SIGNATURE
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
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SONY
GROUP CORPORATION
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(Registrant)
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By: /s/ Hiroki
Totoki
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(Signature)
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Hiroki Totoki
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Executive Deputy President
and
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Chief Financial Officer
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Date:
May 19, 2021
List
of materials
Documents
attached hereto:
i)
Notice of the Ordinary General Meeting of Shareholders to be held on June 22, 2021
SONY
GROUP CORPORATION
Notice
of the Ordinary General Meeting of
Shareholders
to be held on June 22, 2021
To
the Registered Holders of American Depositary Receipts representing shares of Common Stock of Sony Group Corporation (the “Corporation”):
The
undersigned Depositary has received a notice that the Corporation has called an ordinary general meeting of shareholders to be
held in Tokyo, Japan on June 22, 2021 (the “Meeting”) for the following purposes:
MATTERS
TO BE REPORTED:
To
receive reports on the business report, non-consolidated financial statements, consolidated financial statements, as well as audit
reports on the consolidated financial statements by the Independent Auditors (certified public accountants) and the Audit Committee
for the fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021) pursuant to the Companies Act of Japan.
PROPOSALS
TO BE ACTED UPON:
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1.
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To
elect 11 Directors.
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2.
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To
issue Stock Acquisition Rights for the purpose of granting stock options.
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EXPLANATION
REGARDING THE SUBJECT MATTER OF THE MEETING
MATTERS
TO BE REPORTED:
To
receive reports on the business report, non-consolidated financial statements, consolidated financial statements, as well as audit
reports on the consolidated financial statements by the Independent Auditors (certified public accountants) and the Audit Committee
for the fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021).
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Note:
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The
Consolidated Financial Statements pursuant to the Companies Act of Japan (Translation) are available on the Sony Investor Relations
website.
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This
document can be accessed at
https://www.sony.com/en/SonyInfo/IR/stock/shareholders_meeting/Meeting104/
PROPOSALS
TO BE ACTED UPON:
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1.
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To
elect 11 Directors.
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The
term of office of all 12 Directors currently in office will expire at the conclusion of the Meeting. In accordance with the decision
of the Nominating Committee, the election of the following 11 Directors is proposed.
Policy
and procedures for the selection of director candidates
With
a view toward securing effective input and oversight by the Board of Directors of the Corporation (the “Board”), the
Nominating Committee reviews and selects candidates for the Board with the aim of assuring that a substantial part of the Board
is comprised of qualified outside Directors that satisfy the independence requirements established by Sony and by law.
The
Nominating Committee selects candidates that it views as well-suited to be Directors in light of the Board’s purpose of
enhancing the corporate value of the Corporation and its consolidated subsidiaries (the “Sony Group”). The Nominating
Committee broadly considers various relevant factors, including a candidate’s capabilities (such as the candidate’s
experience, achievements, expertise and internationality), availability, and independence, as well as diversity in the boardroom,
the appropriate size of the Board, and the knowledge, experiences and talent needed for the role.
Under
the Charter of the Board of Directors (the “Board Charter”), the Corporation also requires that the Board consist
of not fewer than eight (8) Directors and not more than fourteen (14) Directors. In addition, since 2005, the majority of the
members of the Board have been outside Directors.
Director
qualifications
The
qualifications for Directors of the Corporation under the Board Charter are generally as summarized below. All Director candidates
satisfy the qualifications for Directors as set forth below.
Of
the 11 Director candidates, 8 are candidates for outside Director. As of the date of this proposal, each of the 8 candidates for
outside Director satisfies the additional qualifications for outside Directors, and the Corporation has made a filing with the
Tokyo Stock Exchange, where the shares of the Corporation are listed, indicating that each of them will be an independent Director
under the Securities Listing Regulations of the Tokyo Stock Exchange.
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All
Directors Qualifications:
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(1)
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Shall
not be a director, a statutory auditor, a corporate executive officer, a general manager or other employee of any company in competition
with the Sony Group in any of the Sony Group’s principal businesses (hereinafter referred to as “Competing Company”)
or own three percent (3%) or more of the shares of any Competing Company.
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(2)
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Shall
not be or have been a representative partner or partner of any independent auditor of the Sony Group during the three (3)
years before being nominated as a Director.
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(3)
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Shall
not have any connection with any matter that may cause a material conflict of interest in performing the duties of a Director.
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Outside
Directors Qualifications:
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(1)
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Shall
not have received directly from the Sony Group, during any consecutive twelve-month (12 month) period within the last three (3)
years, more than an amount equivalent to one hundred twenty thousand United States dollars (US$120,000), other than Director and
committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent
in any way on continued service).
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(2)
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Shall
not be an executive director, a corporate executive officer, a general manager or other employee of any company whose aggregate
amount of transactions with the Sony Group, in any of the last three (3) fiscal years, exceeds the greater of an amount equivalent
to one million United States dollars (US$1,000,000), or two percent (2%) of the annual consolidated sales of such company.
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Also,
each outside Director may, by resolution of the Nominating Committee, be nominated as a Director candidate for re-election up
to five (5) times, and thereafter by resolution of the Nominating Committee and by consent of all of the Directors. Even with
the consent of all of the Directors, in no event may any outside Director be re-elected more than eight (8) times.
(For
Reference) The candidates for Director are as follows:
Notes:
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1.
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The
expected appointment of each candidate for Director will be determined at the meeting
of the Board to be held after this Meeting.
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2.
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Since
Mr. Adam Crozier, Ms. Keiko Kishigami and Mr. Joseph A. Kraft Jr. were newly elected
at the Ordinary General Meeting of Shareholders held on June 26, 2020, the number of
Board meetings they were eligible to attend is different from other directors.
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3.
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The
Corporation has concluded agreements limiting the liability for 9 of the Director candidates,
each of whom is currently an outside Director or other non-executive Director. For a
summary of the limited liability agreements, please refer to page 18.
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4.
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The
Corporation has a directors and officers liability insurance policy covering all Directors
and officers as insured parties. Candidates and newly appointed Directors and officers
during the policy period are also included as insured parties. The policy provides coverage
for damages that may occur when any insured party is responsible for the execution of
his/her duties or receives a claim for damages related to the pursuit of such liability.
However, there are exclusions, such as in the case of an act that is committed with the
knowledge that it is in violation of laws or regulations. The Corporation also plans
to renew this insurance policy with the same conditions at the time of the next renewal.
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5.
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As
of the date of this proposal, each of the 8 candidates for outside Director satisfies
the additional qualifications for outside Directors, and the Corporation has made a filing
with the Tokyo Stock Exchange, where the shares of the Corporation are listed, indicating
that each of them will be an independent Director under the Securities Listing Regulations
of the Tokyo Stock Exchange.
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1.
Kenichiro Yoshida
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Reappointment
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Current
Responsibility as a Director
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Member
of the Nominating Committee
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Date
of Birth
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October
20, 1959
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Number
of Years Served as a Director
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7
years
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Record
of attendance at the Board of Directors Meetings
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100%
(8/8)
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Number
of the Corporation’s Shares Held
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189,900
shares
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Brief
Personal History and Principal Business Activities Outside the Corporation
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April
1983
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Joined
the Corporation
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July
2000
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Joined
Sony Communication Network Corporation (currently Sony Network Communications Inc.)
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September
2000
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Outside
Director, So-net M3, Inc. (currently M3, Inc.) (present)
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May
2001
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Senior
Vice President, Sony Communication Network Corporation
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April
2005
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President
and Representative Director, Sony Communication Network Corporation
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December
2013
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Executive
Vice President, Chief Strategy Officer and Deputy Chief Financial Officer, Corporate Executive Officer, the Corporation
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April
2014
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Executive
Vice President and Chief Financial Officer, Representative Corporate Executive Officer, the Corporation
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June
2014
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Director,
the Corporation (present)
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April
2015
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Executive
Deputy President and Chief Financial Officer, Representative Corporate Executive Officer, the Corporation
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April
2018
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President
and Chief Executive Officer, Representative Corporate Executive Officer, the Corporation
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June
2020
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Chairman,
President and Chief Executive Officer, Representative Corporate Executive Officer, the Corporation (present)
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Reasons
for the Nomination
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As
the Chief Executive Officer of the Sony Group, this candidate is responsible for the overall management of the entire Group,
and he is nominated to be a candidate for Director by resolution of the Nominating Committee.
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2.
Hiroki Totoki
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Reappointment
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Current
Responsibility as a Director
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–
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Date
of Birth
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July
17, 1964
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Number
of Years Served as a Director
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2
years
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Record
of attendance at the Board of Directors Meetings
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100%
(8/8)
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Number
of the Corporation’s Shares Held
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44,600
shares
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Brief
Personal History and Principal Business Activities Outside the Corporation
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April
1987
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Joined
the Corporation
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February
2002
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Representative
Director, Sony Bank Incorporated
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June
2005
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Director,
Corporate Executive Officer and Senior Managing Director, Sony Communication Network Corporation (currently Sony Network Communications
Inc.)
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April
2012
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Representative
Director, Corporate Executive Officer and Senior Managing Director, So-net Entertainment Corporation (currently Sony Network
Communications Inc.)
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April
2013
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Representative
Director, Corporate Executive Officer, Deputy President and Chief Financial Officer, So-net Entertainment Corporation
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December
2013
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Senior
Vice President, Corporate Executive, the Corporation
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November
2014
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President
and Chief Executive Officer, Sony Mobile Communications Inc.
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June
2015
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Director,
Chairman, So-net Corporation (currently Sony Network Communications Inc.)
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April
2016
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Executive
Vice President, Corporate Executive Officer, the Corporation
In
charge of New Business Platform (Strategy)
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President
and Representative Director, So-net Corporation
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June
2017
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Executive
Vice President, Chief Strategy Officer, Corporate Executive Officer, the Corporation
In
charge of Mid-to-Long Term Business Strategy, New Business
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April
2018
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Executive
Vice President, Chief Financial Officer, Representative Corporate Executive Officer, the Corporation
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June
2018
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Senior
Executive Vice President, Chief Financial Officer, Representative Corporate Executive Officer, the Corporation
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June
2019
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Director,
the Corporation (present)
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June
2020
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Executive
Deputy President, Chief Financial Officer, Representative Corporate Executive Officer, the Corporation (present)
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Reasons
for the Nomination
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As
the Chief Financial Officer, he is responsible for the headquarters functions of Corporate Planning and Control, Corporate
Strategy, Accounting, Tax, Finance, Investor Relations, Disclosure Controls, Digital Transformation Strategy, Information
Systems, Information Security, Risk Management, Internal Audit and SOX 404 management, and he is nominated to be a candidate
for Director by resolution of the Nominating Committee.
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3.
Shuzo Sumi
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Reappointment
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Candidate
for outside Director
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Non-executive
Director
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Current
Responsibility as a Director
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Chairman
of the Board
Chair
of the Nominating Committee
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Date
of Birth
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July
11, 1947
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Number
of Years Served as a Director
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4
years
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Record
of attendance at the Board of Directors Meetings
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100%
(8/8)
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Number
of the Corporation’s Shares Held
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4,700
shares
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Brief
Personal History and Principal Business Activities Outside the Corporation
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April
1970
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Joined
Tokio Marine & Fire Insurance Co., Ltd.
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June
2000
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Director
and Chief Representative in London, Overseas Division, Tokio Marine & Fire Insurance Co., Ltd.
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June
2002
|
Managing
Director, Tokio Marine & Fire Insurance Co., Ltd.
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October
2004
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Managing
Director, Tokio Marine & Nichido Fire Insurance Co., Ltd.
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June
2005
|
Senior
Managing Director, Tokio Marine & Nichido Fire Insurance Co., Ltd.
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June
2007
|
President
& Chief Executive Officer, Tokio Marine & Nichido Fire Insurance Co., Ltd.
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President
& Chief Executive Officer, Tokio Marine Holdings, Inc.
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June
2013
|
Chairman
of the Board, Tokio Marine & Nichido Fire Insurance Co., Ltd.
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Chairman
of the Board, Tokio Marine Holdings, Inc.
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June
2014
|
Outside
Director, Toyota Industries Corporation (present)
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April
2016
|
Senior
Executive Advisor, Tokio Marine & Nichido Fire Insurance Co., Ltd. (present)
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June
2017
|
Director,
the Corporation (present)
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Reasons
for the Nomination as Outside Director and Outline of Expected Roles
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|
This
candidate advises the Corporation’s management based on his knowledge, experience, and insight from managing a global
company and from various activities in the industrial community. He leads the Board of Directors as the Chairman and has demonstrated
supervising and monitoring capabilities. In addition, he leads the Nominating Committee as its Chair. Accordingly, the Nominating
Committee has nominated him as a candidate for Outside Director as he is expected to contribute to the Board of Directors’
decision-making function and oversight function.
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4.
Tim Schaaff
|
Reappointment
|
|
Non-executive
Director
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Current
Responsibility as a Director
|
Director
in charge of Information Security
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|
|
Date
of Birth
|
December
5, 1959
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|
Number
of Years Served as a Director
|
8
years
|
|
|
Record
of attendance at the Board of Directors Meetings
|
100%
(8/8)
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|
|
Number
of the Corporation’s Shares Held
|
8,800
shares
|
|
|
|
|
|
Brief
Personal History and Principal Business Activities Outside the Corporation
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|
|
December
1982
|
Joined
New England Digital Corporation
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|
July
1991
|
Joined
Apple Computer, Inc.
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|
|
1998
|
Vice
President, Apple Computer, Inc.
|
|
|
December
2005
|
Senior
Vice President, Sony Corporation of America
|
|
|
November
2006
|
Deputy
President, Technology Development Group, the Corporation
|
|
|
June
2008
|
President,
Sony Media Software and Services Inc.
|
|
|
December
2009
|
President,
Sony Network Entertainment International LLC
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|
|
June
2013
|
Director,
the Corporation (present)
|
|
|
July
2015
|
Chief
Product Officer, Intertrust Technologies Corporation (present)
|
|
|
|
|
|
|
|
|
|
|
|
|
Reasons
for the Nomination
|
|
In
addition to expertise in software technology and network services, this candidate has experience leading Sony’s network
services business, and he is nominated to be a candidate for Director by resolution of the Nominating Committee. This candidate
does not satisfy the qualification for outside Director since he worked in the Sony Group in the past.
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|
5.
Toshiko Oka
|
Reappointment
|
|
Candidate
for outside Director
|
|
Non-executive
Director
|
|
|
|
|
|
|
|
|
|
Current
Responsibility as a Director
|
Member
of the Audit Committee
|
|
|
Date
of Birth
|
March
7, 1964
|
|
|
Number
of Years Served as a Director
|
3
years
|
|
|
Record
of attendance at the Board of Directors Meetings
|
100%
(8/8)
|
|
|
Number
of the Corporation’s Shares Held
|
3,000
shares
|
|
|
|
|
|
Brief
Personal History and Principal Business Activities Outside the Corporation
|
|
|
April
1986
|
Joined
Tohmatsu Touche Ross Consulting Limited
|
|
|
July
2000
|
Joined
Asahi Arthur Anderson Limited
|
|
|
September
2002
|
Principal,
Deloitte Tohmatsu Consulting Co., Ltd. (currently ABeam Consulting Ltd.)
|
|
|
April
2005
|
President
and Representative Director, ABeam M&A Consulting Ltd. (currently PwC Advisory LLC)
|
|
|
April
2016
|
Partner,
PwC Advisory LLC
|
|
|
June
2016
|
CEO,
Oka & Company Ltd. (present)
|
|
|
|
Outside
Director, Hitachi Metals, Ltd. (present) (She will resign as Outside Director, Hitachi Metals, Ltd. on June 18, 2021.)
|
|
|
June
2018
|
Director,
the Corporation (present)
|
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|
June
2019
|
Outside
Director, Happinet Corporation (present)
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|
June
2020
|
Outside
Director, ENEOS Holdings, Inc. (present)
|
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|
April
2021
|
Professor,
Meiji Business School, Graduate School of Global Business (present)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reasons
for the Nomination as Outside Director and Outline of Expected Roles
|
|
This
candidate advises the Corporation’s management based on her experience in developing management strategies as an M&A
consultant, and insight into corporate management and accounting through her experience at an accounting firm and as an outside
director/statutory auditor. In addition, on the Audit Committee, she provides advice and suggestions based on her expertise
and experience as a financial expert. Accordingly, the Nominating Committee has nominated her as a candidate for Outside Director
as she is expected to contribute to the Board of Directors’ decision-making function and oversight function.
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*
|
In
April 2020, Hitachi Metals, Ltd. (“Hitachi Metals”), where Ms. Toshiko Oka is an outside director, announced that
Hitachi Metals had discovered misconduct including misrepresentation of test results in the inspection reports submitted to customers
of Hitachi Metals and its subsidiaries. Although she was not aware of the conduct until it was discovered, she had previously
made a statement regarding compliance to the Hitachi Metals’ board of directors and the audit committee. After the conduct
was discovered, she has received reports regarding the investigation and progress of customer care etc. and has been recommending
various measures regarding quality compliance to prevent the recurrence of similar matters and monitoring the status of such measures.
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|
6.
Sakie Akiyama
|
Reappointment
|
|
Candidate
for outside Director
|
|
Non-executive
Director
|
|
|
|
|
|
|
|
|
|
Current
Responsibility as a Director
|
Member
of the Compensation Committee
|
|
|
Date
of Birth
|
December
1, 1962
|
|
|
Number
of Years Served as a Director
|
2
years
|
|
|
Record
of attendance at the Board of Directors Meetings
|
100%
(8/8)
|
|
|
Number
of the Corporation’s Shares Held
|
1,900
shares
|
|
|
|
|
|
Brief
Personal History and Principal Business Activities Outside the Corporation
|
|
|
April
1987
|
Joined
Arthur Andersen & Co.
|
|
|
April
1994
|
Founder
and CEO, Saki Corporation
|
|
|
October
2018
|
Founder,
Saki Corporation (present)
|
|
|
June
2019
|
Director,
the Corporation (present)
Outside
Director, Japan Post Holdings Co., Ltd. (present)
Outside
Director, Orix Corporation (present)
|
|
|
June
2020
|
Outside
Director, Mitsubishi Corporation (present)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reasons
for the Nomination as Outside Director and Outline of Expected Roles
|
|
This
candidate advises the Corporation’s management based on her launch and development of an industrial robotic inspection
company after working as an international business consultant, as well as her experience serving as a member of government
committees/working groups. In addition, as a member of the Compensation Committee, she provides advice and suggestions based
on her professional perspective. Accordingly, the Nominating Committee has nominated her as a candidate for Outside Director
as she is expected to contribute to the Board of Directors’ decision-making function and oversight function.
|
|
7.
Wendy Becker
|
Reappointment
|
|
Candidate
for outside Director
|
|
Non-executive
Director
|
|
|
|
|
|
|
|
|
|
Current
Responsibility as a Director
|
Chair
of the Compensation Committee
|
|
|
Date
of Birth
|
November
2, 1965
|
|
|
Number
of Years Served as a Director
|
2
years
|
|
|
Record
of attendance at the Board of Directors Meetings
|
100%
(8/8)
|
|
|
Number
of the Corporation’s Shares Held
|
1,900
shares
|
|
|
|
|
|
Brief
Personal History and Principal Business Activities Outside the Corporation
|
|
|
September
1987
|
Brand
Manager, Procter & Gamble Company
|
|
|
September
1993
|
Consultant,
McKinsey & Company, Inc.
|
|
|
December
1998
|
Partner,
McKinsey & Company, Inc.
|
|
|
February
2008
|
Managing
Director, Residential, TalkTalk, The Carphone Warehouse Ltd.
|
|
|
|
Board
member, Member of Remuneration Committee, Whitbread plc
|
|
|
September
2009
|
Chief
Marketing Officer, Vodafone Group plc
|
|
|
September
2012
|
Chief
Operating Officer, Jack Wills Ltd.
|
|
|
October
2013
|
CEO,
Jack Wills Ltd.
|
|
|
February
2017
|
Board
member, Chair of Remuneration Committee, Great Portland Estates plc (present)
|
|
|
September
2017
|
Board
member, Logitech International S.A. (present)
|
|
|
June
2019
|
Director,
the Corporation (present)
|
|
|
September
2019
|
Chairperson
of the Board, Chair of Nominating Committee, Logitech International S.A. (present)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reasons
for the Nomination as Outside Director and Outline of Expected Roles
|
|
This
candidate advises the Corporation’s management based on her capabilities in global corporate management, which she has
developed through her broad career in the consulting industry in North America and Europe, and experience as an executive
of various companies, including telecommunications and technology companies. In addition, she draws on her professional perspective
to lead the Compensation Committee as its Chair. Accordingly, the Nominating Committee has nominated her as a candidate for
Outside Director as she is expected to contribute to the Board of Directors’ decision-making function and oversight
function.
|
|
8.
Yoshihiko Hatanaka
|
Reappointment
|
|
Candidate
for outside Director
|
|
Non-executive
Director
|
|
|
|
|
|
|
|
|
|
Current
Responsibility as a Director
|
Member
of the Nominating Committee
|
|
|
Date
of Birth
|
April
20, 1957
|
|
|
Number
of Years Served as a Director
|
2
years
|
|
|
Record
of attendance at the Board of Directors Meetings
|
100%
(8/8)
|
|
|
Number
of the Corporation’s Shares Held
|
1,900
shares
|
|
|
|
|
|
Brief
Personal History and Principal Business Activities Outside the Corporation
|
|
|
April
1980
|
Joined
Fujisawa Pharmaceutical Co., Ltd. (currently Astellas Pharma Inc.)
|
|
|
June
2005
|
Corporate
Executive, Vice President, Corporate Planning, Corporate Strategy, Astellas Pharma Inc.
|
|
|
April
2006
|
Corporate
Executive of Astellas Pharma Inc. and President & CEO, Astellas US LLC and President & CEO, Astellas Pharma US, Inc.
|
|
|
June
2008
|
Senior
Corporate Executive of Astellas Pharma Inc. and President & CEO, Astellas US LLC and President & CEO, Astellas Pharma
US, Inc.
|
|
|
April
2009
|
Senior
Corporate Executive, Chief Strategy Officer and Chief Financial Officer, Astellas Pharma Inc.
|
|
|
June
2011
|
Representative
Director, President & CEO, Astellas Pharma Inc.
|
|
|
April
2018
|
Representative
Director, Chairman of the Board, Astellas Pharma Inc. (present)
|
|
|
June
2019
|
Director,
the Corporation (present)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reasons
for the Nomination as Outside Director and Outline of Expected Roles
|
|
This
candidate advises the Corporation’s management based on his experience in, and insight into, global corporate management
from his career in the United States and Europe, and in leading company integration as a corporate planning officer. In addition,
as a member of the Nominating Committee, he provides advice and suggestions based on his professional perspective. Accordingly,
the Nominating Committee has nominated him as a candidate for Outside Director as he is expected to contribute to the Board
of Directors’ decision-making function and oversight function.
|
|
9.
Adam Crozier
|
Reappointment
|
|
Candidate
for outside Director
|
|
Non-executive
Director
|
|
|
|
|
|
|
|
|
|
Current
Responsibility as a Director
|
Member
of the Nominating Committee
|
|
|
Date
of Birth
|
January
26, 1964
|
|
|
Number
of Years Served as a Director
|
1
year
|
|
|
Record
of attendance at the Board of Directors Meetings
|
100%
(6/6)
|
|
|
Number
of the Corporation’s Shares Held
|
1,000
shares
|
|
|
|
|
|
Brief
Personal History and Principal Business Activities Outside the Corporation
|
|
|
January
1995
|
Joint
CEO, Saatchi & Saatchi Group Ltd.
|
|
|
January
2000
|
CEO,
The Football Association
|
|
|
February
2003
|
CEO,
Royal Mail Group Ltd.
|
|
|
April
2010
|
CEO,
ITV plc
|
|
|
April
2017
|
Non-Executive
Chairman, Whitbread plc (present)
|
|
|
December
2018
|
Non-Executive
Chairman, ASOS plc (present)
|
|
|
February
2020
|
Non-Executive
Chairman, Kantar Group Ltd. (present)
|
|
|
June
2020
|
Director,
the Corporation (present)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reasons
for the Nomination as Outside Director and Outline of Expected Roles
|
|
This
candidate advises the Corporation’s management based on his capabilities in global corporate management, as well as
his experience across companies including the media and entertainment industries. In addition, as a member of the Nominating
Committee, he provides advice and suggestions based on his experience. Accordingly, the Nominating Committee has nominated
him as a candidate for Outside Director as he is expected to contribute to the Board of Directors’ decision-making function
and oversight function.
|
|
10.
Keiko Kishigami
|
Reappointment
|
|
Candidate
for outside Director
|
|
Non-executive
Director
|
|
|
|
|
|
|
|
|
|
Current
Responsibility as a Director
|
Member
of the Audit Committee
|
|
|
Date
of Birth
|
January
28, 1957
|
|
|
Number
of Years Served as a Director
|
1
year
|
|
|
Record
of attendance at the Board of Directors Meetings
|
100%
(6/6)
|
|
|
Number
of the Corporation’s Shares Held
|
1,000
shares
|
|
|
|
|
|
Brief
Personal History and Principal Business Activities Outside the Corporation
|
|
|
|
|
|
|
October
1985
|
Joined
Peat Marwick Minato (currently Ernst & Young ShinNihon LLC)
|
|
|
August
1989
|
Registered
as Certified Public Accountant (present)
|
|
|
December
1997
|
Partner,
Century Audit Corporation (currently Ernst & Young ShinNihon LLC)
|
|
|
May
2004
|
Representative
Partner (currently Senior Partner), Ernst & Young ShinNihon (currently Ernst & Young ShinNihon LLC)
|
|
|
September
2018
|
Board
Member, WWF Japan (present)
|
|
|
June
2019
|
Outside
Auditor, Okamura Corporation (present)
|
|
|
June
2020
|
Director,
the Corporation (present)
Outside
Auditor, Sumitomo Seika Chemicals Company, Limited. (present)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reasons
for the Nomination as Outside Director and Outline of Expected Roles
|
|
This
candidate advises the Corporation’s management based on her auditing experience
across various companies in Japan and overseas as a certified public accountant and expertise on internal controls,
as well as her knowledge regarding ESG. In addition, on the Audit Committee, she provides advice and suggestions based on
her expertise and experience as a financial expert. Accordingly, the Nominating Committee has nominated her as a candidate
for Outside Director as she is expected to contribute to the Board of Directors’ decision-making function and oversight
function.
|
|
11.
Joseph A. Kraft Jr.
|
Reappointment
|
|
Candidate
for outside Director
|
|
Non-executive
Director
|
|
|
|
|
|
|
|
|
|
Current
Responsibility as a Director
|
Member
of the Compensation Committee
Director
in charge of Information Security
|
|
|
Date
of Birth
|
May
12, 1964
|
|
|
Number
of Years Served as a Director
|
1
year
|
|
|
Record
of attendance at the Board of Directors Meetings
|
100%
(6/6)
|
|
|
Number
of the Corporation’s Shares Held
|
1,000
shares
|
|
|
|
|
|
Brief
Personal History and Principal Business Activities Outside the Corporation
|
|
|
July
1986
|
Joined
Morgan Stanley Inc.
|
|
|
January
2000
|
Managing
Director, Morgan Stanley Inc.
|
|
|
April
2007
|
Managing
Director, Head of Capital Markets Division, Dresdner Kleinwort Japan
|
|
|
March
2010
|
Deputy
Branch Manager & Managing Director, Bank of America Merrill Lynch Japan
|
|
|
July
2015
|
CEO,
Rorschach Advisory Inc. (present)
|
|
|
June
2020
|
Director,
the Corporation (present)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reasons
for the Nomination as Outside Director and Outline of Expected Roles
|
|
This
candidate advises the Corporation’s management based on his insight into, and
knowledge of, the global financial industry and capital markets based on his many years of experience and broad network spanning
diverse industries. In addition, as a member of the Compensation Committee, he provides advice and suggestions based
on his professional perspective. Accordingly, the Nominating Committee has nominated him as a candidate for Outside Director
as he is expected to contribute to the Board of Directors’ decision-making function and oversight function.
|
2. To
issue Stock Acquisition Rights for the purpose of granting stock options.
It
is proposed that the Corporation will issue stock acquisition rights (“Stock Acquisition Rights”) to corporate executive
officers and employees of the Corporation, and directors, officers and employees of subsidiaries of the Corporation, for the purpose
of granting stock options, pursuant to the provisions of Articles 236, 238 and 239 of the Companies Act of Japan, and that the
Corporation will delegate the determination of the terms of such Stock Acquisition Rights to the Board.
In
connection with this agenda, no such Stock Acquisition Rights will be issued to Non-executive Directors, including outside Directors
of the Corporation.
For
a summary of the stock acquisition rights issued by the Corporation in the past, please refer to pages 18 to 20. In light of the
purpose for granting the stock acquisition rights (contributing to the improvement of the mid- and long-term business performance
of the Sony Group and thereby improving such business performance of the Sony Group), the exercise of stock acquisition rights
is restricted for a one-year period from the allotment date of the stock acquisition rights (the exercise of Tax-qualified Stock
Acquisition Rights with Exercise Price Denominated in Yen is restricted for a two-year period from the date of a resolution of
the Board for issuance), and the Allocation Agreement provides restrictions on the exercise of stock acquisition rights such as
a limitation on the number of exercisable stock acquisition rights (in general, one-third of the total number of the allocated
stock acquisition rights will vest and be exercisable each year after the restricted period, and all of the allocated stock acquisition
rights will be exercisable on and after the date on which three (3) years have passed from the allotment date of the stock acquisition
rights), eligibility rules and others. The Corporation intends that stock acquisition rights issued by the Corporation in the
future will be under the same restrictions as the stock acquisition rights issued in the past.
|
|
I.
|
The
reason the Corporation needs to issue Stock Acquisition Rights on favorable terms.
|
The
Corporation will issue Stock Acquisition Rights to corporate executive officers and employees of the Corporation, and directors,
officers and employees of subsidiaries of the Corporation, for the purpose of giving them an incentive to contribute towards the
improvement of the business performance of the Sony Group and thereby improving the business performance of the Sony Group by
making the economic interest which such directors, officers, or employees will receive correspond to the business performance
of the Sony Group.
|
|
II.
|
Terms
and conditions of the Stock Acquisition Rights, the concrete terms of which the Board may determine pursuant to the delegation
of such determination upon approval at the Meeting.
|
1.
Maximum Limit of Aggregate Numbers of Stock Acquisition Rights
Not
exceeding 50,000
2.
Payment in exchange for Stock Acquisition Rights
Stock
Acquisition Rights are issued without payment of any consideration to the Corporation.
3.
Matters regarding Stock Acquisition Rights
|
|
(1)
|
Class
and Number of Shares to be Issued or Transferred upon Exercise of Stock Acquisition Rights
|
The
class of shares to be issued or transferred upon exercise of Stock Acquisition Rights shall be shares of common stock, and the
number of shares to be issued or transferred upon exercise of each Stock Acquisition Right (the “Number of Granted Shares”)
shall be 100 shares.
The
aggregate number of shares to be issued or transferred upon exercise of Stock Acquisition Rights shall not exceed 5,000,000 shares
of common stock of the Corporation (the “Common Stock”). However, in the event that the Number of Granted Shares is
adjusted pursuant to (2) below, the aggregate number of shares to be issued or transferred upon exercise of Stock Acquisition
Rights shall not exceed the number obtained by multiplying the Number of Granted Shares after adjustment by the maximum limit
of the aggregate number of Stock Acquisition Rights as prescribed in 1. above.
|
|
(2)
|
Adjustment
of Number of Granted Shares
|
In
the event that the Corporation conducts a stock split (including free distribution of shares (musho-wariate)) or a consolidation
of the Common Stock after the date of a resolution of the Meeting, the Number of Granted Shares shall be adjusted in accordance
with the following formula:
|
Number
of
Granted
Shares
after
adjustment
|
=
|
Number
of
Granted
Shares
before
adjustment
|
x
|
Ratio
of split
or
consolidation
|
Any
fraction less than one (1) share resulting from the adjustment shall be disregarded.
|
|
(3)
|
Amount
of Assets to be Contributed upon Exercise of Stock Acquisition Rights
|
The
amount of assets to be contributed upon exercise of each Stock Acquisition Right shall be the amount obtained by multiplying the
amount to be paid per share to be issued or transferred upon exercise of Stock Acquisition Rights (the “Exercise Price”),
which is provided below, by the Number of Granted Shares.
(i)
Initial Exercise Price
The
Exercise Price shall initially be as follows:
|
|
(A)
|
Stock
Acquisition Rights with Exercise Price Denominated in Yen
|
The
Exercise Price shall initially be the average of the closing prices of the Common Stock in the regular trading thereof on the
Tokyo Stock Exchange (each the “Closing Price”) for the ten (10) consecutive trading days (excluding days on which
there is no Closing Price) immediately prior to the allotment date of such Stock Acquisition Rights (any fraction less than one
(1) yen arising as a result of such calculation shall be rounded up to the nearest one (1) yen); provided, however, that if such
calculated price is lower than either (a) the average of the Closing Prices for the thirty (30) consecutive trading days (excluding
days on which there is no Closing Price) commencing forty-five (45) trading days immediately before the day immediately after
the allotment date of Stock Acquisition Rights (any fraction less than one (1) yen arising as a result of such calculation shall
be rounded up to the nearest one (1) yen), or (b) the Closing Price on the allotment date of Stock Acquisition Rights (if there
is no Closing Price on such date, the Closing Price on the immediately preceding trading day), the Exercise Price shall be the
higher price of (a) or (b) above.
|
|
(B)
|
Stock
Acquisition Rights with Exercise Price Denominated in U.S. Dollars
|
The
Exercise Price shall initially be the U.S. dollar amount obtained by dividing the average of the Closing Prices for the ten (10)
consecutive trading days (excluding days on which there is no Closing Price) immediately prior to the allotment date of such Stock
Acquisition Rights (the “Reference Yen Price”) by the average of the exchange rate quotations by a leading commercial
bank in Tokyo for selling spot U.S. dollars by telegraphic transfer against yen for such ten (10) consecutive trading days (the
“Reference Exchange Rate”) (any fraction less than one (1) cent arising as a result of such calculation shall be rounded
up to the nearest one (1) cent); provided, however, that if the Reference Yen Price is lower than either (a) the average of the
Closing Prices for the thirty (30) consecutive trading days (excluding days on which there is no Closing Price) commencing forty-five
(45) trading days immediately before the day immediately after the allotment date of Stock Acquisition Rights, or (b) the Closing
Price on the allotment date of Stock Acquisition Rights (if there is no Closing Price on such date, the Closing Price on the immediately
preceding trading day), the Exercise Price shall be the U.S. dollar amount obtained by dividing the higher price of (a) or (b)
above by the Reference Exchange Rate (any fraction less than one (1) cent arising as a result of such calculation shall be rounded
up to the nearest one (1) cent).
(ii)
Adjustment of Exercise Price
In
the event that the Corporation conducts a stock split (including free distribution of shares (musho-wariate)) or a consolidation
of the Common Stock after the allotment date of Stock Acquisition Rights, the Exercise Price shall be adjusted in accordance with
the following formula, and any fraction less than one (1) yen or one (1) cent resulting from the adjustment shall be rounded up
to the nearest one (1) yen or one (1) cent, respectively.
|
Exercise
Price
after
adjustment
|
=
|
Exercise
Price
before
adjustment
|
x
|
1
|
|
Ratio
of split or consolidation
|
In
addition, in the case of a merger with any other company, corporate split or reduction of the amount of capital of the Corporation,
or in any other case similar thereto where an adjustment of Exercise Price shall be required, in each case after the allotment
date of Stock Acquisition Rights, the Exercise Price shall be adjusted appropriately to the extent reasonable.
|
|
(4)
|
Period
during which Stock Acquisition Rights May be Exercised
|
The
period during which Stock Acquisition Rights may be exercised will be the period from the day on which one (1) year has passed
from the allotment date of Stock Acquisition Rights to the day on which ten (10) years have passed from such allotment date.
|
|
(5)
|
Conditions
for the Exercise of Stock Acquisition Rights
|
|
|
(i)
|
No
Stock Acquisition Right may be exercised in part.
|
|
|
(ii)
|
In
the event of a resolution being passed at a general meeting of shareholders of the Corporation
for an agreement for any consolidation, amalgamation or merger (other than a consolidation,
amalgamation or merger in which the Corporation is the continuing corporation), or in
the event of a resolution being passed at a general meeting of shareholders of the Corporation
(or, where a resolution of a general meeting of shareholders is not necessary, at a meeting
of the Board) for any agreement for share exchange (kabushiki-kokan) or any plan
for share transfer (kabushiki-iten) pursuant to which the Corporation is to become
a wholly-owned subsidiary of another corporation, Stock Acquisition Rights may not be
exercised on and after the effective date of such consolidation, amalgamation or merger,
such share exchange (kabushiki-kokan) or such share transfer (kabushiki-iten).
|
|
|
(iii)
|
Conditions
for the exercise of Stock Acquisition Rights other than the conditions referred to above
shall be determined by the Board.
|
|
|
(6)
|
Mandatory
Repurchase of Stock Acquisition Rights
|
Not
applicable
|
|
(7)
|
Matters
concerning the Amount of Capital and the Additional Paid-in Capital Increased by the
Issuance of Shares upon Exercise of Stock Acquisition Rights
|
|
|
(i)
|
The
amount of capital increased by the issuance of shares upon exercise of Stock Acquisition
Rights shall be the amount obtained by multiplying the maximum limit of capital increase,
as calculated in accordance with the provisions of Paragraph 1, Article 17 of the Company
Accounting Ordinance of Japan, by 0.5, and any fraction less than one (1) yen arising
as a result of such calculation shall be rounded up to the nearest one (1) yen.
|
|
|
(ii)
|
The
amount of additional paid-in capital increased by the issuance of shares upon exercise
of Stock Acquisition Rights shall be the amount obtained by deducting the capital to
be increased, as provided in (i) above, from the maximum limit of capital increase, as
also provided in (i) above.
|
|
|
(8)
|
Restrictions
on the Acquisition of Stock Acquisition Rights through Transfer
|
The
Stock Acquisition Rights cannot be acquired through transfer, unless such acquisition is expressly approved by the Board.
(For
reference)
1.
Dilution ratio of shares
The
maximum limit of the aggregate number of shares to be issued or transferred upon exercise of the Stock Acquisition Rights is 5,000,000,
which represents 0.40 percent of the total shares outstanding as of March 31, 2021. The total of such number of shares and the
maximum aggregate number of shares to be issued or transferred upon the exercise of all outstanding stock acquisition rights for
the purpose of granting stock options is 19,022,400, which represents 1.51 percent of the total shares outstanding as of March
31, 2021.
2.
Outline of Stock Acquisition Rights
|
Element
|
Description
|
|
Plan
Type
|
Issuance
of stock options (Stock Acquisition Rights) in accordance with the provisions of the Companies Act of Japan
● Yen-denominated:
Mainly for residents of Japan
● U.S.
dollar-denominated: Mainly for non-residents of Japan
|
|
Exercise
Price
|
Highest
price among below 3 conditions:
● Average of closing price during 30 business days starting from 45 business days before the allotment date
● Average of closing price during 10 business days before the allotment date
● Closing Price on the allotment date
|
|
Period
during which Stock Acquisition Rights May be Exercised
|
The
period during which Stock Acquisition Rights may be exercised will be the period from the day on which one (1) year has passed
from the allotment date of Stock Acquisition Rights to the day on which ten (10) years have passed from such allotment date. (The
exercise of Tax-qualified Stock Acquisition Rights with Exercise Price Denominated in Yen is restricted during a two-year
period from the date of a resolution of the Board for issuance.)
|
|
Restrictions
on the Exercise of the Stock Acquisition Rights
|
Allocation
Agreement provides restrictions on the exercise of Stock Acquisition Rights such as a limitation on the number of exercisable
Stock Acquisition Rights (in general, one-third of the total number of the allocated Stock Acquisition Rights will vest and
be exercisable each year after the restricted period, and all of the allocated Stock Acquisition Rights will be exercisable
on and after the date on which three (3) years have passed from the allotment date of the Stock Acquisition Rights).
|
[For
Reference]
Outline
of Liability Limitation Agreement
Pursuant
to the Articles of Incorporation, the Corporation has entered into liability limitation agreements with all non-executive Directors
including outside Directors.
A
summary of such liability limitation agreements is as follows:
|
|
(1)
|
In
a case where a non-executive Director is liable to the Corporation after the execution of the liability limitation agreement for
damages pursuant to Article 423, Paragraph 1 of the Companies Act, such liabilities shall be limited to the greater of either
30 million yen or an amount equal to the aggregate sum of the amounts prescribed in each item of Article 425, Paragraph 1 of the
Companies Act, only where the non-executive Director acted in good faith without any gross negligence in performing his/her duties
as a Director of the Corporation.
|
|
|
(2)
|
In
a case where a non-executive Director is reelected as a non-executive Director of the Corporation and reassumes his/her office
as such on the expiration of the term of his/her office as a non-executive Director of the Corporation, the liability limitation
agreement shall continue to be effective after the reelection and re-assumption without any action or formality.
|
Summary
of Stock Acquisition Rights (SARs) issued by the Corporation in the past (outstanding as of March 31, 2021)
|
Name
(Date
of issuance)
|
Exercise
period
|
Total
number
of SARs
issued
|
Number
of
shares to be
issued or
transferred
|
Exercise
price
|
Percentage
of SARs
exercised
|
|
The
twenty-second series of Common Stock Acquisition Rights (November 22, 2011)
|
November
22, 2012
~November
21, 2021
|
247
|
24,700
Common Stock
|
¥
1,523
|
96.6%
|
|
The
twenty-third series of Common Stock Acquisition Rights (November 22, 2011)
|
November
22, 2012
~November
21, 2021
|
775
|
77,500
Common Stock
|
U.S.$
19.44
|
94.5%
|
|
The
twenty-fourth series of Common Stock Acquisition Rights (December 4, 2012)
|
December
4, 2013
~
December 3, 2022
|
240
|
24,000
Common Stock
|
¥
932
|
96.3%
|
|
The
twenty-fifth series of Common Stock Acquisition Rights (December 4, 2012)
|
December
4, 2013
~
December 3, 2022
|
1,026
|
102,600
Common Stock
|
U.S.$
11.23
|
89.0%
|
|
The
twenty-sixth series of Common Stock Acquisition Rights (November 20, 2013)
|
November
20, 2014
~
November 19, 2023
|
885
|
88,500
Common Stock
|
¥
2,007
|
88.9%
|
|
The
twenty-seventh series of Common Stock Acquisition Rights (November 20, 2013)
|
November
20, 2014
~
November 19, 2023
|
1,409
|
140,900
Common Stock
|
U.S.$
20.01
|
84.1%
|
|
The
twenty-eighth series of Common Stock Acquisition Rights (November 20, 2014)
|
November
20, 2015
~
November 19, 2024
|
2,437
|
243,700
Common Stock
|
¥
2,410.5
|
70.5%
|
|
The
twenty-ninth series of Common Stock Acquisition Rights (November 20, 2014)
|
November
20, 2015
~
November 19, 2024
|
1,673
|
167,300
Common Stock
|
U.S.$
20.67
|
78.8%
|
|
The
thirtieth series of
Common
Stock Acquisition Rights (November 19, 2015)
|
November
19, 2016
~
November 18, 2025
|
3,239
|
323,900
Common Stock
|
¥
3,404
|
71.4%
|
|
The
thirty-first series of
Common
Stock Acquisition Rights (November 19, 2015)
|
November
19, 2016
~
November 18, 2025
|
2,188
|
218,800
Common Stock
|
U.S.$
27.51
|
77.2%
|
|
Name
(Date
of issuance)
|
Exercise
period
|
Total
number of
SARs
issued
|
Number
of
shares to be
issued or
transferred
|
Exercise
price
|
Percentage
of SARs
exercised
|
|
The
thirty-second series of
Common
Stock Acquisition Rights (November 22, 2016)
|
November
22, 2017
~
November 21, 2026
|
6,721
|
672,100
Common Stock
|
¥
3,364
|
54.5%
|
|
The
thirty-third series of
Common
Stock Acquisition Rights (November 22, 2016)
|
November
22, 2017
~
November 21, 2026
|
4,462
|
446,200
Common Stock
|
U.S.$
31.06
|
68.7%
|
|
The
thirty-fourth series of
Common
Stock Acquisition Rights (November 21, 2017)
|
November
21, 2018
~
November 20, 2027
|
8,728
|
872,800
Common Stock
|
¥
5,231
|
34.9%
|
|
The
thirty-fifth series of
Common
Stock Acquisition Rights (November 21, 2017)
|
November
21, 2018
~
November 20, 2027
|
7,872
|
787,200
Common Stock
|
U.S.$
45.73
|
42.4%
|
|
The
thirty-sixth series of
Common
Stock Acquisition Rights (February 28, 2018)
|
February
28, 2019
~
February 27, 2028
|
58
|
5,800
Common Stock
|
¥
5,442
|
65.7%
|
|
The
thirty-seventh series of
Common
Stock Acquisition Rights (February 28, 2018)
|
February
28, 2019
~
February 27, 2028
|
150
|
15,000
Common Stock
|
U.S.$
50.39
|
—
|
|
The
thirty-eighth series of
Common
Stock Acquisition Rights (November 20, 2018)
|
November
20, 2019
~
November 19, 2028
|
12,906
|
1,290,600
Common Stock
|
¥
6,440
|
12.9%
|
|
The
thirty-ninth series of
Common
Stock Acquisition Rights (November 20, 2018)
|
November
20, 2019
~
November 19, 2028
|
9,873
|
987,300
Common Stock
|
U.S.$
56.22
|
19.8%
|
|
The
fortieth series of
Common
Stock Acquisition Rights (November 20, 2019)
|
November
20, 2020
~
November 19, 2029
|
16,453
|
1,645,300
Common Stock
|
¥
6,705
|
0.4%
|
|
The
forty-first series of
Common
Stock Acquisition Rights (November 20, 2019)
|
November
20, 2020
~
November 19, 2029
|
13,934
|
1,393,400
Common Stock
|
U.S.$
60.99
|
7.5%
|
|
The
forty-second series of
Common
Stock Acquisition Rights (April 17, 2020)
|
April
17, 2021
~
April 16, 2030
|
200
|
20,000
Common Stock
|
U.S.$
63.75
|
—
|
|
The
forty-third series of
Common
Stock Acquisition Rights (November 18, 2020)
|
November
18, 2021
~
November 17, 2030
|
22,520
|
2,252,000
Common Stock
|
¥
9,237
|
—
|
|
The
forty-fourth series of
Common
Stock Acquisition Rights (November 18, 2020)
|
November
18, 2021
~
November 17, 2030
|
22,228
|
2,222,800
Common Stock
|
U.S.$
87.48
|
—
|
Note:
All series of Stock Acquisition Rights were issued for the purpose of granting stock options. No cash payment was required for
the allocation.
|
(1)
|
Stock
Acquisition Rights held by Directors and Corporate Executive Officers of the Corporation
(as of March
31, 2021)
|
|
Name
|
Directors
(Excluding
Outside Directors) and
Corporate Executive
Officers
|
Outside
Directors
|
Number
of
shares to be
issued or
transferred
|
Number
of
holders
|
Number
of
shares to be
issued or
transferred
|
Number
of holders
|
|
The
twenty-second series of Common Stock Acquisition Rights
|
4,000
|
1
|
—
|
—
|
|
The
twenty-sixth series of Common Stock Acquisition Rights
|
10,000
|
1
|
—
|
—
|
|
The
twenty-eighth series of Common Stock Acquisition Rights
|
112,000
|
4
|
—
|
—
|
|
The
thirtieth series of Common Stock Acquisition Rights
|
52,900
|
4
|
—
|
—
|
|
The
thirty-second series of Common Stock Acquisition Rights
|
220,500
|
6
|
—
|
—
|
|
The
thirty-fourth series of Common Stock Acquisition Rights
|
207,500
|
5
|
—
|
—
|
|
The
thirty-eighth series of Common Stock Acquisition Rights
|
250,000
|
6
|
—
|
—
|
|
The
fortieth series of Common Stock Acquisition Rights
|
260,000
|
6
|
—
|
—
|
|
The
forty-third series of Common Stock Acquisition Rights
|
260,000
|
6
|
—
|
—
|
|
(2)
|
Stock
Acquisition Rights allocated to employees and others by the Corporation during the fiscal
year ended March 31, 2021
|
The
details of these Stock Acquisition Rights are mentioned in the forty-second, forty-third and forty-fourth series of Common Stock
Acquisition Rights above.
Stock
Acquisition Rights allocated to employees of the Corporation, directors, officers and employees of the Corporation’s subsidiaries
|
Name
|
Employees
of the Corporation
|
Directors,
officers and employees of
the Corporation’s subsidiaries
|
Number
of shares
to be issued or
transferred
|
Number
of
persons
allocated
|
Number
of shares
to be issued or
transferred
|
Number
of
persons
allocated
|
|
The
forty-second series of
Common
Stock Acquisition Rights
|
—
|
—
|
20,000
|
1
|
|
The
forty-third series of
Common
Stock Acquisition Rights
|
399,000
|
363
|
1,600,900
|
1,634
|
|
The
forty-fourth series of
Common
Stock Acquisition Rights
|
5,500
|
2
|
2,249,200
|
1,101
|
Amounts
of remuneration paid to Directors and Corporate Executive Officers (for the fiscal year ended March 31, 2021)
|
|
Fixed
remuneration
|
Remuneration
linked to
business results
|
Stock
acquisition rights
(Note
5)
|
Restricted
stock
(Note
7)
|
Phantom
Restricted Stock Plan (Note 8)
|
|
Number
of persons
|
Amount
|
Number
of persons
|
Amount
|
Number
of persons
|
Amount
|
Number
of persons
|
Amount
|
Number
of persons
|
Amount
|
|
Directors
(Outside
Directors)
(Notes
1, 2)
|
14
(13)
|
Million
Yen
183
(163)
|
—
(
— )
|
Million
Yen
—
(Note 3)
(
— )
|
—
(
— )
|
Million
Yen
—
(Note 6)
(
— )
|
14
(13)
|
Million
Yen
66
(59)
|
1
(
1 )
|
Million
Yen
57
(57)
|
|
Corporate
Executive Officers
|
6
|
424
|
6
|
561
(Note
4)
|
6
|
443
|
6
|
476
|
1
|
122
(Note
9)
|
|
Total
|
20
|
606
|
6
|
561
|
6
|
443
|
20
|
542
|
2
|
179
|
Notes:
|
|
1.
|
The
number of persons does not include two Directors who concurrently serve as Corporate
Executive Officers, because Sony Group Corporation does not pay any additional remuneration
for services as a Director to Directors who concurrently serve as Corporate Executive
Officers.
|
|
|
2.
|
The
number of persons includes four Directors who resigned on the day of the Ordinary General
Meeting of Shareholders held on June 26, 2020.
|
|
|
3.
|
Sony
Group Corporation does not pay remuneration linked to business results to Directors who
do not concurrently serve as Corporate Executive Officers.
|
|
|
4.
|
The
amount of remuneration linked to business results for the fiscal year ended March 31,
2021 that is to be paid in June 2021.
|
|
|
5.
|
As
to stock acquisition rights, the amount above is that of expenses Sony Group
Corporation recorded during the fiscal year ended March 31, 2021 applicable to
stock acquisition rights granted.
|
|
|
6.
|
Sony
Group Corporation does not grant stock acquisition
rights to Directors who do not concurrently serve
as Corporate Executive Officers.
|
|
|
7.
|
As
to restricted stock, the amount above is that of expenses Sony Group
Corporation recorded during the fiscal year ended March 31, 2021 applicable to
restricted stock.
|
|
|
8.
|
The
phantom restricted stock plan referenced above includes (i) the amount which is to be
paid to one Director who will resign on the date of the Ordinary General Meeting of Shareholders
to be held on June 22, 2021 and (ii) the amount which was paid to one former Corporate
Executive Officer who retired from Sony Group Corporation on March 31, 2021. The remuneration
amount under the phantom restricted stock plan shall be calculated by multiplying the
common stock price (closing price) as of the date he/she retired by the points accumulated
under the phantom restricted stock plan during his/her term in office, however, the amount
of the phantom restricted stock plan to be paid to the foregoing one Director is based
on the common stock price (closing price) as of March 31, 2021. Sony
Group Corporation recorded 1,344 million
yen in expenses during the fiscal year ended March 31, 2021 applicable to the phantom
restricted stock plan for Directors and Corporate Executive Officers.
|
|
|
9.
|
The
amount applicable to points which are accumulated during his term in office as Corporate
Executive Officer.
|
Basic
policy regarding remuneration for Directors and Corporate Executive Officers
The
basic policy regarding remuneration for, respectively Directors and Senior Executives determined by the Compensation Committee
is as follows:
(1)
Basic policy regarding Director remuneration
The
primary duty of Directors is to supervise the performance of business operations of Sony as a whole. In order to improve this
supervisory function over the business operations of Sony, which is a global company, the following two elements have been established
as the basic policy for the determination of remuneration of Directors. No Director remuneration is paid to those Directors who
concurrently serve as Corporate Executive Officers.
|
|
●
|
Attracting
and retaining an adequate talent pool of Directors possessing the requisite abilities
to excel in the global marketplace; and
|
|
|
●
|
Ensuring
the effectiveness of the supervisory function of Directors.
|
Based
on the above, Director remuneration shall consist of the following components. The amount of each component and its percentage
of total remuneration shall be at an appropriate level determined in accordance with the basic policy above and based on research
conducted by a third party regarding remuneration of directors of both Japanese and non-Japanese companies.
|
Type
of remuneration
|
Description
|
|
Fixed
remuneration
|
● The amount of fixed remuneration shall be at an appropriate level determined in accordance with the basic policy above and
based on research conducted by a third party regarding remuneration of directors of both Japanese and non-Japanese companies.
|
|
Remuneration
linked to stock price
(restricted
stock)
|
● Granted
to further promote shared values between the shareholders and Directors and incentivize Directors to develop and maintain a sound
and transparent management system.
● Any
Director to whom restricted stock is granted, in principle, may not sell or transfer the granted shares during his/her tenure,
and such restriction is to be released on the date such Director resigns.
|
|
Phantom
restricted stock plan
|
● Points
determined every year by the Compensation Committee and granted to certain Directors every year during their term in office, with
the remuneration amount calculated at the time of resignation by multiplying the common stock price (closing price) by the individual’s
accumulated points.
*
Because Sony replaced the phantom restricted stock plan for Directors
with restricted stock as from the fiscal year ended March 31, 2018, Sony did not grant new points to Directors during the fiscal
year ended March 31, 2021.
|
(2)
Basic policy regarding Senior Executive remuneration
Senior
Executives are key members of management responsible for executing the operations of Sony as a whole, or respective businesses
of Sony. In order to further improve the business results of Sony, the following two elements have been established as the basic
policy for the determination of remuneration of Senior Executives.
|
|
●
|
Attracting
and retaining an adequate talent pool possessing the requisite abilities to excel in
the global marketplace; and
|
|
|
●
|
Providing
effective incentives to improve business results on a short-, medium- and long- term
basis.
|
Based
on the above, Senior Executive remuneration shall basically consist of the following components. The amount of each component
and its percentage of total remuneration shall be at an appropriate level determined in accordance with the above basic policy
and the individual’s level of responsibility and based on research conducted by a third party regarding remuneration of
management of both Japanese and non-Japanese companies, with emphasis on linking Senior Executive remuneration to business results
and shareholder value.
|
Type
of remuneration
|
Description
|
|
Fixed
remuneration
|
● The amount of fixed remuneration shall be at an appropriate level determined based on research conducted by a third party
regarding remuneration of management of both Japanese and non-Japanese companies, according to his/her responsibility, and
in order to maintain competitiveness in recruiting talent.
|
|
Remuneration
linked to business results
|
● Structured
appropriately and based on appropriate indicators to ensure that such remuneration effectively incentivizes Senior Executives
to achieve the mid- to long- term and the corresponding fiscal year’s corporate targets.
● Specifically,
the amount to be paid to Senior Executives shall be determined based on the level of achievements of the targets of indicators
of (1) and (2) below, and can fluctuate, in principle, within the range from 0 percent to 200 percent of the standard payment
amount (“Business Results Linked Standard Payment Amount”) based on the achievement of the below-mentioned targets.
(1) Certain
key performance indicators linked to consolidated or individual business results of Sony of the corresponding fiscal year, such
as Return of Equity (“ROE”), Net Income attributable to Sony Group Corporation’s Stockholders and Operating
Cash Flow (“Financial Performance KPIs”), which indicators are selected based on the areas for which each Senior Executive
is responsible.
(2) The
individual performance of the area(s) for which each Senior Executive is responsible.
● Efforts
to accelerate collaborations among businesses of Sony from the viewpoint of value creation as One Sony as well as sustainability
initiatives related to social value creation and ESG (environment, social and governance) shall be included in the evaluation
factors for individual performance.
● The
Business Results Linked Standard Payment Amount shall be determined so that such amount is within a certain percentage of the
cash compensation (total of the fixed remuneration and the remuneration linked to business results), which percentage shall be
determined in accordance with each individual’s level of responsibility.
|
|
Type
of remuneration
|
Description
|
|
Remuneration
linked to stock price
(Stock
acquisition rights and restricted stock)
|
● Stock
acquisition rights and restricted stock are granted to incentivize Senior Executives to increase mid-to long-term shareholder
value.
● The
exercise of the stock acquisition rights is restricted during a one-year period from the allotment date, and in general, one-third
of the total number of exercisable stock acquisition rights will be vested and exercisable each year thereafter. (All of the allocated
stock acquisition rights will be exercisable on and after three years from the allotment date.)
● The
Senior Executives to whom restricted stock is granted, in principle, may not sell or transfer the granted stock before the third
anniversary date of the Ordinary General Meeting of Shareholders of the fiscal year when
the subject restricted stock was granted.
● In
principle, remuneration for a Senior Executive who has a greater management responsibility and influence over Sony as a whole
has a higher proportion of remuneration linked to stock price which is directly linked to the corporate value. (Please see below
Reference: Executive Compensation Package Design to Focus on Long-Term Management)
● The
amount of remuneration linked to the stock price shall be determined so that the amount is within a certain percentage of the
total cash compensation (total of the fixed remuneration and the remuneration linked to business results) and remuneration linked
to the stock price.
|
|
Phantom
restricted stock plan
|
● Points determined every year by the Compensation Committee shall be granted to Senior Executives every year during his/her
tenure, and at the time of resignation, the remuneration amount shall be calculated by multiplying the common stock price
(closing price) by the individual’s accumulated points.
|
(For
Reference)
Executive
Compensation Package Design to Focus on Long-Term Management
The
bar chart below shows the components of remuneration for Corporate Executive Officers for the fiscal year ended March 31, 2021.
For this chart, the remuneration linked to business results is based on the Business Results Linked Standard Payment Amount for
each Corporate Executive Officer. As to the remuneration linked to stock price, the underlying amount is calculated based on the
fair value of a stock acquisition right as of the date such stock acquisition right was granted in the fiscal year ended March
31, 2021 and the issue price of the restricted stock when granted. Accordingly, the components of remuneration based on the amounts
actually paid will be different from the chart below.
Procedures
to determine the remuneration of Directors and Senior Executives
Based
on the policy outlined above, the amount and content of the compensation for each Director and Senior Executive are determined
by the Compensation Committee or otherwise under the supervision of the Compensation Committee. Specifically, in principle, each
year at the meeting of the Compensation Committee held after the Ordinary General Meeting of the Shareholders, the amount of basic
renumeration and the content of each Director’s and Senior Executive’s compensation for the corresponding fiscal year
is determined. Thereafter, at the meeting of the Compensation Committee held after the corresponding fiscal year end, the final
amount of compensation of each Director and Corporate Executive Officer, including the amount of remuneration linked to business
results, is determined, and as for Senior Executives other than Corporate Executive Officers, such amount is otherwise determined
under the supervision of the Compensation Committee.
For
determining the amount of the remuneration linked to business results for each Senior Executive, the Business Results Linked Standard
Payment Amount, the targets for the Financial Performance KPIs and the targets for the individual performance of the areas(s)
for which each Senior Executive is responsible are determined and thereafter, the amount of such remuneration is determined based
on the level of achievement of such targets for the Financial Performance KPIs and the individual performance at the meeting of
the Compensation Committee held after the corresponding fiscal year end for Corporate Executive Officers or otherwise under the
supervision of the Compensation Committee for Senior Executives other than Corporate Executive Officers.
The
amount of compensation of each Director and Senior Executive for the fiscal year ended March 31, 2021 was also determined by the
Compensation Committee or otherwise under the supervision of the Compensation Committee according to the procedure above.
Corporate
Executive Officer remuneration linked to business results for the fiscal year ended March 31, 2021
The
Business Results Linked Standard Payment Amount for each Corporate
Executive Officer for the fiscal year ended March 31, 2021 was determined to be in the range between 60% and 100% of the amount
of the fixed remuneration of such Corporate Executive Officer according to his/her responsibility.
The
formula to calculate the amount of the remuneration linked to
business results to be paid to Corporate Executive Officers is as follows.
|
The amount of the
remuneration linked to business results to be paid to Corporate
Executive Officers
|
=
|
Business Results Linked Standard Payment Amount*
|
x
|
The payment rate of the remuneration linked
to business results ** (0 to 200%)
|
* Business Results Linked Standard Payment Amount: Determined to be in the range between 60% and 100% of the amount of the fixed remuneration of each Corporate Executive Officer.
** Payment rate of the remuneration linked to business results: Determined in principle, within the range from 0 percent to 200 percent based on the achievement of (i) Financial Performance KPIs based on the areas for which each Corporate Executive Officer is responsible and (ii) the individual performance of the area(s) for which each Corporate Executive Officer is responsible.
The
Financial Performance KPIs and the weighting of such Financial Performance KPIs mainly used for the Corporate Executive Officers
were as follows:
|
KPI
|
Weight
|
Target
to be achieved for the fiscal year
ended March 31, 2021 (Consolidated)
|
Result
for the fiscal
year ended March 31,
2021 (Consolidated)
|
|
Operating
CF
|
50%
|
Amount
determined in order to achieve the Operating CF (as defined below) target under Sony’s Third Mid-Range Plan of 2.2 trillion
yen or more for the three-year period from the fiscal year ended March 31, 2019
|
1
trillion 122.2 billion yen
|
|
Net
Income attributable to Sony Group Corporation’s Stockholders
|
40%
|
510
billion yen
|
1
trillion 171.8 billion yen
|
|
ROE
|
10%
|
11.4%
|
24.2%
|
Operating
cash flow (consolidated), excluding the Financial Services Segment (“Operating CF”), was selected as a Financial Performance
KPI and was weighed the highest due to operating cash flow being determined as the most important performance metric under the
Third Mid-Range Plan of Sony. ROE was also selected due to it being one of the financial targets of the Sony’s Third Mid-Range
Plan. Net Income attributable to Sony Group Corporation’s Stockholders was selected in order to incentivize management to
achieve the current fiscal year’s corporate target.
For
the target to be achieved for the Operating CF for the fiscal year ended March 31, 2021, an amount which the Compensation Committee
determined as appropriate was set in order to achieve the Operating CF target under Sony’s Third Mid-Range Plan of 2.2 trillion
yen or more for the three-year period from the fiscal year ended March 31, 2019. The target for the Net Income attributable to
Sony Group Corporation’s Stockholders for the fiscal year ended March 31, 2021 was set as 510 billion yen, which was the
forecasted amount for the Net Income attributable to Sony Group Corporation’s Stockholders for the fiscal year ended March
31, 2021 announced in May 2020. Target for ROE was 11.4% for the fiscal year ended March 31, 2021. The results for the Financial
Performance KPIs for the fiscal year ended March 31, 2021 were as follows: Operating CF: 1 trillion 122.2 billion yen, Net Income
attributable to Sony Group Corporation’s Stockholders: 1 trillion 171.8 billion yen, ROE: 24.2%, each exceeding the targeted
amount. In addition, the accumulated amount of Operating CF during the three-year period from the fiscal year ended March 31,
2019 was 2 trillion 638.5 billion yen, which exceeded the targeted amount under Sony’s Third Mid-Range Plan.
As
outlined above under “(6) Basic policy regarding Director and Senior Executive remuneration”, remuneration linked
to business results for Senior Executives for the fiscal year ended March 31, 2021 was determined based on the level of achievement
of the indicators which were selected based on the areas of responsibility of the relevant Senior Executive and the individual
performance of the area(s) for which the relevant Senior Executive was responsible. The amounts to be paid to the Senior Executives
were determined within the range from 0 percent to 200 percent of the Business Results Linked Standard Payment Amount.
(For
Reference)
Restricted
Stock
Sony
Group Corporation introduced a restricted stock plan starting from the fiscal year ended March 31, 2018, pursuant to which shares
of restricted stock are allotted to Sony Group Corporation’s Corporate Executive Officers and other executives and non-executive
Directors of Sony Group Corporation (the “Non-Executive Directors”). The purpose of the plan for the Corporate Executive
Officers and other executives of Sony Group Corporation is to further reinforce management’s alignment with shareholder
value, and to incentivize management to improve mid- to long- term performance and increase shareholder value. Furthermore, the
purpose of the plan for the Non-Executive Directors is to incentivize these Directors to develop and maintain a sound and transparent
management system by further promoting shared values between the shareholders and the Non-Executive Directors.
The
grantees are not able to sell or transfer the granted shares during the restricted period, and Sony Group Corporation will acquire
the granted shares from a grantee without any consideration to, or consent of, the grantee under certain conditions. Details of
the plan, such as vesting conditions, eligibility and the number of grants, are determined by the Compensation Committee.
Dated:
May 26, 2021