Pizza Hut 2008 Annual Report Download - page 58

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YUM’s Compensation Philosophy
YUM’s compensation philosophy is reviewed annually by the Compensation Committee of the Board
(‘‘the Committee’’).
Our philosophy is to:
• reward performance and avoid entitlement
• pay our restaurant general managers and executives like owners
• design pay programs at all levels that align team and individual performance, customer satisfaction
and shareholder return
• emphasize long-term incentive compensation
• require executives to personally invest in Company stock
Objectives of YUM’s Compensation Program
The objectives of our executive compensation program are to:
• attract and retain highly qualified employees through competitive compensation and benefit
programs
• reward our employees for personal contributions that grow the business
• maximize shareholder returns
Key Elements of Compensation
The following table lists the key elements that generally comprise our 2008 executive compensation.
Element Purpose Form
Base Salary ............ Provide compensation for performance of Cash
primary roles and responsibilities
Proxy Statement
Performance-based annual
incentive compensation .... Provide incentive to drive company performance Cash
with payout based on achievement of YUM’s
short-term goals and other strategic objectives
Long-term incentive
compensation .......... Motivate our executives to help us achieve our Stock Appreciation
long-range performance goals that will enhance Rights/Stock Options
our value and, as a result, enhance the price of
our stock and our shareholders’ returns on their
investments
Retirement benefits ....... Provide tax-advantaged means to accumulate Defined Benefit Plan,
retirement benefits Defined Contribution
Plan
These elements have been in place since the Company’s inception in 1997. We determine all elements
of compensation annually at the same time, currently in January, to allow us to take into consideration all
of the elements when decisions are made.
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