Pizza Hut 2012 Annual Report Download - page 58

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YUM! BRANDS, INC.-2013Proxy Statement40
Proxy Statement
EXECUTIVE COMPENSATION
Performance Share Units
The Performance Share Unit, or “PSU”, awards granted in 2012 can be earned based on a 3-year EPS growth over the period 2012-
2014. The target, threshold and maximum shares that may be paid out under these awards for each Named Executive Offi cer are
described at page 47 .
For the performance period covering 2012 – 2014 fi scal years, each Named Executive Offi cer will earn a percentage of their target PSU
award based on the achieved level of three-year EPS compound annual growth rate as set forth in the chart below:
EPS Growth
<7% 7% 8.5% 10% 11.5% 13% 14.5% 16%
Payout as % of Target
0% 50% 75% 100% 125% 150% 175% 200%
Dividend equivalents will accrue during the performance period
and will be distributed as incremental shares but only in the same
proportion and at the same time as the original PSUs are earned.
If no PSUs are earned, no dividend equivalents will be paid. The
PSUs are eligible for deferral under the Executive Income Deferral
Plan. The target, threshold and maximum shares that may be
paid out under these awards for each Named Executive Offi cer
are described at page 47 .
As discussed at page 33 , the Committee changed the design of
the Performance Share Unit awards granted in 2013. Awards for
the 2013-2015 period will be earned based on 3-year average
TSR relative to the companies in the S&P 500. The target grant
value for the Chief Executive Offi cer is 25% of the LTI award value
and for all other Named Executive Offi cers is set based on a value
equal to 9 – 16% of the LTI award value.
For the performance period covering 2013-2015 fi scal years, each Named Executive Offi cer will earn a percentage of their target PSU award
based on the achieved TSR percentile ranking as set forth in the chart below:
TSR Percentile Ranking
<40% 40% 50% 70% 90%
Payout as % of Target
0% 50% 100% 150% 200%
2012 Long-term Incentive Awards
Based on the Committee’s assessment as described above, the Committee set the following 2012 values for long-term incentive
awards for each Named Executive Offi cer:
Named Executive
Offi cer
2012
Grant Value Reason
Novak $ 7,195,000 This award brought his total direct compensation to slightly below the total direct compensation
philosophy for our Chief Executive Offi cer
Grismer $ 544,000 This award was made to Mr.Grismer prior to his promotion to CFO and refl ected his prior role
Su $ 3,105,000 Awarded signifi cantly above our target philosophy based on delivering sustained long-term results
and importance of his leadership in running the China D ivision
Carucci $ 2,169,000 Awarded at our target philosophy based on his sustained long-term results in the CFO role
Pant $ 2,154,000 Awarded signifi cantly above our target philosophy based on delivering sustained long-term results
in the YRI D ivision
Additional Compensation Elements
Retirement Benefi ts
We offer competitive retirement benefi ts through the YUM! Brands
Retirement Plan (“Retirement Plan”). This is a broad-based qualifi ed
plan designed to provide a retirement income based on years
of service with the Company and average annual earnings. In
addition, the YUM! Brands,Inc. Pension Equalization Plan (“Pension
Equalization Plan”), which is offered to employees at all levels who
meet the eligibility requirements, is a “restoration plan” intended
to restore benefi ts otherwise lost under the qualifi ed plan due
to various governmental limits. This plan is based on the same
underlying formula as the Retirement Plan. The annual benefi t
payable under these plans to U.S.-based employees hired prior to
October1,2001 is discussed following the Pension Benefi ts Table
on page 51 . Mess rs . Novak and Carucci participate in the Retirement
Plan and Mr. Carucci participates in the Pension Equalization Plan.
As described at page 52 , Mr.Novak ceased participating in the
Pension Equalization Plan in 2012.
The Company provides retirement benefi ts for certain international
employees designated by the Company as third country nationals
through the YUM! Brands International Retirement Plan (“YIRP”).
The YIRP is an unfunded, non-qualifi ed defi ned benefi t plan that
provides benefi ts similar to, and pursuant to the same terms and
conditions as, the Retirement Plan without regard to Internal Revenue
Service limitations on amounts of includible compensation and
maximum benefi ts. Mr. Su is the only Named Executive Offi cer