Pizza Hut 2011 Annual Report Download - page 70

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YUM’s Executive Stock Ownership Guidelines
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
thirteen times his base salary at the end of fiscal 2011). NEOs (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 NEO or other employee does not meet his or her ownership guideline, he or she is not eligible for a
grant under the LTI Plan. In 2011, all NEOs and all other employees subject to guidelines met or exceeded
their ownership guidelines.
Value of Shares
Ownership Shares Value of Owned as
Guidelines Owned(1) Shares(2) Multiple of Salary
Novak 336,000 2,438,820 $143,914,768 99
Carucci 50,000 155,177 $ 9,156,995 11
Su 50,000 389,201 $ 22,966,751 23
Allan 50,000 733,153 $ 43,263,359 49
Pant 50,000 98,681 $ 5,823,164 8
(1) Calculated as of December 31, 2011 and represents shares owned outright by the NEO and vested
RSUs acquired under the Company’s executive income deferral program.
(2) Based on YUM closing stock price of $59.01 as of December 31, 2011.
Under our Code of Conduct, speculative trading in YUM stock, including trading in puts, calls or
other hedging or monetization transactions, is prohibited.
YUM’s Stock Option and SARs Granting Practices
Historically, we have awarded non-qualified stock option and stock appreciation rights grants annually
at the Committee’s January meeting. This meeting date is set by the Board of Directors more than
Proxy Statement
six months prior to the actual meeting. Beginning with the 2008 grant, the Committee set the annual grant
date as the second business day after our fourth-quarter earnings release. We do not backdate or make
grants retroactively. In addition, we do not time such grants in coordination with our possession or release
of material, non-public or other information.
We make grants at the same time other elements of annual compensation are determined so that we
can consider all elements of compensation in making the grants. Pursuant to the terms of our LTI Plan, the
exercise price is set as the closing price on the date of grant. We make these grants to NEOs at the same
time they are granted to the other approximately 600 above-restaurant leaders of our Company who are
eligible for stock option and stock appreciation rights grants.
Management recommends the awards to be made pursuant to our LTI Plan to the Committee. While
the Committee gives significant weight to management recommendations concerning grants to NEOs
(other than the CEO), the Committee makes the determination whether and to whom to issue grants and
determines the amount of the grant. The Board of Directors has delegated to Mr. Novak and Anne
Byerlein, our Chief People Officer, the ability to make grants to employees who are not executive officers
and whose grant is less than approximately 17,000 options or stock appreciation rights annually. In the case
of these grants, the Committee sets all the terms of each award, except the actual number of stock
appreciation rights or options, which are determined by Mr. Novak and Ms. Byerlein pursuant to
guidelines approved by the Committee in January of each year.
Grants may also be made on other dates that the Board of Directors meets. These grants generally are
Chairman’s Awards, which are made in recognition of superlative performance and extraordinary impact
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