The mission of the Compensation Committee is to improve the transparency and fairness of Sompo Group governance by bringing an external perspective to deliberations relating to the remuneration of directors, executive officers and senior vice presidents at all Group companies. We believe it is vital that the executive compensation structure provides truly effective incentives to people in these positions, while also demonstrating effective governance and contributing to growth in corporate value.
In FY2024, while also incorporating the views of external experts, we conducted repeated, comprehensive reviews into whether the Group’s executive compensation structure provided appropriate drivers for helping to prevent reoccurrence of the various malfeasance issues that affected the Group from 2023 onwards, and for promoting SOMPO’s Purpose while enhancing corporate value. Our analysis also considered these issues from the perspective of incentives and stakeholder satisfaction.
The resulting changes aimed at systemic evolution included setting remuneration levels based on market trends and the global realignment of long-term incentives across the Group, both domestically and internationally.
Moreover, to accelerate the realization of the Sompo Group Vision, we have formulated a system of incentives aimed at supporting the new structure in which Group operations have been consolidated into the two business units of SOMPO P&C and SOMPO Wellbeing.
Going forward, the Compensation Committee will continue deliberating how best to create incentives that help build a highly effective Executive compensation structure, thus contributing to growth in corporate value.
Achievements in FY2024
A total of 12 Compensation Committee meetings were held in FY2024. The principal agenda items that were discussed at
these meetings are outlined below.
TOPICS
Formulation of new Basic concept of Compensation for Directors and Executive Officers
The appropriateness of the basic concept of compensation for directors and executive officers and
core elements of executive compensation structure was re-examined following the series of malfeasance issues
that occurred from 2023 onwards.
After ongoing evaluations in FY2024, SOMPO’s Purpose and SOMPO’s Values were established
as the overarching concepts to underpin all elements of the basic concept of compensation for
directors and executive officers. The introduction to the basic philosophy was also rewritten to state
that executive remuneration would be based on the evaluation of the ability to uphold SOMPO’s
Purpose and SOMPO’s Values; implement the new “Group Common Competencies” defining
Group-wide behavioral expectations; and entrench this organizational culture. The creation of stakeholder value
has also been added to the core elements of the executive compensation structure.
The Compensation Committee will continue to develop an executive compensation structure for
the Group, in line with the revised basic concept of compensation for directors and executive officers.
