Pizza Hut 2012 Annual Report Download - page 28

YUM! BRANDS, INC.-2013Proxy Statement10
Proxy Statement
GOVERNANCE OF THE COMPANY
• Compensation performance measures are set for each division,
are transparent and are tied to multiple measurable factors, none
of which exceeds a 50% weighting. The measures are both
apparent to shareholders and drivers of their returns.
• Strong stock ownership guidelines for approximately 600 senior
employees are enforced (discussed further at page 41 ).
• We have implemented a compensation recovery or “clawback”
policy (discussed further at page 43 ).
How does the Board determine which directors are considered independent?
The Company’s Corporate Governance Principles, adopted by the
Board, require that we meet the listing standards of the NYSE. The
full text of the Principles can be found on the Company’s website
(www.yum.com/investors/governance/principles.asp).
Pursuant to the Principles, the Board undertook its annual review
of director independence. During this review, the Board considered
transactions and relationships between each director or any
member of his or her immediate family and the Company and its
subsidiaries and affi liates. As provided in the Principles, the purpose
of this review was to determine whether any such relationships
or transactions were inconsistent with a determination that the
director is independent.
As a result of this review, the Board affi rmatively determined
that all of the directors are independent of the Company and its
management under NYSE rules, with the exception of David C.
Novak, Jing-ShyhS. Su and Michael J. Cavanagh. Mr.Novak and
Mr.Su are not considered independent directors because of their
employment by the Company. Under NYSE rules, Mr.Cavanagh
is not considered independent until May 2015 because Mr.Novak
formerly served on the Compensation Committee of JPMorgan
Chase & Co., where Mr.Cavanagh is an executive offi cer .
In determining that the other directors did not have a material
relationship with the Company, the Board determined that
Messrs.Dorman, Ferragamo, Grissom, Linen, Nelson, Ryan and
Walter and Mses. Graddick-Weir and Hill had no other relationship
with the Company other than their relationship as a director.
How do shareholders communicate with the Board?
Shareholders and other parties interested in communicating
directly with individual directors, the non-management directors
as a group or the entire Board may do so by writing to the
Nominating and Governance Committee, c/o Corporate Secretary,
YUM!Brands,Inc., 1441Gardiner Lane, Louisville, Kentucky
40213. The Nominating and Governance Committee of the
Board has approved a process for handling letters received
by the Company and addressed to individual directors, non-
management members of the Board or the Board. Under that
process, the Corporate Secretary of the Company reviews all
such correspondence and regularly forwards to a designated
individual member of the Nominating and Governance Committee
copies of all such correspondence (although we do not forward
commercial correspondence and correspondence duplicative in
nature; however, we will retain duplicate correspondence and all
duplicate correspondence will be available for directors’ review
upon their request) and a summary of all such correspondence.
The designated director of the Nominating and Governance
Committee will forward correspondence directed to individual
directors as he or she deems appropriate. Directors may at any
time review a log of all correspondence received by the Company
that is addressed to members of the Board and request copies
of any such correspondence. Written correspondence from
shareholders relating to accounting, internal controls or auditing
matters are immediately brought to the attention of the Company’s
Audit Committee Chair and to the internal audit department and
handled in accordance with procedures established by the Audit
Committee with respect to such matters (described below).
Correspondence from shareholders relating to Management
Planning and Development Committee matters are referred to the
Chair of the Management Planning and Development Committee.
What are the Company’s p olicies on r eporting of c oncerns r egarding a ccounting?
The Audit Committee has established policies on reporting concerns
regarding accounting and other matters in addition to our policy
on communicating with our non-management directors. Any
person, whether or not an employee, who has a concern about
the conduct of the Company or any of our people, with respect
to accounting, internal accounting controls or auditing matters,
may, in a confi dential or anonymous manner, communicate that
concern to our General Counsel, Christian Campbell. If any
person believes that he or she should communicate with our
Audit Committee Chair, Thomas C. Nelson, he or she may do
so by writing him at c/o YUM!Brands,Inc., 1441Gardiner Lane,
Louisville, KY 40213. In addition, a person who has such a concern
about the conduct of the Company or any of our employees may
discuss that concern on a confi dential or anonymous basis by
contacting The Network at 1(800)241-5689. The Network is our
designated external contact for these issues and is authorized
to contact the appropriate members of management and/or the
Board of Directors with respect to all concerns it receives. The full
text of our Policy on Reporting of Concerns Regarding Accounting
and Other Matters is available on our website at www.yum.com/
investors/governance/complaint.asp.