Pizza Hut 2008 Annual Report Download - page 57

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23MAR200920295069
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
YUM delivered strong performance in a challenging consumer environment in 2008. Our 2008 results
again exceeded our annual target of at least 10% EPS growth and represent our seventh straight year of at
least 13% growth. In 2008 we also delivered strong results on the three key measures that drive long-term
shareholder value. First, we delivered worldwide system same-store-sales growth of 3%, which marks our
8th straight year of worldwide system same-store-sales growth. Second, we opened a record 1,495 units
internationally, remaining the leading developer of new units outside the U.S. Third, we reinforced our
position as an industry leader in return on invested capital by increasing our return on invested capital to
20%.
As in past years, the compensation of our executives reflects the Company’s performance. We
designed our executive compensation program to attract, reward and retain the talented leaders necessary
to enable our Company to succeed in the highly competitive market for talent, while maximizing
shareholder returns. We believe that our management team, which has been attracted, rewarded and
retained through our compensation program, has been a key driver in YUM’s strong performance over
both the long and short term.
In this Compensation Discussion & Analysis, we discuss our executive compensation program and
how it worked in 2008. Among other topics, we address the following:
• The philosophy underlying our executive compensation program (page 40)
• The objectives of our executive compensation program (page 40)
• An overview of the key elements of our executive compensation program (page 40)
• The process the compensation committee uses to set and review executive compensation (page 41)
• The alignment of our executive compensation with the Company’s business and financial
performance (page 41)
• The allocation between fixed and variable compensation (page 41)
Proxy Statement
• The role of our independent compensation consultant (page 41)
• The role of comparative compensation data and how we select the companies that are used to
generate the comparative data (page 42)
• Team performance measures, which are used in the calculation of the annual bonus (page 45)
• Individual performance measures, which are also used in the calculation of the annual bonus
(page 47)
• Our CEO’s compensation (page 49)
• Our stock ownership guidelines (page 54)
Our Named Executive Officers (NEOs) for 2008:
• David C. Novak, Chairman, Chief Executive Officer and President
• Richard T. Carucci, Chief Financial Officer
• Jing-Shyh S. Su, President—China Division and Vice Chairman
• Graham D. Allan, President—Yum Restaurants International Division
• Greg Creed, President and Chief Concept Officer—Taco Bell Division U.S.
39