Pizza Hut 2012 Annual Report Download - page 30

YUM! BRANDS, INC.-2013Proxy Statement12
Proxy Statement
GOVERNANCE OF THE COMPANY
How are directors compensated?
Employee Directors. Employee directors do not receive additional compensation for serving on the Board of Directors.
Non-Employee Directors Annual Compensation. The annual compensation for each director who is not an employee of YUM is discussed
under “Director Compensation” beginning on page 58 .
What are the Company’s policies and procedures with respect to
related person transactions?
The Board of Directors has adopted policies and procedures for
the review of related person transactions.
Under these policies and procedures, the Nominating and
Governance Committee reviews related person transactions in
which we are or will be a participant to determine if they are in the
best interests of our shareholders and the Company. Transactions,
arrangements, or relationships or any series of similar transactions,
arrangements or relationships in which a related person had or
will have a material interest and that exceed $100,000 are subject
to the Committee’s review. Any member of the Nominating and
Governance Committee who is a related person with respect to
a transaction under review may not participate in the deliberation
or vote respecting approval or ratifi cation of the transaction.
Related persons are directors, director nominees, executive
offi cers, holders of 5% or more of our voting stock and their
immediate family members. Immediate family members are
spouses, parents, stepparents, children, stepchildren, siblings,
daughters-in-law, sons-in-law and any person, other than a
tenant or domestic employee, who resides in the household of
a director, director nominee, executive offi cer or holder of 5% or
more of our voting stock.
After its review, the Nominating and Governance Committee may
approve or ratify the transaction. The policies and procedures
provide that certain transactions are deemed to be pre-approved
even if they will exceed $100,000. These transactions include
employment of executive offi cers, director compensation, and
transactions with other companies if the aggregate amount of
the transaction does not exceed the greater of $1million or 2%
of that company’s total revenues and the related person is not an
executive offi cer of the other company.
Does the Company require stock ownership by directors?
Yes, the Company requires stock ownership by directors. The
Board of Directors expects non-management directors to hold
a meaningful number of shares of Company common stock and
expects non-management directors to retain shares acquired as
compensation as a director until at least 12months following their
departure from the Board. YUM directors receive a signifi cant
portion of their annual compensation in stock. The Company
believes that the emphasis on the equity component of director
compensation serves to further align the interests of directors with
those of our shareholders.
How much YUM stock do the directors own?
Stock ownership information for each director nominee is shown in the table on page 28 .
Does the Company have stock ownership guidelines for e xecutives and s enior
m anagement?
The Management Planning and Development Committee has
adopted formal stock ownership guidelines that set minimum
expectations for executive and senior management ownership.
These guidelines are discussed on page 41 . The Company has
maintained an ownership culture among its executive and senior
managers since its formation. Substantially a ll executive offi cers
and members of senior management, hold stock well in excess
of the guidelines.