Pizza Hut 2011 Annual Report Download - page 62

16MAR201218540977
experience, individual performance and future potential. Specific salary increases take into account these
factors and the current market for management talent. The Committee reviews each NEO’s salary and
performance annually. Based on the Committee’s review in January 2011, the Committee set base salaries
for 2011 for all NEOs. Mr. Carucci received a base salary increase of $60,000; Mr. Su received a base salary
increase of $150,000; Mr. Allan received a base salary increase of $45,000; and Mr. Pant received an
increase of $25,000 in February 2011.
Mr. Pant also received a base salary increase of $125,000 in December 2011 related to his promotion
to Chief Executive Officer of YRI.
Mr. Novak’s salary is discussed below.
The Committee, as part of its annual review of salaries, reviews market data for the peer group. As in
prior years, the Committee did not focus on a precise percentile ranking of each NEO’s salary; however,
they noted the following general relationships:
• Messrs. Su’s, Allan’s and Pant’s 2011 salary increases placed their base salaries significantly above
the 75th percentile. The Committee chose to continue to pay these three executives at this level
based on the Committee’s subjective assessment of the current and sustained, long-term results they
have produced for the Company and the importance of their leadership in running the China and
YRI divisions, respectively.
• Mr. Carucci’s salary increase placed his salary at the 75th percentile.
As explained in last year’s proxy statement and at page 51, beginning in 2011 Mr. Su ceased receiving
several perquisites that were provided as part of his overseas assignment. In consideration for no longer
receiving these perquisites, the Committee increased Mr. Su’s salary by $35,000. In addition,
Messrs. Carucci, Allan and Pant’s salaries were each increased by $25,000 in addition to their 2011 merit
increase in consideration for no longer receiving a car allowance, country club membership, perquisite
allowance and annual physical.
Performance-Based Annual Bonus Compensation
Proxy Statement
Our performance-based annual bonus program (‘‘YUM Leaders’ Bonus Program’’) is a cash-based,
pay-for-performance plan that applies to all above-restaurant leaders in the Company. The principal
purpose of the YUM Leaders’ Bonus Program is to encourage and reward strong individual and team
performance that drives shareholder value.
Annual bonus payments are based on the achievement of certain Company-wide and/or division
financial objectives, other strategic objectives, as well as the achievement of individual performance
objectives. These objectives are established, reviewed and approved by the Committee, and reviewed with
the Board, during the compensation planning period to ensure that the goals are in concert with the
unique strategic issues facing the Company.
Incentive opportunities are designed to reward superior performance by providing for payments above
target for superior performance, but correspondingly no payment unless a threshold percentage of the goal
is achieved. Each NEO’s annual bonus depends on the degree to which the Company achieves its business
and financial goals and the degree to which each NEO meets his individual goals. We believe this aligns
our NEOs’ interests with the Company’s interests, and motivates our NEOs to meet their goals and ensure
that the Company meets its financial, operational and strategic objectives.
The formula for our annual bonus is as follows:
Base Salary ǂAnnual Target Bonus ǂTeam ǂIndividual = Bonus Payout
Percentage Performance Factor Performance Factor
44