Notice of Revised Compensation Scheme for the Company's Executive Officers

TOKYO, May 25, 2022 - Mitsubishi Electric Corporation (TOKYO Prime Market: 6503) announced today that the Compensation Committee, at its meeting held on May 25, 2022, decided to revise the compensation scheme for the Company's Executive Officers and to apply the revised scheme from fiscal 2023, as follows:

1. Purpose of the Revision

The Company has introduced a performance-based compensation scheme, including stock compensation, for its Executive Officers to increase their awareness of the necessity to contribute to enhancing the medium- to long-term corporate value of the Group and to share that value with shareholders. However, we have decided to revise the entire compensation structure for our Executive Officers effective from the fiscal year 2023 to further clarify the roles and responsibilities of Directors and Executive Officers and to more rigorously evaluate their short-, medium-, and long-term incentive compensation based on the achievement level of the performance indices.

The key points of the new compensation scheme for the Company's Executive Officers are as follows:

-     Revised its compensation scheme to make it more performance-linked to implement and achieve the key indicators and priority measures outlined in the Medium-Term Management Plan.

-     In addition to rigorously evaluating the achievement of the performance indices in the business units in charge, greater emphasis on incentive compensation to reflect performance indices in non-financial matters, such as restoring public trust, improving employee engagement, and sustainability and ESG-related progresses.

-     Revised the stock compensation portion of the compensation scheme and established new stock ownership guidelines to strengthen incentives to sustainably increase corporate value and shareholder value over the medium- to long-term.

-     Improved compensation governance by introducing malus and clawback provisions.

2. Outline of Compensation Scheme for Executive Officers

(1) Compensation levels and structure

The compensation levels and structure shall be established by selecting a group of major Japanese manufacturing companies that are similar to the Company in terms of size, business type, global expansion, etc. as the compensation benchmark companies and by considering the trends in compensation levels at the benchmark companies, our management strategy and business environment, the objectives of incentive compensation and the degree of difficulty in achieving the targets, the roles and responsibilities of the Executive Officers concerned, and other relevant factors. In addition, to ensure that compensation, etc. focuses on improving corporate and shareholder value over the medium to long term, the following compensation structure shall be adopted.

Please refer to Figure1 in the attached

http://www.rns-pdf.londonstockexchange.com/rns/5506N_1-2022-6-1.pdf

(i) Basic compensation

Fixed compensation is set in accordance with the roles and responsibilities of each Executive Officer and is paid monthly in cash by dividing the position-based annual standard amount by 12.

(ii) Performance-based bonus

The bonus payment shall be determined by "Corporate Performance Evaluation" and "Individual Evaluation." The payment amount will fluctuate in the range of 0% to 200% depending on the evaluation results. The amount to be paid to each individual shall be calculated as below and paid in a lump sum in cash after the end of each fiscal year.

■Evaluation Indicators, Ratios, and Targets for FY2022

Please refer to Figure2 in the attached

http://www.rns-pdf.londonstockexchange.com/rns/5506N_1-2022-6-1.pdf

■Determination of individual evaluation coefficients

The targets for the President and CEO shall be determined through the deliberation of the Compensation Committee at the beginning of the fiscal year. Evaluations shall be made after the end of the fiscal year, by deliberation and decision by the Compensation Committee following a self-evaluation by the President and CEO.

Goals and evaluations of other Executive Officers are discussed and approved by the Compensation Committee after a meeting between the President and CEO and each Executive Officer.

(iii) Performance-based stock compensation (Performance Share Units (PSU))

In principle, the number of shares to be issued as performance-based stock compensation (PSU) varies between 0% and 200%, depending on the comparison result (in percentile) between the Company's TSR (total shareholder return) for the three years and the TSR of a pre-selected group of comparable companies. The comparable companies are selected from domestic and overseas companies in the business areas in which the Company operates. The number of shares to be delivered to each individual is calculated as follows:

Please refer to Figure3 in the attached

http://www.rns-pdf.londonstockexchange.com/rns/5506N_1-2022-6-1.pdf

(iv) Restricted Stock Units (RSU)

In order to promote continuous shareholding and shareholder value during the term of office, the Restricted Stock Unit (RSU) program shall, in principle, deliver shares, with transfer restrictions, equivalent to the standard amount for the position at the end of each fiscal year. The transfer restrictions shall be lifted at retirement (when the Company's Director or Executive Officer retires from his/her position).

(2) Stock ownership guidelines

We believe it is important to ensure that our Executive Officers share the same value with our shareholders on a long-term and sustainable basis. To this end, we have established the following stock ownership guidelines and require Executive Officers to continuously hold the Company's stock during their term of office, even after the target amount has been reached.

 [Stock Ownership Guidelines]

Targeted holdings to be achieved within four years of assuming the position

(3) Malus and clawback provisions

The Company shall introduce "malus and clawback provisions" so that, in the event of any material misconduct or violation by an Executive Officer, or in the event of any material revision to the financial results of prior fiscal years, the Compensation Committee may, by resolution, demand that such Executive Officer forfeit his/her right to receive incentive compensation (malus) or return his/her paid compensation (clawback). The compensation that may be subject to these provisions shall be performance-based bonuses to be paid or already paid, points granted before the delivery of shares and shares before the lifting of transfer restrictions, and some or all of the shares already delivered.

http://www.rns-pdf.londonstockexchange.com/rns/5506N_2-2022-6-1.pdf

###

About Mitsubishi Electric Corporation

With more than 100 years of experience in providing reliable, high-quality products, Mitsubishi Electric Corporation (TOKYO: 6503) is a recognized world leader in the manufacture, marketing and sales of electrical and electronic equipment used in information processing and communications, space development and satellite communications, consumer electronics, industrial technology, energy, transportation and building equipment. Mitsubishi Electric enriches society with technology in the spirit of its "Changes for the Better." The company recorded a revenue of 4,476.7 billion yen (U.S.$ 36.7 billion*) in the fiscal year ended March 31, 2022. For more information, please visit www.MitsubishiElectric.com

*U.S. dollar amounts are translated from yen at the rate of ¥ 122=U.S.$1, the approximate rate on the Tokyo Foreign Exchange Market on March 31, 2022