Performance shares, restricted stock and share repurchases: capital markets trends after the introduction of the Japanese Corporate Governance Code

I. Corporate Governance Code
Since its introduction in 2015, the Japanese Corporate Governance Code (the ‘Code’) has been a significant factor in the number and type of corporate transactions undertaken by listed companies in Japan. The Code has been promoted by the Japanese government with the aim of improving the mid to long-term profitability and productivity of Japanese companies with a particular focus on Return on Equity (‘ROE’). One example of this kind of activity is the introduction of performance shares and restricted stock. Supplementary Principle 4.2.1 of the Code provides that:

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