Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.
August 21, 2025
Company name: GREE Holdings, Inc.
Name of representative: Yoshikazu Tanaka; Founder,
Chairman and CEO (Securities code: 3632; Tokyo
Stock Exchange Prime Market)
Inquiries: Toshiki Oya; Director, Senior Vice President, CFO
(Telephone: +81-3-5770-9500)
Notice Regarding Revision of the Executive Compensation SystemAt the meeting of the Board of Directors held on August 21, 2025, GREE Holdings, Inc. (the "Company")
resolved to revise the compensation system for the Company's Directors (excluding Outside Directors, Directors who serve as Audit and Supervisory Committee Members, and non-residents in Japan; same applies hereinafter), as outlined below.
This revision is conditional upon obtaining shareholder approval for the proposal regarding stock compensation at the 21st Annual General Meeting of Shareholders scheduled to be held on September 29, 2025.
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Executive Compensation System Policy
Set a fair and competitive level of compensation, taking into account the external talent market, internal equity, and management conditions.
Adopt a highly performance-linked compensation structure to motivate performance improvement.
Implement a stock compensation system strongly linked to shareholder value to align interests with shareholders.
Select performance indicators based on the management strategy, with challenging yet achievable target setting.
Ensure objectivity and transparency in the compensation system and its decision-making process.
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Compensation Level
Based on objective compensation data from external professional institutions, comparisons are made with both the overall market and peer companies competing for business and talent. Internal equity and management conditions are comprehensively considered to ensure fairness and competitiveness.
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Compensation Structure
To strengthen linkage with performance and alignment with shareholders, the ratio of Base Salary : Annual Bonus : Stock Compensation (details provided below) is approximately 1:1:1 at standard performance evaluation, regardless of position.
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Details of the Compensation System
The Company has introduced three types of compensation in order to achieve different objectives. Base Salary is designed to encourage steady execution of duties according to responsibility. Annual Bonus is intended to motivate the achievement of annual targets. Stock Compensation is aimed at promoting medium- to long-term enhancement of corporate value and aligning the interests of directors with those of shareholders.
Type of Compensation
Purpose
Performance Indicators
Performance
Evaluation Period
Details
Base Salary
Fixed
-
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Annual Bonus
Variable
Stock Compensation
Encourage steady execution of duties according to responsibilities
Amount determined based on a pay table reflecting responsibilities, paid monthly
Motivate achievement of annual targets
Consolidated sales
Consolidated operating profit
Businesss segment sales
Business segment operating profit
1 year
Based on calculation methods discussed by the Compensation Committee and resolved by the Board, payout rate varies from 0% to 200% according to annual performance
Individual performance
The Compensation Committee evaluates individual performance (except for CEO, whose evaluation is conducted by the Compensation Committee; for others, evaluated by the CEO and confirmed by the Committee), payout rate varies from 0% to 200%
Motivate medium-to long-term corporate value enhancement
Align interests with shareholders
Relative TSR
Operating profit CAGR
3 years
Points granted annually (number calculated by dividing the standard stock compensation amount by share price).
Based on calculation methods discussed by the Compensation Committee and resolved by the Board, number of points varies from 0% to 200% according to performance after three years.
Upon confirmation, points are converted into shares upon retirement.
Under the shareholding guidelines, sale is restricted until holdings exceed a value equivalent to 300% of base salary (600% for CEO).
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Variable Compensation: Annual Bonus and Stock Compensation (Details)
Annual Bonus
Cash incentive linked to performance, paid based on overall company performance, business performance, and individual performance for each fiscal year.
A target amount is set according to responsibilities, and the payout rate varies from 0% to 200% based on the calculation formula using consolidated revenue, consolidated operating profit, business revenue, business operating profit, and individual performance evaluation, with weighting ratios applied. Payment is made at a certain time after the Annual General Meeting of Shareholders for the relevant fiscal year.
Individual evaluations are conducted by the Compensation Committee for the CEO, and by the CEO for others, with the Committee confirming the results before finalizing evaluations.
Incentive curves are designed for each evaluation indicator so that the payout rate is 100% at standard performance, 200% at maximum performance, and 0% at minimum performance.
Incentive Curve (Illustrative Example)
Stock Compensation
Stock compensation granted based on company performance over three consecutive fiscal years, designed to motivate medium- to long-term corporate value enhancement and align interests with shareholders.
For each fiscal year during tenure, on a predetermined date ("Point Grant Date"), standard points (calculated by dividing the standard performance-linked stock compensation amount by the share price on a specified date) are granted. After the performance evaluation period (three consecutive fiscal years starting with the fiscal year including the Point Grant Date), the right to receive
company shares from a trust established for this system ("the Trust") is obtained.
The number of standard points granted in the initial fiscal year is adjusted between 0% and 200% based on the Company's TSR growth rate relative to TOPIX growth rate and the CAGR of consolidated operating profit, according to weighting ratios. (These adjusted points are referred to as "Confirmed Points.")
Upon retirement, shares corresponding to the number of Confirmed Points are delivered from the Trust.
Shares delivered cannot, in principle, be sold for one year after resignation as a Director.
The number of standard points is determined based on the business scale within the HD structure and the role level. The same applies to Directors concurrently serving as employees.
Incentive curves are designed for each evaluation indicator so that the payout rate is 100% at standard performance, 200% at maximum performance, and 0% at minimum performance (same as Annual Bonus).
Under the shareholding guidelines, sale is restricted until holdings exceed a value equivalent to 300% of base salary (600% for CEO).
Standard Points TableCorporate Classification (Profit Contribution in HD Management)
A
B
C
D
E
F
Role Responsibility (CEO at the top)
１
10.0
6.0
5.0
4.0
3.0
2.0
２
6.0
4.2
3.5
2.8
2.1
1.4
３
4.0
3.0
2.5
2.0
1.5
1.0
４
3.0
2.4
2.0
1.6
1.2
0.8
５
2.0
1.8
1.5
1.2
0.9
0.6
Note: The horizontal axis (A-F) indicates business scale classifications, while the vertical axis (1-5) indicates role responsibility levels.
Rolling Method for Granting and Confirming Standard PointsFY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2025 Grant
Performance Evaluation Period (3 years)
FY2026 Grant
Performance Evaluation Period (3 years)
FY2027 Grant
Performance Evaluation Period (3 years)
: Grant of Standard Points ■ : Confirmation of Points
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Compensation Governance
The Company's policy for determining the amount and calculation method of Directors' compensation is decided after deliberation by the Compensation Committee, which is composed of a majority of Outside Directors, and subsequent discussion at the Board of Directors.
The Compensation Committee consists of four Outside Directors and one Inside Director, with the chairperson being an Outside Director.