Pizza Hut 2012 Annual Report Download - page 55

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YUM! BRANDS, INC.-2013Proxy Statement 37
Proxy Statement
EXECUTIVE COMPENSATION
Based on the Committee’s review, the following actions were taken regarding base salary for 2012:
Named
Executive Offi cer 2012 Base Salary Action Reason
Novak $ 1,450,000 No increase No increase since existing total cash compensation is slightly above our
target philosophy
Grismer $ 550,000 36% increase Increase for promotion to Chief Financial Offi cer; adjustment placed his
base salary below our target philosophy based on recent move to new
role
Su $ 1,100,000 10% increase Increase for merit based on delivering sustained long-term results and for
his leadership in running the China division; adjustment placed his base
salary signifi cantly above our target philosophy
Carucci $ 900,000 12% increase Increase for merit and promotion to President; adjustment placed his
base salary slightly above our target philosophy
Pant $ 750,000 No increase No increase since existing base salary slightly above our target
philosophy
Annual Performance-Based Cash Bonuses
Our performance-based annual bonus program, the Yum Leaders’ Bonus Program, is a cash-based plan. The principal purpose of
the Yum Leaders’ Bonus Program is to motivate and reward strong team and individual performance that drives shareholder value.
The formula for calculating the performance-based annual bonus, under the Yum Leaders’ Bonus Program is:
Base Salary × Annual Target Bonus
Percentage ×Team Performance
(0 – 200%) ×Individual Performance
(0 – 150%) =Bonus Payout
(0 – 300%)
Bonus Targets
Based on the Committee’s review, the following actions were taken regarding bonus targets for 2012:
Named
Executive Offi cer
2012 Bonus Target
Percentage Action Reason
Novak 160% No change Unchanged because total target cash is at our target philosophy
Grismer 75% Increase
from60%
Increase due to promotion to Chief Financial Offi cer and to be more
consistent with our target philosophy
Su 115% No change Unchanged because existing annual incentive target opportunity is
above our target philosophy
Carucci 120% Increase
from100%
Increase due to promotion to President and to be more consistent
with our target philosophy
Pant 100% No change Unchanged because existing annual incentive target opportunity is
at our target philosophy
Determining Team Performance Measures, Targets and Weighting
The Committee established team performance measures, targets
and weighting in January2012 based on recommendations from
management. The objectives were also reviewed by the Board to
ensure the goals support the Company’s overall strategic objectives.
The performance targets were developed through the Company’s
annual fi nancial planning process, which takes into account
division growth strategies, historical performance, and the future
operating environment. These projections include profi t growth to
achieve our EPS growth target of at least 10%. The Committee
has maintained our EPS growth target of at least 10% for over
10 years to optimize the long term and short term perspective
on managing the business and believes this consistent year after
year level of growth is a hallmark of a great company.
When setting targets for each specifi c team performance measure,
the Company takes into account overall business goals and
structures the target to motivate achievement of desired performance
consistent with our EPS growth commitment to shareholders.
A leverage formula for each team performance measure magnifi es the
potential impact that performance above or below the performance
target will have on the calculation of annual bonus. This leverage
increases the payouts when targets are exceeded and reduces
payouts when performance is below target. There is a threshold
level of performance for all measures that must be met in order for
any bonus dollars to be paid. Additionally, all measures have a cap
on the level of performance over which no additional bonus dollars
will be paid regardless of performance above the cap.