Compensation for Directors, Executive Officers, and Audit & Supervisory Board Members

OMRON has set up Compensation Advisory Committee for the purpose of bolstering the management oversight function of Board of Directors by enhancing transparency and objectivity in determining compensation amounts for each director and executive officer.In response to a consultation request from the chairperson of Board of Directors, Compensation Advisory Committee deliberates on and makes recommendations regarding the Compensation Policy for Directors. Compensation Advisory Committee also deliberates on and determines the Compensation Policy for Executive Officers in response to a consultation request from the CEO. Reflecting the committee's recommendations, Board of Directors determines the Compensation Policy for Directors. Based on the above-mentioned respective Compensation Policy, Compensation Advisory Committee deliberates on compensation of Directors and Executive Officers. The amounts of compensation for individual Directors shall be determined by a resolution of Board of Directors, reflecting the recommendations of Compensation Advisory Committee. These amounts shall be within the maximum limit of the sum of compensation amounts for all directors, as set by a resolution of the General Meeting of Shareholders. The amounts of compensation for individual executive officers shall be determined according to the recommendations of Compensation Advisory Committee.

The amounts of compensation for individual Audit & Supervisory Board members shall be determined in accordance with the Compensation Policy for Audit & Supervisory Board Members, which is set forth through discussions among Audit & Supervisory Board members. These amounts shall be within the maximum limit of the sum of compensation amounts for all Audit & Supervisory Board members, as set by a resolution of the General Meeting of Shareholders.

Compensation Policy for Directors

Overview of Compensation Structure for Directors

(1)Compensation composition ratio

Compensation consists of a “base salary” (fixed compensation) and compensation according to Company performance, namely “short-term performance-linked compensation (bonuses)” and “medium-to-long-term, performance-linked compensation (stock compensation).” The ratio of compensation consisting of performance-linked compensation compared to base salary has been determined for each role:

(2)Base salary

A base salary is paid monthly to Directors as fixed compensation. Base salaries are determined for each role by taking into account the salary levels of officers at other companies (benchmarked companies of the same industry and scope selected by the Compensation Advisory Committee), as surveyed by a specialized outside organization.

(3)Short-term performance-linked compensation (bonuses)

Bonuses are paid as a lump sum after the fiscal year concludes to Directors excluding Outside Directors as short-term performance-linked compensation, which is linked to yearly performance indicators and the degree of achievement of performance targets. Director bonuses varies according to the achievement of operating income, net income, and ROIC targets defined in the annual operating plan.

(4)Medium-to-long-term, performance-linked compensation (stock compensation)

Stock compensation is granted to Directors as medium-to-long-term, performance-linked compensation. Stock compensation consists of a performance-linked component (60%), which is linked to the achievement of performance targets during the applicable period, and a non-performance-linked component (40%), which is intended to promote retention and motivate Directors to enhance share prices over the medium to long term and is granted on the condition of serving a certain period (for Outside Directors, only the non-performance-linked component applies). Stock compensation is granted after retirement from office.
The performance-linked component fluctuates within a certain range depending on the degree of achievement of performance targets during the applicable period.
If a Director commits serious misconduct that causes damage to the Company during their term of office, the Compensation Advisory Committee will deliberate and make a recommendation, and, based on this, the Board of Directors may resolve to restrict the payment of stock compensation.

*1 Indicator that compares total shareholder return (TSR) of OMRON in the covered period to the percentage change of TOPIX, dividends included (Relative TSR = TSR ÷ Percentage change of TOPIX, dividends included)
*2 The reduction ratio has been recalculated based on the new standards following a review of the scope of data included in the base year.
*3 The “employee engagement score (global)” is the average percentage of positive responses in the three categories, “fulfilment,” “inclusion,” and “well-being,” (a total of 9 questions) of the employee engagement survey VOICE, multiplied by 100.
*4 A survey designed to measure the level of employee engagement and the factors that influence it

In the event that an individual Director in question engages in serious misconduct during their term of service, and such misconduct harms the Company, the Compensation Advisory Committee will deliberate and make a recommendation. Based on this discussion and recommendation, the Board of Directors shall resolve to limit the payment of stock-based compensation.

(5)Performance indicators of performance-linked compensation

• The performance indicators for short-term performance-linked compensation (bonuses) are set based on the financial targets defined in the short-term management plan.
• The performance indicators for medium- to long-term performance-linked compensation (stock compensation) are established from metrics for evaluating corporate value and sustainability, in order to achieve the Company’s medium- to long-term and sustainable growth.

• Interview with the Chairperson of the Compensation Advisory Committee 2025
• Advanced Compensation Governance for Improving Corporate Value (Integrated Report 2021)

* A similar compensation policy and structure have been adopted for executive officers toward achieving medium- to long-term performance targets.

Compensation Policy for Audit & Supervisory Board Members

Fiscal 2025 Amount of Compensation of Directors and Audit & Supervisory Board Members

Notes:

1. The amounts include compensation paid to two (2) Audit & Supervisory Board Members who retired at the close of the 88th Ordinary General Meeting of Shareholders held on June 24, 2025.
2. The maximum limit of the aggregate compensation of Directors was set at JPY 35 million per month (by resolution of the 63rd Ordinary General Meeting of Shareholders held on June 27, 2000; the said resolution pertained to seven (7) Directors). The amounts of base salaries for each Director are determined by resolution of the Board of Directors based on discussions by and recommendations from the Compensation Advisory Committee.
3. The maximum limit of the aggregate compensation of Audit & Supervisory Board Members was set at JPY 11 million per month (by resolution of the 81st Ordinary General Meeting of Shareholders held on June 19, 2018; the said resolution pertained to four (4) Audit & Supervisory Board Members). The amount of base salary for Audit & Supervisory Board Members is determined by discussions among Audit & Supervisory Board Members.
4. The maximum limit of Directors’ bonuses was set at JPY 600 million per year (by resolution of the 81st Ordinary General Meeting of Shareholders held on June 19, 2018; the said resolution pertained to five (5) Directors). The amount of bonus for each Director is calculated based on the targets and actual results of operating income, net income, and ROIC for the 89th term (fiscal year ended March 31, 2026), and determined by resolution of the Board of Directors based on discussions by and recommendations from the Compensation Advisory Committee. Each indicator’s actual results include the results of the DMB (Devices & Module Solutions Business), which is classified as a discontinued operation. The actual result of operating income was JPY 63,600 million. For the results of net income and ROIC, please refer to the graphs of trends in the consolidated performance (available in Japanese only).
5. The 88th Ordinary General Meeting of Shareholders held on June 24, 2025 made a resolution: the maximum limit of money to be contributed by the Company is JPY 1.6 billion (including JPY 60 million for Outside Directors), and the maximum limit of the number of the Company’s shares to be granted and delivered as sales proceeds (“grant(ing), etc.”) is 534,000 shares (including 20,000 shares for Outside Directors) during the two fiscal years from fiscal 2025 to fiscal 2026. The said resolution pertained to eight (8) Directors (including three (3) Outside Directors). Stock compensation comprises the performance-linked component and the nonperformance linked component. Outside Directors will be granted only the non-performance-linked component. Regarding stock compensation, the Company shall award points to Directors calculated according to a prescribed formula, and the trust shall grant, etc. the Company’s shares corresponding to the points awarded during a certain period to the Directors. The final calculation of the number of points to be granted and the actual delivery will be carried out after the end of the covered period from fiscal 2025 to fiscal 2026, but the expenses of stock compensation, as indicated above, are associated with the points granted during the fiscal year under review. The amount of stock compensation for each Director is calculated based on the sustainability evaluation (reduction of greenhouse gas emissions, engagement survey indicators) targets and achievements, as well as the corporate value evaluation (relative TSR), and determined by resolution of the Board of Directors based on discussions by and recommendations from the Compensation Advisory Committee.
6. No Directors of the Company received any employee wages other than their compensation as Directors.