Pizza Hut 2010 Annual Report Download - page 57

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Companies included in the Peer Group
For the benchmarking done in late 2009 (used for early 2010 pay decisions), the peer group for all
NEOs was made up of retail, hospitality and nondurable consumer product companies. The Committee
established this peer group for the CEO and other NEO compensation in 2008. Periodically the
Committee, with Meridian’s assistance, reviews the composition of the peer group to ensure the companies
are relevant for comparative purposes. The Committee deleted two companies for 2010. We believe the
current group of companies is reflective of the market in which we operate for executive talent. The group
was chosen because of each of the company’s relative leadership positions in their sector, relative size as
measured by revenues, relative complexity of the business, and in some cases because of their global reach.
The companies deleted from the survey group represented companies whose data was not as readily
available, that had been acquired or that were no longer a good match for the group. The companies
comprising this nondurable consumer products group used for the benchmarking done at the end of 2009
were:
2008 Sales/ 2008 Sales/
Revenues Revenues
Company Name ($billions) Company Name ($billions)
Walgreen Co. .................. 66.3 Marriott International, Inc. ........ 12.9
Lowe’s Companies, Inc. ........... 48.2 Kellogg Company ............... 12.8
PepsiCo, Inc. .................. 43.3 Avon Products, Inc. ............. 10.7
Kraft Foods, Inc. ............... 42.2 OfficeMax Incorporated ........... 8.3
The Coca-Cola Company .......... 31.9 Campbell Soup Company .......... 7.6
Macy’s, Inc. ................... 24.9 Darden Restaurants, Inc. .......... 7.2
McDonald’s Corporation .......... 23.5 AutoZone, Inc. ................. 6.5
Starwood Hotels & ResortsStaples, Inc. ................... 23.1
Worldwide, Inc. ............... 5.9Kimberly-Clark Corporation ........ 19.4
Mattel Corporation .............. 5.9J. C. Penney Company, Inc. ........ 18.5
The Hershey Company ........... 5.1Kohl’s Corporation .............. 16.4
Mars, Incorporated(1) ............ N/AColgate-Palmolive Company ........ 15.3
Median ....................... 15.3General Mills, Inc. .............. 14.7
YUM(2) ...................... 16.3
Proxy Statement
The Gap, Inc. .................. 14.5
(1) Data not publicly available
(2) Projected 2009 company sales + 25% of franchisee and licensee sales
Targeting Compensation
For the NEOs, other than our CEO, we target the elements of our compensation program as follows:
• Base salary—because NEOs are expected to make significant contributions in current and future
positions and would be considered a critical loss if they left the Company, we target the 75th
percentile for base salary
• Performance-based annual incentive compensation—75th percentile to emphasize superior pay for
superior performance
• Long-term incentives—50th percentile
For the CEO, the Committee targets 75th percentile for salary and target total cash compensation as
well as 75th percentile for target total compensation. These benchmark values are based on target annual
incentives and the grant date fair value of long-term incentives.
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