Pizza Hut 2009 Annual Report Download - page 84

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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 Management Planning and Development 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 with respect to $125,000 worth of YUM common stock with an exercise price equal to the fair
market value of Company stock on the date of grant. (Prior to 2006, directors received an annual grant of
vested stock options.) 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 2009) receives an additional $15,000 stock retainer
annually and the Chairperson of the Management Planning and Development Committee (Mr. Ryan in
2009) receives an additional $5,000 stock retainer annually.
Initial Stock Grant upon Joining Board. Non-employee directors also receive a one-time stock grant
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
Proxy Statement
director to a charitable institution approved by the YUM! Brands Foundation. At its discretion, the
Foundation may match director contributions exceeding $10,000.
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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