Takeda’s executive compensation overview

Better Health, Brighter Future

TAKEDA'S EXECUTIVE COMPENSATION OVERVIEW

Takeda's executive compensation structure reflects our position as a patient-focused,values-based, R&D- driven global biopharmaceutical company. We have an experienced and diverse Takeda Executive Team (the "TET") representing nine nationalities and located in three countries, which includes four members of our Board of Directors (the "Internal Directors"). Our executive compensation programs are designed to be globally competitive and performance-oriented, while also considering local market factors.

COMPENSATION PAY FOR PERFORMANCE PHILOSOPHY AND OBJECTIVES

Our executive compensation strategy is designed to closely link pay with performance and long-term shareholder value creation while minimizing excessive risk-taking. To help us accomplish these important objectives, we have adopted the following policies and practices over time:

What We Do

We conduct competitive benchmarking to ensure executive compensation is aligned with market practices and standards

We align short- and long-term incentives with company performance

We tie the majority of the TET compensation to long-term performance

We utilize a total shareholder return metric in the long-term incentive compensation to further align with long-term stock performance and shareholder interests

We include caps on short-term incentive and Performance Share Unit awards payouts

We have adopted share retention policies

We have adopted a robust incentive recoupment (i.e., clawback) policy, further enhancing our compensation governance standards

We engage independent compensation consultants

We actively engage with our shareholders

What We Don't Do

We do not have automatic or guaranteed annual salary increases

We do not have guaranteed bonuses or long-term incentive awards

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TAKEDA'S EXECUTIVE COMPENSATION OVERVIEW

Takeda's Total Rewards Philosophy:

COMPONENTS OF THE COMPENSATION PROGRAM

We achieve these objectives through a combination of the following three primary components of our executive compensation structure:

Base Salary: A fixed cash compensation amount that is competitive within the markets in which we compete for talent. The Company provides appropriate levels of base salary to ensure that Takeda can attract and retain a global leadership team that will continue to meet our commitments to customers and patients and sustain long-term profitable growth for our shareholders and lead and grow the scale, size, and complexity of the business. Base salary is established for each of the TET members relative to his or her market benchmarking based on their respective performance (including ESG individual objectives), experience, unique skills, internal equity with others at Takeda, and the Company's operating budget.

Short-TermIncentive ("STI"): An annual cash bonus opportunity with payout levels based on degree of achievement of pre-established annual performance goals. The STI plan is designed to focus the entire team on shared annual company performance goals and specific group goals. The STI program was structured in this manner so that program participants have a clear line of sight to both company and division results, aligned with Takeda's annual operating goals, in order to create value for our shareholders. STI target amounts for participants are set as a percentage of base salary. It is important to note that the STI plan extends beyond the TET to over 30,000 employees globally, uniting leaders and plan participants with a common vision of delivering therapies for patients and value to shareholders.

Long-TermIncentives ("LTI"): The greatest emphasis among the three components is placed on longer-term incentives, in order to focus and align our TET on the achievement of long-term shareholder value creation. LTI compensation takes two forms: Performance Share Unit awards (subject to performance based vesting requirements) ("PSU" awards) and Restricted Stock Unit awards (subject to service-based vesting requirements) ("RSU" awards). In Fiscal Year 2022, 60% of the LTI program is delivered in PSU awards and 40% in RSU awards.

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TAKEDA'S EXECUTIVE COMPENSATION OVERVIEW

The mix of compensation for our TET reflects Takeda's desire to link executive compensation with individual, group, and company performance. A substantial portion of the target pay for executives is performance-based. The STI and LTI PSU awards payouts are contingent upon company performance, with the STI factoring in performance over a one-year period, and LTI PSU awards compensation factoring in performance over a three-year period (as described below).

FY 2022 CEO Pay Mix:

The chart below depicts the annualized mix of target compensation for Takeda's CEO:

10%

16%

74%

Base		STI		LTI

CEO Contractual Agreements

Effective September 2020, Takeda updated the contractual arrangements for Christophe Weber to appropriately reflect his approximate work allocation between the Company's offices in Japan and the United States. As it was anticipated that Mr. Weber will continue to spend considerable time in the United States with the Company's global team presence in the Boston area, the Company entered into two separate agreements with Mr. Weber.

The first agreement, representing 70% (updated from 75% to 70% in 2022 to align closer to his work allocation between the Company's offices in Japan and the United States) of Mr. Weber's work allocation in Japan, is a Mandate Agreement made between Takeda Pharmaceutical Company Limited and Mr. Weber, that describes the terms and compensation arrangements for his role as Representative Director and Chief Executive Officer of the Company. Under this Mandate agreement, 70% of Mr. Weber's base salary and short-term incentives are payable from Takeda Pharmaceutical Company Limited. Currently 100% of his long-term incentives are granted from Takeda Pharmaceutical Company Limited.

The second agreement, representing 30% (updated from 25% to 30% in 2022 to align closer to his work allocation between the Company's offices in Japan and the United States) of Mr. Weber's work allocation in the United States, is an Employment Agreement made between Takeda Pharmaceutical U.S.A. Inc. ("TPUSA") and Mr. Weber, that describes the terms and compensation arrangements for his role as Head of Global Business of TPUSA. Under this employment agreement, 30% of Mr. Weber's base salary and short- term incentives are payable from TPUSA. Currently none of his LTI is granted from TPUSA.

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TAKEDA'S EXECUTIVE COMPENSATION OVERVIEW

These agreements were designed to split the compensation for Mr. Weber according to his work allocation and were not intended to increase any portion of his compensation. Accordingly, the total amount of compensation paid to Mr. Weber from the Company and Takeda group companies did not increase due to his concurrent duties of Head of Global Business of TPUSA, and the Compensation Committee reviewed and confirmed the entire amount provided under both agreements. The total amount of each Individual Director's compensation is disclosed in the Company's Annual Securities Report submitted after its General Meeting of Shareholders.

COMPENSATION PROGRAM OVERSIGHT

Role of the Compensation Committee

The Board of Directors (the "Board") has delegated to the Compensation Committee (the "Committee") (an advisory committee of the Board) the authority to determine compensation for Internal Directors. The Committee consists of four independent External Directors. For Fiscal Year 2022, the Committee continued to utilize Semler Brossy as its primary compensation consultant. Semler Brossy, which is retained directly by the Committee and does not have any other engagements with the Company, attended select meetings at the invitation of the Committee, assisted the Committee with analyzing competitive peer company market data and relevant information relating to the Company's compensation programs, and reported to the Committee regarding market trends and technical developments. In addition, members of our management team keep abreast of developments in compensation matters and participate in the gathering and presentation of data related to these matters as requested by the Committee. In order to enhance transparency of the Company's corporate governance, the Company has externally disclosed the Compensation Committee Charter, which defines the Committee's roles and responsibilities, as a part of the Company's corporate governance documents.

Compensation Determination

The level and the mix of compensation for Internal Directors are reviewed and established each year by the Committee. The process begins with consideration of compensation levels, and compensation mix, for comparable executives at companies in Takeda's Fiscal Year Peer Group (see below). After this benchmark review, the Committee establishes Internal Director compensation - base salary adjustments, annual short- term incentive, and long-term incentive awards - relative to the peer median. Awards can be differentiated from peer compensation levels based on each Internal Director's individual performance, experience, leadership, and contributions to Takeda's business and strategic performance. The remaining TET members participate in the same compensation programs as the Internal Directors, and their compensation level and mix are set by our CEO in a manner that is generally consistent with the framework established by the Compensation Committee for Internal Directors.

Comparative Framework

Individual compensation levels and opportunities are compared to a peer group of global pharmaceutical companies approved by the Committee and the Board to ensure our compensation programs and levels are competitive to attract and retain key talent in the global pharmaceutical market. Although the Committee considers the compensation practices of peer companies, it does not make any determinations or changes in

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TAKEDA'S EXECUTIVE COMPENSATION OVERVIEW

compensation in reaction to the market data alone. The Fiscal Year 2022 Takeda Peer Group included the following companies:

	Fiscal Year 2022 Takeda Peer Group
AbbVie (United States)		Amgen (United States)
Astellas (Japan)		AstraZeneca (United Kingdom)
Bristol Myers Squibb (United States)		Eli Lilly (United States)
Gilead Sciences (United States)		GlaxoSmithKline (United Kingdom)
Merck & Co (United States)		Merck Group (Germany)
Novartis (Switzerland)		Pfizer (United States)
Roche (Switzerland)		Sanofi (France)

The Takeda Fiscal Year 2023 Peer Group will remain the same as the Takeda Fiscal Year 2022 Peer Group.

Key Performance Indicator Determination

Each year, the Committee and the Board review and establish the annual Key Performance Indicators ("KPI") used for the STI plan and for the LTI PSU awards. The KPIs included in the STI and LTI PSU awards were carefully evaluated by the Committee before being approved by the Board. Each KPI has been set in order to align the short- and long-term strategies with shareholder returns, while also promoting the retention of critical global executive talent. Takeda believes these KPIs enable the organization to focus on growth, profitability, pipeline performance, expense management and shareholder value creation.

Furthermore, consistent with Takeda's peer group practices, the Committee and the Board may select KPIs based on certain financial measures that are adjusted from Takeda's reported, IFRS financial measures to focus on Takeda's core business strategies and operations. Additional information about Takeda's non-IFRS measures, including Core financial measures, is set forth in the financial appendix at the end of Takeda's fourth quarter FY2022 investor presentation (available on Takeda's website at: https://www.takeda.com/investors/financial-results/quarterly-results/).

The Committee and the Board reference Takeda's annual operating plan to establish performance targets and to assess the relative weighting for each KPI.

Both the STI and the LTI plans are designed in a way that allows participants to be rewarded for delivering strong results for shareholders if Takeda exceeds the plan targets. Conversely, if Takeda does not achieve targets, participants will receive a below target payout. If performance is below threshold, participants receive a 0% payout for that KPI. The maximum payout participants can receive under the plans is 200% of target payout.

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