Pizza Hut 2012 Annual Report Download - page 59

YUM! BRANDS, INC.-2013Proxy Statement 41
Proxy Statement
EXECUTIVE COMPENSATION
who participates in the YIRP. The benefi t payable under the YIRP is
described following the Pension Benefi ts Table beginning at page 51 .
For executives hired or re-hired after September30,2001, the
Company implemented the Leadership Retirement Plan. This is
an unfunded, unsecured account-based retirement plan which
allocates a percentage of pay to an account payable to the executive
following the later to occur of the executive’s retirement from the
Company or attainment of age 65. For 2012, Messrs.Grismer
and Pant were the only Named Executive Offi cers eligible for the
Leadership Retirement Plan. Under this plan they receive an annual
allocation to their account equal to a percentage of their base salary
and target bonus (9.5% for Mr.Grismer and 28% for Mr.Pant).
Medical, Dental, Life Insurance and Disability Coverage
We also provide other benefi ts such as medical, dental, life insurance
and disability coverage to each Named Executive Offi cer through
benefi t plans, which are also provided to all eligible U.S.-based
salaried employees. Eligible employees can purchase additional
life, dependent life and accidental death and dismemberment
coverage as part of their employee benefi ts package. In 2010,
our broad-based employee disability plan was changed to limit
the annual benefi t coverage to $300,000. For all Named Executive
Offi cers whose coverage was reduced as a result of the change,
the Company purchased individual disability coverage through
2012 (provided employment continues) to restore the lost coverage
resulting from the cap placed on the broad-based employee plan.
Effective January1,2013, the Company no longer provides this
individual disability coverage to our Named Executive Offi cers.
This coverage is provided to each Named Executive Offi cer and
the incremental cost of the additional coverage is included in the
“All Other Compensation” table at footnote3 on page 46 .
Perquisites
Mr.Novak is required to use the Company aircraft for personal
as well as business travel pursuant to the Company’s executive
security program established by the Board of Directors. The
Board’s security program also covers Mrs.Novak. The Board has
considered past instances of potential safety concerns for the
Chief Executive Offi cer and his family and consequently decided
to require Mr.Novak to use the corporate aircraft for personal
travel. We do not provide tax gross -ups on the personal use of
the Company aircraft.
The Company pays for the cost of the transmission of home
security information from Mr.Novak’s and Mr.Carucci’s homes
to our security department.
Mr.Su receives perquisites related to his overseas assignment which
were part of his original compensation package and ratifi ed by the
Committee. The Committee reviewed these benefi ts during 2012 and
has elected to continue to provide them noting that it is consistent
with how we treat other executives on foreign assignment. Mr.Su’s
agreement stipulates that the following will be provided:
•Housing, commodities and utilities allowances
•Tax preparation services
• Tax equalization to Hong Kong with respect to income attributable
to certain stock option and stock appreciation rights exercises
and to distributions of deferred income
Upon retirement from the Company, Mr.Su will be required to reimburse
the Company for the tax reimbursements for certain stock option and
stock appreciation rights exercises, if any, made within six months
of his retirement.
YUM’s Executive Stock Ownership Guidelines
The Committee has established stock ownership guidelines for our
top 600 employees, including the Named Executive Offi cers. If a
Named Executive Offi cer or other executive does not meet his or
her ownership guidelines, he or she is not eligible for a long-term
equity incentive award. In 2012, all Named Executive Offi cers and
all other employees subject to guidelines met or exceeded their
ownership guidelines.
Named Executive Offi cer Ownership Guidelines Shares Owned(1) Value of Shares(2) Multiple of Salary
Novak 336,000 2,729,359 $ 181,229,438 125
Grismer 20,000(3) 27,340 $ 1,815,376 3
Su 50,000 422,334 $ 28,042,978 25
Carucci 50,000 167,028 $ 11,090,659 12
Pant 50,000 106,769 $ 7,089,462 9
(1) Calculated as of December31,2012 and represents shares owned outright and vested RSUs granted to Mr. Novak in 2008 and all RSUs acquired under the
Company’s E xecutive I ncome D eferral P rogram.
(2) Based on YUM closing stock price of $66.40 as of December31,2012.
(3) Mr.Grismer’s ownership guidelines will increase by 10,000 shares each of the next three years until 50,000 shares are reached.