Rakuten, Inc. (hereinafter the “Company”) announces that the Board of Directors today resolved to propose that at the 22nd Annual General Shareholders’ Meeting to be held on March 28, 2019, the Company will be authorized to issue the following Share Options as stock options to Directors of the Company who serve concurrently as Executive Officers of the Company and Executive Officers of the Company (hereinafter referred to as the “Officers of the Company”) , pursuant to Articles 236, 238 and 239 of the Companies Act.
Issuance of Share Options as Stock Options to Directors of the Company who serve concurrently as Executive Officers of the Company and Executive Officers of the Company
１．The reason for issuing the Share Options on especially favorable conditions
Since the value of the Share Options is linked with the Company’s stock price, delivering the Share Options as part of a performance-linked compensation package to the Officers of the Company will allow the Officers of the Company to share the gains of shareholders when stock prices rise and feel shareholders’ losses when stock prices fall, thus enhancing their motivation to achieve higher performance and higher stock prices.
The Share Options may only be exercised by the Officers of the Company within ten days from the date following the date on which they retire from the Company, and its subsidiaries and affiliates. As a result of these Share Options, it will be possible to further raise the incentive of the Group towards higher performance and higher stock prices in the long-term, and retain existing talented staff.
The Company intends to implement retirement compensation stock option plans for the Officers of the Company in order to continuously enhance the Group’s corporate and shareholder value by recruiting and retaining talented staff and by raising the motivation of the Officers of the Company towards higher performance.
[Determination Methods and Main Features of the Group’s Compensation System]
In determination of the total amount of compensation, including the granting of Share Options, several factors are taken into account, such as the degree to which the Group’s operating profit targets were achieved; the business performance of each Group company, business segment or division; and the personnel evaluation of each individual.
As a general rule, the Group has designed its compensation system so that as an individual’s rank and responsibility increases, the portion of their total compensation comprised of performance-based bonuses (based on individual, Group Company, business unit or department performance) and Stock Options (that are linked to stock prices) also increases. Nevertheless, it is the Group’s belief that the Officers of the Company, in particular, compared to the other executives and employees of the Company, its subsidiaries or affiliates, are responsible for and should contribute to the further enhancement of performance and share holder value of the entire Group in the long-term. Accordingly, in order to raise the motivation of the Officers of Company to contribute to the enhancement of performance and stock prices in the long-term more than ever, the Company shall issue Share Options that may be exercised within ten days from the date following the date on which they retire from the Company, and its subsidiaries and affiliates, unlike those that were previously granted.