Compensation Committee

Compensation for Directors and Executive Officers

ORIX Group’s business objective is to increase shareholder value over the medium- to long-term.
ORIX believes in the importance of each director and Executive Officer responsibly performing his or her duties and cooperating as members of a team to produce continued growth of the Group. The Compensation Committee believes that in order to accomplish such business objectives, directors and Executive Officers should place emphasis not only on performance during the current fiscal year, but also on medium- to long-term results. Accordingly, under the basic policy that compensation should provide effective incentives, ORIX takes such factors into account when making decisions regarding the compensation system and compensation levels for directors and Executive Officers.
Taking this basic policy into consideration, we have established separate policies for the compensation of directors and Executive Officers in accordance with their respective roles based on a decision of the Compensation Committee held on June 25, 2024.

Compensation Policy for Directors

• The compensation policy for directors who are not also executive officers aims for compensation composed in a way that is effective in maintaining the supervisory and oversight functions of executive officers’ performance in business operations, which is the main duty of directors. Specifically, ORIX’s compensation structure for directors consists of fixed compensation and share-based compensation (*1). In addition, the Company strives to maintain a competitive level of compensation with director compensation according to the role fulfilled and receives third-party research reports on director compensation for this purpose.
• Fixed compensation is in principle the same amount for all directors with certain amounts added for directors serving as members or chairpersons of committees.
• For share-based compensation reflecting medium- to long-term performance, directors are granted a fixed number of points on an annual basis for their period of service, and they are paid in ORIX shares corresponding to the number of points they have accumulated at the time of retirement.

Compensation Policy for Executive Officers

• The compensation policy for executive officers, including those who are also directors, aims for a level of compensation that is effective in maintaining business operation functions, while also incorporating a component that is linked to current period business performance. Specifically, ORIX’s compensation structure for executive officers consists of fixed compensation, performance-linked compensation, and share-based compensation (*2). Our basic policy is to maintain a composition ratio of 1:1:1.
• In addition, the Company strives to maintain a competitive level of compensation with executive officer compensation according to the role fulfilled and receives third-party research reports on executive officer compensation for this purpose.
• Fixed compensation is determined according to each position’s role based on a standardized amount for each position.
• Performance-linked compensation (annual bonuses) for the fiscal year ended March 2024 is based on the level of achievement of the consolidated net income annual growth target as a company-wide performance indicator. 50% of the position-based standard amount is adjusted based on this company-wide indicator within a range of 0% to 200%. The remaining 50% is adjusted using the level of achievement of the division’s target for which the relevant executive officer was responsible as a division performance indicator (*3) within a range of 0% to 300%. In the case of representative executive officers, the level of achievement of the company-wide performance indicator is used as the sole performance indicator to adjust the standard amount within a range of 0% to 200%. These performance indicators are selected taking into consideration the company’s medium-term management targets. In addition to the above, annual bonuses for the President, Senior Managing Executive Officers, and Managing Executive Officers will be increased or decreased by an amount ranging from 0% to 30% of the base amount for each position based on progress toward the ESG-related Key Goals. If progress towards ESG-related Key Goals is proceeding as planned, the annual bonus will not be adjusted.
• For share-based compensation, which reflects medium- to long-term performance, executive officers are granted a fixed number of points based on their positions and are paid in ORIX shares corresponding to the number of points accumulated at the time of retirement.

1. Share-based compensation is a program under which annual points (a fixed number of points) are allocated to directors and executive officers while in office and ORIX shares are granted via a trust based on the cumulative number of points at the time of retirement. Points granted are determined based on guidelines established by the Compensation Committee. The Compensation Committee has not established a period during which shares delivered under this program must be held. If a determination is made that a director or executive officer engaged in substantially inappropriate conduct that causes harm to the Company while in office, the Compensation Committee may set restrictions on the payment of share-based compensation.
2. The compensation of executive officers who are assigned to an overseas subsidiary or who have a high level of specialization is determined through individual deliberations taking into consideration the local compensation system and compensation levels as well as specialization and other factors.
3. For performance-linked compensation (annual bonuses) based on the degree of achievement of targets regarding the performance of the divisions for which individual executive officers are responsible, achievement is determined comprehensively with a focus on the annual growth rate in the performance of the relevant division for the current fiscal term but also by incorporating qualitative determinations such as difficulty of targets, details of performance, strategic arrangements for the future, and ESG-related initiatives.

Compensation Clawback Policy

• ORIX has established a Compensation Clawback Policy pursuant to applicable NYSE listing standards.This Policy provides for the clawback of performance-linked compensation (annual bonus) received in excess of executive officers’ original salaries based on erroneous financial statements in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements.

Compensation of Directors, Executive Officers and Group Executives (FY2024.3)

1. 4 executive officers were newly appointed and 1 executive officer resigned. As of March 31, 2024, there were 11 directors (including 6 outside directors) and 25 executive officers (including executive officers concurrently serving as directors). Number of recipients and amounts paid include one executive officer who retired during the fiscal year ended March 2024.
2. The targets and results with regard to the KPIs of the performance-linked compensation listed in the table above are as follows:
   - Company-wide performance indicator
   We targeted the milestone rate with regard to the consolidated net income growth set by the Compensation Committee towards the achievement of the Company’s mid-term strategic directions, and achieved 105%.
   - Division performance indicator
   We set the performance target for each division based on the company-wide performance target, and achieved 0% to 150% (median: 100%) by 26 Executive Officers (based on the total evaluation including qualitative assessment).
3. The amount paid listed in the table above with regard to the share-based compensation is calculated by multiplying the number of points confirmed to be provided as the portion for FY2024.3 by the stock market price paid by the trust when ORIX’s shares were acquired (¥1,740.27 per share). Such amount is different from the actual total amount of the share-based compensation paid in the fiscal year ended in March 2024, which was ¥127 million paid to one Executive Officer who retired during FY2024.3.
4. ORIX did not provide stock options in the form of stock acquisition rights in FY2024.3.
5. Figures shown are rounded down by truncating figures of less than ¥1 million.