MUFG today announced that it has decided to introduce a
share-based compensation plan using the ESOP[1] trust structure as
a stock incentive plan (the “Plan”) for employees in management
positions who satisfy certain requirements (the “Eligible
Employees”) at three MUFG subsidiaries (MUFG Bank, Ltd., Mitsubishi
UFJ Trust and Banking Corporation, and Mitsubishi UFJ Morgan
Stanley Securities Co., Ltd., hereinafter collectively referred to
as the “Covered Companies”).
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ESOP Trust Scheme (Graphic: Business
Wire)
1. Purpose of introducing the Plan
(1) Defining its purpose as being “Committed to empowering a
brighter future,” MUFG positions human capital as one of the most
important types of capital and aims to become a global financial
group capable of contributing to society and our customers by
empowering each employee to play an active role and thrive.
(2) To realize this vision, MUFG’s human capital management is
centered around strengthening business competitiveness and
fostering a culture of taking on challenges and transformation. In
order to enhance the well-being of our employees and achieve
sustainable growth for both individuals and the organization, MUFG
has decided to introduce the Plan, setting our sights on
reinforcing the virtuous cycle of increasing MUFG’s corporate value
and human capital management, and improving employee engagement and
retention.
2. Contents of the Plan
(1) The Plan adopts a scheme called an employee stock ownership
plan (the “ESOP Trust”). The ESOP Trust, similar to performance
share plans or restricted stock plans prevalent in the U.S., would
be a stock incentive plan under which MUFG shares and money
equivalent to the liquidation value of MUFG shares are delivered or
paid to Eligible Employees who satisfy certain requirements based
on predetermined share-based compensation plan rules.
(2) The Plan is expected to enable the Eligible Employees to
benefit financially from MUFG’s growth by holding shares in the
company, to encourage each employee to strive to improve corporate
value and ROE from a medium- to long-term perspective by better
demonstrating their leadership. In addition, making the Eligible
Employees shareholders is expected to increase their job
satisfaction and pride in working for MUFG, as well as boosting
retention by diversifying their incentives.
(3) Further details, including the acquisition of shares by the
ESOP Trust, will be announced when they are resolved.
[1] Abbreviation of Employee Stock Ownership Plan
①
MUFG shall make the resolution necessary
for the introduction of the ESOP Trust. Each Covered Company shall
make resolutions necessary for the introduction of the Plan.
②
Each Covered Company shall establish
share-based compensation plan rules regarding the Plan.
③
Each Covered Company shall contribute
funds to MUFG, and as the Settlor, MUFG shall entrust the
contributed funds to the Trustee and set up an ESOP Trust for the
Beneficiaries, defined as Eligible Employees who satisfy the
relevant requirements.
④
The ESOP Trust shall, in accordance with
instructions from the Trust Administrator, utilize the money
contributed to the Trust in ③ above to acquire MUFG shares from the
stock market or from MUFG (via disposal of treasury shares).
⑤
Dividends on MUFG’s shares in the ESOP
Trust shall be distributed in the same manner as dividends on other
MUFG shares.
⑥
The voting rights of the MUFG shares in
the ESOP Trust shall not be exercised throughout the trust
period.
⑦
During the trust period, the Beneficiaries
shall be awarded a certain number of points after a period of three
years, in accordance with the Plan’s rules. MUFG shares equivalent
to a certain percentage of the points accumulated shall be awarded
to Beneficiaries who satisfy certain requirements, in principle,
after the end of the three-year period.
MUFG shares equivalent to any remaining
points shall be converted into cash within the ESOP Trust in
accordance with the provisions of the trust agreement, and the
Beneficiaries shall receive money equivalent to the liquidation
value of the MUFG shares.
⑧
In the event that MUFG shares remain upon
the expiry of the trust period, MUFG can continuously use the ESOP
Trust as an incentive plan similar to the Plan by revising the
trust agreement and entrusting additional funds. If the ESOP Trust
is instead terminated, residual shares shall be transferred from
the ESOP Trust to MUFG at no charge as shareholder returns, and
MUFG will cancel the shares so acquired.
⑨
Dividends remaining in the ESOP Trust
after distribution to the Eligible Employees upon the expiry of the
trust period shall be used as funds for purchasing shares. However,
in the event the ESOP Trust is not extended upon the conclusion of
the trust period, the amount exceeding the trust expense reserve
shall be donated to an organization with no interest in the
participating companies.
- End -
(Reference)
[Outline of the Trust Agreement]
(i)
Trust type
A money trust other than an
individually-operated designated money trust
(third party benefit trust)
(ii)
Trust purpose
To provide incentives to eligible
employees
(iii)
Settlor
MUFG
(iv)
Trustee
Mitsubishi UFJ Trust and Banking
Corporation
(Co-trustee: The Master Trust Bank of
Japan, Ltd.)
(v)
Beneficiaries
Eligible employees satisfying the
beneficiary requirements
(vi)
Trust administrator
A third party that does not have any
interest in the Covered Companies (certified public accountant)
(vii)
Trust agreement date
May 2024 (planned)
(viii)
Trust period
From May 2024 (planned) to August 31, 2027
(planned)
(ix)
Start date
July 1, 2024 (planned)
(x)
Exercise of voting rights
No exercise
(xi)
Type of acquired shares
Ordinary shares of MUFG
(xii)
Amount of trust money
Unspecified (to be disclosed upon
resolution)
(xiii)
Timing of acquisition of
shares
Unspecified (to be disclosed upon
resolution)
(xiv)
Method of acquisition of
shares
Unspecified (to be disclosed upon
resolution)
(xv)
Holder of vested rights
MUFG
(xvi)
Residual assets
Residual assets that can be received by
MUFG, as the holder of the vested rights, shall be within the limit
of the trust expense reserve calculated by deducting the cost for
acquiring the shares from the Trust from the trust money.
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version on businesswire.com: https://www.businesswire.com/news/home/20240328186928/en/
MUFG Bank, Ltd. Toshinao Endou +81-3-3240-1111 Managing
Director, Head of Documentation & Corporate Secretary
Department Corporate Administration Division