Takeda Pharmaceutical : EXECUTIVE COMPENSATION OVERVIEW

Updated version as of June 29, 2022 due to the final Board approval on previously disclosed FY2022 STI and FY2022-2024 PSU awards KPIs

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 representing nine nationalities and located in three countries. 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 increases in long- term shareholder value 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

Beginning in Fiscal Year 2019, utilize a total shareholder return metric in the Performance Share Unit awards to align the payout with long-term stock performance and shareholder experience

Beginning in Fiscal Year 2019, established share retention policies

Conduct competitive benchmarking to ensure Internal Director (and executive team) compensation is aligned to market

Beginning in April 2020, employ a robust incentive recoupment (i.e., clawback) policy, further enhancing our ability to recoup compensation

Include caps on annual cash incentive and Performance Share Unit awards payouts

Align Internal Director and (executive team) short-term incentive and long-term incentive with company performance

Actively engage with our shareholders

Tie majority of Internal Director (and executive team) compensation to long-term performance

Engage independent compensation consultants

What We Don't Do

No automatic or guaranteed annual salary increases

No guaranteed bonuses or long-term incentive awards

No above median targeting of Internal Director compensation

TAKEDA'S EXECUTIVE COMPENSATION OVERVIEW

Takeda's Total Rewards Philosophy:

We achieve these objectives through a balanced 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.

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. It is important to note that the STI plan extends beyond the Internal Directors and Takeda Executive Team to over 31,000 employees globally, uniting leaders and plan participants with a common vision of delivering therapies for patients and value to shareholders.

Long-TermEquity Incentives ("LTI"): The greatest emphasis among the three components is placed on longer-term incentives, in order to focus and align our Internal Directors (and Takeda Executive Team) upon achievement of increased long-term shareholder value. 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).

The mix of compensation for our Internal Directors (and Takeda Executive Team) reflects Takeda's desire to link executive compensation with individual, executive group, and company performance. A substantial portion of the target pay for executives is performance-based. The annual 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).

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TAKEDA'S EXECUTIVE COMPENSATION OVERVIEW

FY 2021 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 more 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 75% 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, 75% of Mr. Weber's base salary and short-term incentives are payable from Takeda Pharmaceutical Company Limited. In addition, 100% of his long-term incentives are granted from Takeda Pharmaceutical Company Limited.

The second agreement, representing 25% 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, 25% of Mr. Weber's base salary and short-term incentives are payable from TPUSA. Furthermore, none of his LTI are granted from TPUSA.

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, etc. 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 individual Director's compensation is disclosed in the company's Annual Securities Report submitted after its General Meeting of Shareholders.

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TAKEDA'S EXECUTIVE COMPENSATION OVERVIEW

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 (who are not Audit and Supervisory Committee members). The Committee consists of four Independent External Directors. For the first half of Fiscal Year 2021, Compensation Advisory Partners and Pay Governance provided advice and assistance to the Committee in its review of compensation structure and strategy; in the latter half of the fiscal year, the Compensation Committee decided to engage a new compensation consultant and ultimately selected Semler Brossy as its primary advisor. During Fiscal Year 2021, the aforementioned consultants 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 externally disclosed the Compensation Committee Charter, which defines the Compensation Committee's roles and responsibilities, as a part of the Company's corporate governance documents on November 1, 2021.

Process of Determining Compensation

The level of compensation and the mix of compensation for Internal Directors are reviewed and established each year by the Committee. The process begins with a consideration of compensation levels and the mix of compensation 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 in each instance. Awards can be differentiated from the peer compensation levels based on each Internal Director's individual performance, experience, leadership, and contributions to Takeda's business and strategic performance.

The Committee also provides advice to the Board in determining the compensation of Board members who are not members of the Audit and Supervisory Committee.

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 compensation in reaction to the market data alone. The Fiscal Year 2021 Takeda Peer Group included the following companies:

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TAKEDA'S EXECUTIVE COMPENSATION OVERVIEW
	Fiscal Year 2021 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)
Johnson & Johnson (United States)		Merck & Co (United States)
Merck Group (Germany)		Novartis (Switzerland)
Pfizer (United States)		Roche (Switzerland)
Sanofi (France)

Compensation Advisory Partners conducted a review of the peer group and recommended that Johnson & Johnson be removed from the peer group for evaluating next year's (fiscal year 2022) compensation due to the revenue size exceeding the maximum of the range and the fact the a significant portion of its revenues are derived from non-pharmaceutical businesses, which are not comparable to Takeda; the Compensation Committee approved this change.

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. Takeda believes these KPIs enable the organization to focus on growth, profitability, pipeline performance, expense management and shareholder value creation. Furthermore, the KPIs determined by the Committee are consistent with Takeda's peer group.

The Committee and the Board reference the annual operating plan to establish performance targets and to assess the relative weighting for each KPI. Underlying KPIs reflect the understanding that divestitures and significant events will impact the evaluation of the respective KPI over the performance period and enables required adjustments.

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.

Adjustments to Key Performance Indicators

The KPIs upon which incentive compensation payouts are determined may be adjusted to eliminate the distorting effect of unusual income or expense items. The adjustments are intended to:

• align award payments with the underlying performance of the core business;

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