P.73 Officers and Board of Directors (5)

Officers and Board of Directors Corporate Governance Officers’ Compensation Basic Policy and Structure of Directors’ Compensation A basic policy for compensation of directors has been estab- lished on the basis of reports from the Compensation Advisory Committee, which advises the Board of Directors. Aspects of directorial compensation including the system, level, and composition are deliberated by the Compensation Advisory Committee on the basis of consultations from the Board of Directors and in consideration of the Basic Policy for Compen- sation, and are set based on the response of the Committee. Basic Policy for Compensation Composition of Directorial Compensation Item Overview Base Compensation Monthly Compensation (paid every month) Determined for each director in consideration of factors including position, strategic division overseen, and changes in the business environment Non-Performance-Based Stock Compensation Restricted stock is granted annually to each director in an amount determined in consideration of factors including position, strategic division overseen, and changes in the business environment Performance-Based Compensation (excluding outside director) This compensation system consists of “performance-based compensation,” which is paid based on an annual quantitative assessment of the degree to which numerical targets for consolidated operating profit have been met, and “qualitative assessment compensation,” which is paid based on an annual qualitative assessment of the performance of the strategic divisions for which each director is responsible.

• The compensation system shall be the foundation for recruiting and maintaining highly-talented human resources to achieve in- creased corporate value and accomplish our mission of public ser- vice, and for stable management.
• The compensation system shall have a focus on the shareholder’s perspective, and shall build value sharing with shareholders.
• The process of determining compensation shall be objective and highly transparent, and based on deliberations by the Compensa- tion Advisory Committee.

Medium- to Long-Term Incentive Stock-Based Compensation (excluding outside director) Upon completion of each Medium-Term Business Plan period, restricted stock is granted by determining a payout ratio (0–100%) based on the level of achievement of the targets set forth in the Medium-Term Business Plan (including capital efficiency metrics and sustainability goals), and by applying it to the base number of shares specified for each position and role. Composition Ratio of Directorial Compensation (excluding Medium- to Long-Term Incentive Stock-Based Compensation) Director (excluding the following) 50% 20% 20% 10% Based on the Basic Policy for Compensation referred to above, the directors’ compensation consists of “base compen- sation,” “non-performance-based stock compensation,” “per- formance-based compensation,” and “medium- to long-term incentive stock-based compensation. Beginning in FY2025, we revised the compensation system to more clearly link directors’ compensation with TBS’s corporate value by introducing “medium- to long-term incentive stock- based compensation” for directors excluding outside directors and “non-performance-based stock compensation” for outside directors, with the aim of further enhancing motivation to contribute to medium- to long-term improvement of corporate value and deepening value sharing with our stakeholders. Chairman & 50% 30% 20% Board Director President, Representative Director & CEO 40% 20% 30% 10% Outside Director 80% 20% 0 10 20 30 40 50 60 70 80 90 100 ■ Base Compensation ■ Non-Performance-Based Stock Compensation ■ Performance-Based Compensation (Performance-Linked Evaluation Compensation) ■ Performance-Based Compensation (Qualitative Evaluation Compensation) * The above composition ratio is based on a payout rate of 100% for performance-based compensation. Depending on performance-based compensation evaluations, the total amount of compensation for directors, excluding outside directors, varies within a range of 60% to 140%. * The medium- to long-term incentive stock-based compensation is excluded from the above composition ratio because it differs from other forms of remuneration in that it is evaluated and granted at the end of each Medium-Term Business Plan period and is not paid on a monetary basis. Assuming a payout rate of 100% for performance-based compensation and 100% for medium- to long-term incentive stock-based compensation, if the number of shares granted for one year of medium- to long-term incentive stock-based compensation is converted into a monetary amount based on TBS’s closing stock price of ¥5,591 on the Tokyo Stock Exchange as of March 31, 2026, the system is designed so that when the total amount of base compensation, performance-based compensation, and non-performance-based stock compensation is set at 1.0, the monetary value of the medium- to long-term incentive stock-based compensation is approximately 0.4 to 0.6. 73