Pizza Hut 2008 Annual Report Download - page 95

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(3) Represents amount of matching charitable contributions made on behalf of the director under the
Company’s matching gift program and/or the amount charitable contribution made in the director’s
name.
(4) Mr. Walter was elected to the Board in May 2008. The stock retainer and SAR award for 2008 shown
above represent his pro rata stock retainer of $67,500 and SAR award of $17,915 for his service from
May to November. In addition, he received a $25,000 stock award which is awarded to all new
directors upon joining the Board, but is not paid until they leave the Board. In November 2008, he
received the regular stock retainer of $135,000 and SAR award of $30,854 in consideration of his
service on the Board for 2009.
The Company uses a combination of cash and stock-based incentive compensation to attract and
retain qualified candidates to serve on the Board. In setting director compensation, the Company
considers the significant amount of time that directors expend in fulfilling their duties to the Company as
well as the skill level required by the Company of members of the Board. Board member compensation
was scheduled for review in 2008; however, the Compensation Committee and the full Board determined
that Board compensation increases would not be considered.
Employee Directors. Employee directors do not receive additional compensation for serving on the
Board of Directors.
Non-Employee Directors Annual Compensation. Each director who is not an employee of YUM
receives an annual stock grant retainer with a fair market value of $135,000 and an annual grant of vested
SARs to buy $125,000 worth of YUM common stock at a price equal to its fair market value on the date of
grant. Directors may elect to receive up to one-half of their stock retainer in cash. Directors may also defer
payment of their retainers pursuant to the Directors Deferred Compensation Plan. Deferrals are invested
in phantom Company stock and paid out in shares of Company stock. Deferrals may not be made for less
than two years. In recognition of the added duties of these chairs, the Chairperson of the Audit Committee
(Mr. Grissom in 2008) receives an additional $15,000 stock retainer annually and the Chairperson of the
Compensation Committee (Mr. Ryan in 2008) receives an additional $5,000 stock retainer annually.
Initial Stock Grant upon Joining Board. Non-employee directors also receive a one-time stock grant
Proxy Statement
with a fair market value of $25,000 on the date of grant upon joining the Board, distribution of which is
deferred until termination from the Board.
Stock Ownership Requirements. Similar to executive officers, directors are subject to share ownership
requirements. The directors’ requirements provide that directors will not sell any of the Company’s
common stock received as compensation for service on the Board until the director has ceased being a
member of the Board for one year.
Matching Gifts. To further YUM’s support for charities, non-employee directors are able to
participate in the YUM! Brands, Inc. Matching Gifts Program on the same terms as YUM’s employees.
Under this program, the YUM! Brands Foundation will match up to $10,000 a year in contributions by the
director to a charitable institution approved by the YUM! Brands Foundation. At its discretion, the
Foundation may match director contributions exceeding $10,000. In 2008, the Foundation matched $10,250
of Ms. Hill’s contributions.
Insurance. We also pay the premiums on directors’ and officers’ liability and business travel accident
insurance policies. The annual cost of this coverage is approximately $2.5 million. This is not included in
the tables above as it is not considered compensation to the directors.
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