Remuneration for Member of the Board of Directors

In order to create a remuneration system that supports the embodiment of “Innovator in Electronics” through the practice of the Murata Philosophy, which aims for creating shared value with stakeholders to contribute to sustainable corporate value enhancement, the following basic policy for the remuneration system for officers shall be established.

• The remuneration system for officers should share the values of its stakeholders, including shareholders, employees, customers, society, and communities, etc.
• Short-term incentive remuneration should maintain and deepen a corporate culture in which the Company's officers and employees work together autonomously, cooperate and collaborate toward sustainable company development through the creation of innovation
• Medium- to long-term incentive remuneration should increase officer's morale and motivation toward the creation of medium- to long-term economic value and social value
• The remuneration system should have a structure in which a highly independent Remuneration Advisory Committee proactively verifies the appropriateness of remuneration system for officers structure and remuneration amounts, etc. from the perspective of medium- to long-term value creation

As shown in Table 1, the remuneration for Executive Directors consists of basic remuneration (fixed remuneration) and variable remuneration. Variable remuneration consists of bonuses, performance-linked share-based remuneration (Performance share unit; PSU), and restricted stock remuneration (RS).
The remuneration level and composition ratio are based on the “Executive Remuneration Database” operated by the external remuneration consulting company, WTW (Willis Towers Watson) and will be determined by performing benchmarks on corporations similar to the Company’s type of industry and size and verifying the consistency with the basic policy of the officer’s remuneration system.
Furthermore, the composition ratio of remuneration elements of remuneration for the President and Representative Director is largely as shown in Table 4. The composition ratio of remuneration elements for other inside Members of the Board of Directors who are not Audit and Supervisory Committee Members is set so that variable remuneration is higher for upper ranking positions according to the responsibilities etc. for each position.

Remuneration for Outside Directors (excluding Audit and Supervisory Committee Members) independent of the Company's business execution consists only of basic remuneration, in light of their role. The level is determined with reference to benchmark results and other information from companies of similar industry or size. However, each Outside Director will be paid additional allowances, such as a Chairman's allowance or a Committee Member's allowance, depending on their responsibilities, such as being the Chairman or a member of a committee.

Remuneration for Members of the Board of Directors (including Outside Directors) who are Audit and Supervisory Committee Members consists only of basic remuneration, in light of their role. Individual remuneration is determined according to discussions between Members of the Board of Directors who are Audit and Supervisory Committee Members, pursuant to the provisions of Article 361, Paragraph (3) of the Companies Act.

From the perspective of strengthening the sharing of value with shareholders, the Company has recommended shareholdings as follows for Executive Directors. At the end of the current fiscal year, the President and Representative Director holds shares equivalent to 4.6 times his fixed remuneration.

In order to ensure soundness of the remuneration system for Members of the Board of Directors, the Company has established the malus and clawback provision, whereby based on the decision of the Board of Directors following deliberations by the Remuneration Advisory Committee, all or part of variable remuneration will be forfeited or repaid regardless of whether it has been paid or delivered under certain circumstances, such as misconduct or retrospective adjustments to financial statements due to fraudulent accounting. After the 86th Ordinary General Meeting of Shareholders held in June 2022, remuneration types to which this provision applies were a bonus before it was paid and the share-based remuneration before the lifting of transfer restrictions. However, after the 89th Ordinary General Meeting of Shareholders held in June 2025, they are variable remuneration paid or delivered from FY 2025 onward, and the target period is the fiscal year in which the relevant event occurred and the three preceding fiscal years.

Total compensation, etc. by category, total compensation by type and number of eligible Directors (2025FY)

(Notes)

1. Out of the total shown above, total compensation, etc., provided to six Outside Directors, is 108 million yen (only basic remuneration).
2. The amount of compensation, etc. for Members of the Board of Directors (excluding those who are Audit and Supervisory Committee Members) does not include employee salaries provided to Members of the Board of Directors concurrently serving as employees.

Targets and results of performance evaluation indicators for performance-linked compensation with the current fiscal year as the evaluation period

<Performance-linked share-based remuneration>

The performance-linked share-based remuneration uses average ROIC (post-tax basis), relative TSR, and sustainability indicators as performance evaluation indicators. The evaluation period consists of three consecutive fiscal years, and the actual results of the performance evaluation indicators will be finalized after the end of fiscal 2027, following the completion of the three-year period.

The Remuneration Advisory Committee deliberates on the remuneration system and levels for Members of the Board of Directors and reports its findings to the Board of Directors, and is entrusted from the Board of Directors to decide on the amounts of individual remuneration.

The members of the committees are selected by the Board of Directors from among its Members and Independent Outside Directors comprise the majority of the committee members in order to ensure the independence of the committees. Furthermore, the chairperson is an Outside Director.
The Remuneration Advisory Committee is currently made up of the following four Directors, three of whom are Independent Outside Directors. It is chaired by Yuko Yasuda, who is Independent Outside Director.

(Notes)

1. ◎ after the name means the person is the chairperson.

Activities of the Remuneration Advisory Committee held during FY 2025 were as follows.

(Notes)

1. The 89th term refers to the period starting from the 88th Ordinary General Meeting of Shareholders held on June 27, 2024 until the 89th Ordinary General Meeting of Shareholders held on June 27, 2025.
2. The 90th term refers to the period starting from the 89th Ordinary General Meeting of Shareholders held on June 27, 2025 until the 90th Ordinary General Meeting of Shareholders to be held on June 2026.
3. In June, December and January, a joint meeting for the Nomination Advisory Committee and the Remuneration Advisory Committee was held in addition to the meeting of the Remuneration Advisory Committee.
4. For information on the number of meetings and attendance rates, refer to
   Link: ESG Data colliction Page