Pizza Hut 2008 Annual Report Download - page 44

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program at this time. We will, however, always seek the ideas and input of our shareholders on this
important matter.
Above all, the Board, as fiduciaries for the shareholders, believes that an advisory vote on executive
compensation is simply not in the best interests of YUM’s shareholders. The Board is not aware of any
competitor who has adopted the advisory vote, and we understand that similar proposals were defeated at
the vast majority of companies where they were proposed last year. Implementing an advisory vote at
YUM—but not at our competitors—could create the impression among our executives that their
compensation opportunities could be limited or negatively affected, while those opportunities would not be
so limited at our competitors. Thus, the advisory vote could put us at a competitive disadvantage in
attracting and retaining executive talent, and that would ultimately harm our business and negatively affect
our shareholders. Until a consensus has been formed on the advisory vote or federal legislation relating to
the topic is enacted, implementation of this proposal is premature and potentially harmful as the advisory
vote on executive compensation would not be applied uniformly.
We also note that a similar proposal was submitted at our last two Annual Meetings. We opposed the
proposal each year, and a significant majority of shareholders voted against the proposal both times.
After careful consideration of the proposal, studying the pros and cons of the advisory vote and
discussions with shareholders, the Board of Directors does not believe the proposal would be in the best
interest of YUM or our shareholders.
FOR THESE REASONS, WE RECOMMEND THAT YOU VOTE AGAINST THIS PROPOSAL.
What vote is required to approve this proposal?
Approval of this proposal requires the affirmative vote of a majority of the shares present in person or
represented by proxy and entitled to vote at the Annual Meeting.
Proxy Statement
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