Pizza Hut 2011 Annual Report Download - page 42

26MAR201222230252
16MAR201218540977
Total Shareholder Return
* Represents average performance of the top 25% of peer group for 10 year period.
•Ownership Guidelines. Our executives are subject to strong stock ownership guidelines and are
prohibited from hedging against the economic risk of such ownership. (page 52)
•No Employment Agreements. Our named executive officers do not have employment agreements or
guaranteed bonuses.
•Clawbacks. Our compensation recovery (‘‘clawback’’) policy gives our Board discretion to recover
Proxy Statement
incentive compensation paid to senior management in the event of a restatement of our financial
statements due to misconduct. (page 54)
Alternative Perspectives to be Rejected
There are organizations that have taken it upon themselves to measure the alignment between pay
and performance at our and other companies. Their purpose, of course, is laudable but their methodology
is flawed in several respects and indeed if adopted could undercut the effectiveness of the model created
here at YUM. Specifically, their methodology advocates the following:
1. A comparator group based largely on a rigid formula and includes companies which have little or
no relevance to YUM;
2. Lending no importance or relevance to the substantial and vital role of the franchising nature of
YUM in gauging the size and complexity of our business and, therefore, the talent we must
develop, attract and compete for and therefore, the appropriate comparator group;
3. That SARs/stock options are not performance-based pay and consequently that creating
shareholder value is not deemed to be ‘‘performance’’ a notion substantially out of sync with
practitioners and most investors; and
4. Giving consideration to pension increases that are driven by discount rate changes over which the
Company has no control.
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