As of August 6, 2020

The amounts of compensation paid to individual directors are to be decided by the Nominating and Compensation Committee and set within the limit approved at the Ordinary General Meeting of Shareholders. These amounts are to be determined based on a comprehensive evaluation of factors including the responsibility of each director for the management of the Group and the progress of the Group's medium-term management plan. The amount of compensation paid to individual executive officers is to be decided by the Nominating and Compensation Committee. Director compensation is to be set at a level that will provide motivation for directors to perform their duties of making management decisions and providing supervisory functions. Compensation for directors includes fixed basic compensation, performance-linked bonuses based on the performance of the Company in a given fiscal year meant to serve as short-term incentives, and performance-linked stock-based compensation based on the medium-to-long-term performance of the Company designed to provide medium-to-long-term incentives. The portion of compensation linked to performance is meant to provide an incentive for pursuing sustainable growth. External directors only receive basic compensation out of consideration for their roles and their need for independence. Audit & Supervisory Board members shall only receive basic compensation. The amount of basic compensation paid to individual Audit & Supervisory Board members will be decided through discussion by the Audit & Supervisory Board, in line with the upper limit set at the Ordinary General Meeting of Shareholders. MARUI GROUP's officer compensation systems were revised in the fiscal year ended March 31, 2020, in reflection of the Company's previously low ratio of variable incentive compensation in comparison to other domestic companies as well as of social trends. This revision entailed increasing the ratios of short-term incentives and medium-to-long-term incentives and introducing sustainability targets as indicators used for determining medium-to-long-term incentives, making for officer compensation systems linked to co-creation sustainability management.

The compensation levels and the ratio of performance-linked compensation have been revised to increase the portion of performance-linked compensation. This revision was aimed at boosting motivation to contribute to improved medium-to-long-term performance and corporate value for the Company in order to have officers share the interests of shareholders and to strengthen management from the perspective of shareholders.

• Ratio up to the fiscal year ended March 31, 2019 Basic compensation : Performance-linked bonuses : Performance-linked stock-based compensation = 8 : 1 : 1
• Ratio from the fiscal year ending March 31, 2020 Basic compensation : Performance-linked bonuses : Performance-linked stock-based compensation = 6 : 1 : 3

Earnings per share will be set as the target indicator for performance-linked bonuses to better share value with shareholders and link bonuses to performance, and the performance-linked coefficient will be adjusted within a range of 0% to 200% based on the degree of accomplishment of the disclosed target for this indicator to decide performance-linked bonus amounts.

Target Indicators and Performance-Linked Coefficients

Officer Compensation in the Fiscal Year Ended March 31, 2020 (Millions of yen)

The upper limit for full-year compensation paid to directors has been set at ¥300 million (excluding employee salaries paid to directors that are also employees of the Company or Group companies) and at ¥50 million for external directors. Separate from this amount, the upper limit for performance-linked bonuses has been set at ¥100 million (excluding employee salaries paid to directors that are also employees of the Company or Group companies) paid to directors (excluding external directors) and the upper limit for performance-linked stock-based compensation issued to directors (the amount of money contributed to trusts on their behalf) has been set at ¥200 million per fiscal year to be multiplied by the number of fiscal years in the respective incentive period (¥400 million for the two-year period encompassing the fiscal year ended March 31, 2020, and the fiscal year ending March 31, 2021). In addition, the upper limit for monthly compensation of Audit & Supervisory Board members has been set at ¥6 million. All of these amounts were set at the Ordinary General Meeting of Shareholders. Amounts of compensation for individual officers are not listed as no officer received total compensation of more than ¥100 million.

Over the two-year period beginning with the fiscal year ending March 31, 2020, and ending with the fiscal year ending March 31, 2021, directors will be awarded points based on their rank at a set time each year. These points will then be adjusted via a performance-linked coefficient within a range of 0% to 110% determined based on the Company's performance with regard to three key performance indicators (return on equity, return on invested capital, and earnings per share) and ESG indicators. Shares of the Company's stock will then be allocated to each director in reflection of their aggregate total of points post-adjustment.

Target Indicators and Performance-Linked Coefficients

* Dow Jones Sustainability World Index: An ESG index comprising companies selected through comprehensive evaluation of economic, environmental, and social factors from the perspective of long-term improvements to shareholder value