Pizza Hut 2009 Annual Report Download - page 60

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to our security department and that incremental cost is reflected in the ‘‘Other’’ column of the All Other
Compensation Table.
In the case of Mr. Su, he receives several perquisites related to his overseas assignment. These
perquisites were part of his original compensation package and the Committee has elected to continue to
provide them. The amount of these perquisites is reported on page 48. Mr. Su’s agreement provides that
the following will be provided: annual foreign service premium; local social club dues; car; housing,
commodities, and utilities allowances; tax preparation services, tax equalization to the United States for
salary and bonus; and tax equalization to Hong Kong (up to a maximum of $5 million) with respect to
income attributable to certain stock option and SAR exercises and to distributions of deferred income.
When Mr. Su retires from the Company, he will be required to reimburse the Company for the tax
reimbursements for certain stock option and SARs exercises, if any, made within six months of his
retirement.
Review of Total Compensation
We intend to continue our strategy of compensating our executives through programs that emphasize
performance-based compensation. To that end, executive compensation through annual incentives and
stock appreciation rights/stock option grants is tied directly to our performance and is structured to ensure
that there is an appropriate balance between our financial performance and shareholder return. The
Committee reviewed each element of compensation and believes that the compensation was reasonable in
its totality. In addition, the Committee believes that various elements of this program effectively achieve
the objective of aligning compensation with performance measures that are directly related to the
Company’s financial goals and creation of shareholder value without encouraging executives to take
unnecessary and excessive risks.
Before finalizing compensation actions, the Committee took into consideration all elements of
compensation accruing to each NEO in 2009. These elements included salary, annual incentive award,
long-term incentive awards, value of outstanding equity awards (vested and unvested), and lump sum value
of pension at retirement and gains realized from exercising stock options. The Committee will continue to
review total compensation at least once a year.
YUM’s Executive Stock Ownership Guidelines
Proxy Statement
The Committee has established stock ownership guidelines for our top 600 employees. Our Chief
Executive Officer is required to own 336,000 shares of YUM stock or stock equivalents (approximately
eight times his base salary). Executive officers (other than Mr. Novak) are expected to attain their
ownership targets, equivalent in value to two to three times their current annual base salary depending
upon their positions, within five years from the time the established targets become applicable. If an
executive does not meet his or her ownership guideline, he or she is not eligible for a grant under the LTI
Plan. In 2009, all executive officers and all other employees subject to guidelines met or exceeded their
ownership guidelines.
Ownership Shares Value of Shares Owned as
Guidelines Owned(1) Shares(2) Multiple of Salary
Novak 336,000 2,354,836 $82,348,615 59
Carucci 50,000 147,950 $ 5,173,812 7
Allan 50,000 597,738 $20,902,898 26
Su 50,000 401,634 $14,045,141 17
Creed 50,000 109,393 $ 3,825,473 6
(1) Calculated as of December 31, 2009 and represents shares owned outright by the NEO and RSUs
acquired under the Company’s executive income deferral program.
(2) Based on YUM closing stock price of $34.97 as of December 31, 2009.
Under our Code of Conduct, speculative trading in YUM stock, including trading in puts, calls or
other hedging or monetization transactions, is prohibited.
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