Epson Partially Amends Corporate Governance Policy

- TOKYO, Japan, June 29, 2022 -

Seiko Epson Corporation (TSE: 6724, "Epson") announced that its Board of Directors, at a meeting held on June 28, 2022, approved amendments to the Corporate Governance Policy, a statement of the basic principles and framework for corporate governance within Epson.

Epson, which established the policy in September 2015, strives to continuously enhance and strengthen corporate governance so as to realize transparent, fair, fast, and decisive decision-making to realize the Management Philosophy, promote sustainable growth, and increase corporate value over the medium and long terms.

A decision was made to partially amend the policy in conjunction with changes to the officer compensation system.
See the amended Corporate Governance Policy at the link below.
corporate.epson/en/sustainability/governance/pdf/epson_governance_policy_e.pdf (PDF,285KB)

To achieve its aim of realizing effective corporate governance that reflects prevailing social imperatives and the operating environment, Epson will review this policy, and amend it as necessary, on an annual basis.

The amendments to the policy are shown below.

(Amendments are underlined)

Before the revision	After the revision
Introduction <Omitted>	Introduction <Unchanged>
Article 1 - Article 24 <Omitted>	Article 1 - Article 24 <Unchanged>
Article 25: Policies and Procedures for Determining Compensation of Officers	Article 25: Policies and Procedures for Determining Compensation of Officers
25.1 The basic policies regarding the officer compensation system are as follows.	25.1 The basic policies regarding the officer compensation system are as follows.
(1) Compensation for Officers who have executive duties	(1) Compensation for Officers who have executive duties
1) Compensation shall provide incentive to improve business performance in order to increase corporate value in both the near and long terms.	1) Compensation shall provide an incentive to improve business performance and shall show a commitment to that in order to sustain growth and increase long-term corporate value.
2) Compensation shall be sufficient to attract qualified persons both from within the Company and from outside.	2) Compensation shall be sufficient to attract and retain qualified persons both from within the Company and from outside.
3) <Omitted>	3) <Unchanged>
	4) Compensation shall show a clear connection between officer compensation and share price and shall strengthen the awareness that their interests are aligned with those of shareholders.
	5) Compensation shall have a built-in mechanism to control misconduct.
	6) The process for determining compensation shall be highly transparent, objective, and fair.
(2) Compensation for Officers who do not have executive duties	(2) Compensation for Officers who do not have executive duties
1) <Omitted>	1) <Unchanged>
2) Compensation shall be sufficient to attract qualified persons both from within the Company and from outside.	2) Compensation shall be sufficient to attract and retain qualified persons both from within the Company and from outside.
25.2 Officer compensation shall consist of the following components: basic compensation, bonuses, and stock compensation.	25.2 Officer compensation shall consist of the following components: base compensation, bonuses, and stock compensation.
(1) Basic compensation	(1) Base compensation
Monetary compensation that is paid monthly in an amount decided by taking into account all factors such as the Officer's position and responsibilities	Monetary compensation that is paid monthly in an amount that is determined in accordance with the individual's position and the size of his or her role and assigned duties
(2) Bonuses	(2) Bonuses
Monetary compensation that is paid once per year in an amount decided in accordance with considerations such as the levels of achievement with respect to annual operating performance targets, etc.	Monetary compensation that is paid once per year in an amount that is determined in accordance with achievement with respect to annual performance indicators and individual objectives
(3) Stock compensation	(3) Stock compensation
Non-monetary compensation system wherein Company shares are delivered using a trust scheme, based on share delivery points awarded in accordance with considerations such as the levels of achievement with respect to the mid-to long-term operating performance targets	Non-monetary compensation wherein the Company's shares are granted once per year in an amount that is determined in accordance with achievement with respect to medium- and long-term performance indicators and sustainability targets
25.3 The basic compensation and bonuses for Officers who have executive duties will reflect the results of performance evaluations based on criteria set according to their respective roles.	<deleted>
25.4 Given their role of fulfilling a general management supervisory function, etc., from a perspective that is independent from executive functions, Officers who do not have executive duties shall not receive performance and share price-linked bonuses and stock compensation.	25.3 Given their role of monitoring management as whole from a position that is independent from the execution of business affairs, Officers who do not have executive duties shall not receive bonuses and stock compensation.
25.5 All forms of compensation - basic compensation, bonuses, and stock compensation - shall be determined by an appropriate body, such as the General Meeting of Shareholders, the Board of Directors, and Audit & Supervisory Committee after a fair, transparent, and rigorous review by the Director Compensation Committee, which is composed of the majority of Outside Directors and which issues an opinion, to ensure transparency and objectivity.	25.4 All forms of compensation - base compensation, bonuses, and stock compensation - shall be determined by the General Meeting of Shareholders, the Board of Directors, and the Audit & Supervisory Committee after a fair, transparent, and rigorous review by the Director Compensation Committee, a majority of whose members are Outside Directors and which reports its opinion, to ensure transparency and objectivity.
Article 26 - Article 31 <Omitted>	Article 26 - Article 31 <Unchanged>
Appendix 1, Appendix 2 <Omitted>	Appendix 1, Appendix 2 <Unchanged>

About Epson
Epson is a global technology leader dedicated to co-creating sustainability and enriching communities by leveraging its efficient, compact, and precision technologies and digital technologies to connect people, things, and information. The company is focused on solving societal issues through innovations in home and office printing, commercial and industrial printing, manufacturing, visual and lifestyle. Epson will become carbon negative and eliminate use of exhaustible underground resources such as oil and metal by 2050.
Led by the Japan-based Seiko Epson Corporation, the worldwide Epson Group generates annual sales of more than JPY 1 trillion.
corporate.epson/en/