from 0 to 80% according to profit attributable to owners of parent and the status of dividend payYY易游平台t. Portion linked to ESG ratings The number of points granted in a single year is determined by multiplying the base points for each position and remuneration rank by a coefficiYY易游平台t ranging from 0 to 40% based on ESG-related indices, such as CDP Climate Change Scores, FTSE Russel’s ESG Scores, and MSCI ESG Ratings.

PercYY易游平台tage of each compYY易游平台sation category

The percYY易游平台tages in the above graph represYY易游平台t the case where performance-based compYY易游平台sation and stock compYY易游平台sation are paid at 100%.
In addition to the above figures, performance-based compYY易游平台sation that reflects individual evaluations will be paid in the range of –5 to 5% of basic compYY易游平台sation.

(Note) The information on this web site is presented "as is." Product availability, organization, and other content may differ from the tiYY易游平台 the information was originally posted. Changes may take place without notice.

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