Pizza Hut 2013 Annual Report Download - page 35

YUM! BRANDS, INC.-2014Proxy Statement 13
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 59�
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 ratification of the transaction.
Related persons are directors, director nominees, executive
officers, 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
officer 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 officers, 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 officer
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 significant 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 26.
Does the Company have stock ownership guidelines for executives and senior
management?
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 all executive officers and members of senior
management, hold stock well in excess of the guidelines.