Pizza Hut 2013 Annual Report Download - page 43

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YUM! BRANDS, INC.-2014Proxy Statement 21
Proxy Statement
ITEM3ADVISORY VOTE ON EXECUTIVE COMPENSATION
We Made Changes to Our Executive Compensation Program for 2013
After Considering Your Feedback
As described in the Compensation Discussion and Analysis,
our Management Planning and Development Committee
(the“Committee”) considered the feedback of many of our
major institutional shareholders, and during 2013 implemented
several significant changes, described below, in our executive
compensation program. Specifically, changes made by the
Committee included the following:
•
Updated the Company’s Executive Peer Group to
better align the size of the peer group companies
with YUM.
•
Re-designed 2013-2015 Performance Share Plan -
Re-designed 2013-2015 Performance Share Plan to
measure relative total shareholder return vs. the S&P 500.
•
Increased Use of Performance Share Units in CEO’s
Long Term Incentive (“LTI”) Program - Changed the
CEO’s LTI compensation mix from 90% SARs and 10%
PSUs to 75% SARs and 25% PSUs.
•
Eliminated CEO’s Accruals under Company’s Pension
Equalization Plan - Replaced our CEO’s nonqualified
pension benefits under the Pension Equalization Plan
(“PEP”) with a benefit in the Leadership Retirement Plan.
As a result of this change, Mr. Novak will receive a long-
term benefit that is similar to what he would have received
under PEP, assuming historically normal interest rates,
without the fluctuation from interest rate volatility that is
inherent in the PEP.
•
Eliminated Excise Tax Gross-Ups - Eliminated excise
tax gross-ups upon a change in control for current and
future Change in Control Severance Agreements with
executives, including the NEOs.
•
Implemented “Double Trigger” Vesting upon a Change
in Control - Implemented double trigger vesting upon
a change in control of the Company for equity awards
made in 2013 and beyond.
We believe these changes further align our executive
compensation program with best practices, enhance
shareholder value, and enable us to better achieve our business
goals.
Accordingly, we ask our shareholders to vote in favor of the
following resolution at the Annual Meeting:
RESOLVED, that the shareholders approve, on an advisory
basis, the compensation awarded to our NEOs, as disclosed
pursuant to SEC rules, including the Compensation
Discussion and Analysis, the compensation tables and
related materials included in this proxy statement.
What vote is required to approve this proposal?
Approval of this proposal requires the affirmative vote of
a majority of shares present in person or represented by
proxy and entitled to vote at the Annual Meeting. While
this vote is advisory and non-binding on the Company,
the Board of Directors and the Committee will review the
voting results and consider shareholder concerns in their
continuing evaluation of the Company’s compensation
program. Unless the Board of Directors modifies its policy
on the frequency of this advisory vote, the next advisory
vote on executive compensation will be held at the 2015
Annual Meeting of Shareholders.
What is the recommendation of the Board of Directors?
The Board of Directors recommends that you vote FOR approval of this proposal.