Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

There Aren't Many Companies Where Discipline Is Effectively Applied to Determine Cash Allocation

Will the Incorporation of TSR into the Remuneration System Affect Cash Allocation?

Adopting ROIC as a KPI Is Positive, but the Issue of Executive Compensation Remains Unresolved

While Companies Buy Time Before Executing Fundamental Measures, Shareholder Proposals Keep Rising

Tracing the Root Causes of Multiple Gaps Between Managers and Investors Leads to a Single Issue

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

<ul>
<li>An increase in % of variable compensation in executive compensation, linked to medium-to-long-term performance targets, is expected to foster shareholder-oriented management and lead to growth of shareholder value over time.</li>
<li>Some caution is needed when executive compensation is linked to TSR. The key is to ensure that executive incentive compensation is determined based on combination of medium-to-long-term performance and TSR.</li>
<li>Although the proportion of performance-based and incentive compensation has been gradually increasing, it seems that many executives are still hesitant to take risks to create value.</li>
</ul>


An increase in % of variable compensation in executive compensation, linked to medium-to-long-term performance targets, is expected to foster shareholder-oriented management and lead to growth of shareholder value over time.
Some caution is needed when executive compensation is linked to TSR. The key is to ensure that executive incentive compensation is determined based on combination of medium-to-long-term performance and TSR.
Although the proportion of performance-based and incentive compensation has been gradually increasing, it seems that many executives are still hesitant to take risks to create value.


Although Executive Compensation Has Improved, Many Managers Still Seem Hesitant to Take Risks

TSE Tokyo Price Index TOPIX

Although Executive Compensation Has Improved, Many Managers Still Seem Hesitant to Take Risks