Japan's Nippon Steel to transfer treasury shares under performance-linked pay scheme

Published February 25, 2026 at 1:20 a.m. UTC

Source: MarketScreener

Nippon Steel Corporation has approved the disposal of treasury shares in connection with the introduction of a performance-linked share compensation system for directors and executive officers.

At a board meeting on May 16, 2025, the company resolved to introduce a performance-linked compensation scheme using a trust structure for directors, excluding audit and supervisory committee members and outside directors, and for executive officers. The scheme was subsequently approved for directors at the 101st general meeting of shareholders on June 24, 2025.

On February 17, 2026, the board further resolved to delegate authority to the representative director and president to determine the disposal of treasury shares to the trustee of the trust. Following that delegation, the company has decided to proceed with the transaction.

Under the plan, 3,130,300 common shares will be disposed of on March 11, 2026 at a price of JPY673.9 per share, equivalent to $4.32 per share, for a total amount of JPY2,109,509,170, or approximately $13.5mn. The shares will be allotted to Sumitomo Mitsui Trust Bank, Limited (trust account), with Custody Bank of Japan, Ltd. acting as re-entrustment trustee.

The company said the scheme is designed to link part of eligible officers’ remuneration to its share price, aligning their interests with shareholders by sharing both gains and risks arising from stock price movements. The aim is to strengthen management’s focus on enhancing medium- to long-term performance and corporate value.

The number of shares to be disposed of was determined with reference to factors including the positions of eligible officers and expected changes in their composition during the trust period. It corresponds to the number of shares expected to be delivered under share delivery regulations established in connection with the scheme.

The resulting dilution is calculated at 0.06% of total issued shares as of 30 September 2025, equivalent to 5,373,633,760 shares, and 0.06% of total voting rights, or 51,860,520 votes, with figures rounded to the third decimal place. The calculations assume the five-for-one stock split implemented on October 1, 2025 had taken effect at the start of the fiscal year. The company said the scale of dilution and the number of shares involved are reasonable and that the impact on the market should be negligible.

The disposal price of JPY673.9 per share was set at the closing price on the Tokyo Stock Exchange on February 20, 2026, the business day preceding the decision, in order to eliminate pricing arbitrariness and reflect the prevailing market value.