Remuneration for Executive Members

Remunerations for Directors

• The compensation of directors engaged in business execution is based on the KDDI Group's business performance for each fiscal year, progress toward the goals of the mid-term management strategy, and a compensation system linked to shareholder value in order to increase the willingness to contribute to the improvement of corporate value over the medium to long term.
• Outside directors who perform management supervising functions without involvement in the execution of businesses receive only fixed amount remuneration that does not vary with the Company's business performance.
• The Company has established the Remuneration Advisory Committee to ensure transparency and objectivity in the process of determining the system and levels of executive remuneration, along with the remuneration amounts based on these.
  This committee has a chair, and vice-chair, and at least half of the committee members are independent outside directors.
• The decision of the amounts of basic remuneration, performance-linked bonus, performance-linked stock compensation, and stock price-linked bonus are not delegated to the representative director, but the amounts are decided by resolution of the Board of Directors based on the advice of this committee.
• KDDI's executive remuneration levels are decided through comparison with sector peer companies, or with other companies of the same scale, in Japan, and take into account factors that include KDDI's management status.
  The appropriateness of the remuneration levels is also validated by the Remuneration Advisory Committee every year, with reference to objective survey data from an external specialized organization.
• For those who have made serious violations of the duties of directors, contrary to the delegation contract between KDDI and the directors, we may suspend the payment of performance-linked remuneration or demand the return of such remuneration.

Policy on the Content of Director Remuneration

(1) Basic remuneration

It's monetary remuneration for which a fixed amount for each position is paid on a monthly basis.

(2) Performance-linked bonus

Calculate the amount of payment for each individual by following formula, and pay money in the first June after the end of each business year.
Performance-linked bonus: Basic amount by position multiplied by the Company's operating performance and KPI achievement rate

(3) Stock price-linked bonus

Calculate the amount of payment for each individual by following formula, and pay money in the first June after the end of each business year.
Stock price-linked bonus: Basic amount by position multiplied by coefficient [1]

• [1]

  Coefficient: (EPS growth rate x 50%) + (stock price fluctuation rate x 50%)
  A) EPS growth rate: EPS at the end of current fiscal year divided by EPS at the end of previous fiscal year
  B) Stock price fluctuation rate (TOPIX growth rate): (KDDI's stock price at the end of current fiscal year / KDDI's stock price at the end of previous fiscal year) divided by (TOPIX at the end of current fiscal year / TOPIX at the end of previous fiscal year)

(4) Performance-linked stock compensation

For performance-linked stock compensation, points for each individual are calculated by following formula. Points will be awarded in the first June after the end of each fiscal year, and when the director retires, KDDI's shares will be delivered according to the cumulative number of points.
Performance-linked stock compensation: Basic points by position multiplied by the Company's operating performance and KPI achievement rate

Reasons for selecting each evaluation metric and results are as follows:

The Company's operating performance

Reasons for selection: A basic numerical value clearly showing a company's business performance.

KPI achievement rate

Reasons for selection: KPI achievement rate is to measure the achievement rate of each business strategy under the mid-term management strategy, and therefore linked to the business growth and performance improvement.

Result: ESG-related items are also set as indicators along with indicators in each business strategy. In consideration of the importance of ESG, in FY23.3, one of the calculation criteria for (2) performance-linked bonus and (4) performance-linked stock remuneration in variable remuneration has been increased to approximately 30% of the total KPI. [2]

• [2]

  ESG KPIs include indicators for achieving carbon neutrality in data centers and seeking to reduce CO2 emissions.

EPS growth rate

Reasons for selection: To provide a strong incentive to achieve the target of the midterm management strategy by using an indicator set as a target under the plan.

Result: 1.06

Stock price fluctuation rate

Reasons for selection: To enhance a correlation between remunerations for directors and the shareholders value by using an indicator that is directly linked with an increase/decrease in shareholders value.

Result: 1.18

Remuneration for Audit & Supervisory Board Members

Remuneration for Audit & Supervisory Board members is decided by the consensus of the members of Audit & Supervisory Board.
These members receive flat-rate remuneration that is not affected by fluctuations in the company's operating performance.

Remuneration for Directors and Audit & Supervisory Board Members (FY22.3)

Unit: million yen

Executive classification	Total remuneration	Total remuneration by type			Number of eligible members
		Basic remuneration	Bonus	Stock compensation
Directors (excluding outside directors)	939	378	375	186	9
Outside directors	84	84	-	-	5
Audit & Supervisory Board members (excluding outside members)	63	63	-	-	2
Outside Audit & Supervisory Board members	53	53	-	-	4

• The number and amount of auditors paid above include 1 outside Audit & Supervisory Board member who passed away on April 28, 2021.
• In addition to the above, adjustment payments to directors in lieu of retirement allowance were resolved at the 20th Annual Shareholders Meeting held on June 24, 2004 in connection with the cancellation of the executive retirement bonus system.