Pizza Hut 2013 Annual Report Download - page 58

Download and view the complete annual report

Please find page 58 of the 2013 Pizza Hut annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 178

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178

YUM! BRANDS, INC.-2014Proxy Statement36
Proxy Statement
EXECUTIVE COMPENSATION
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 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 2013:
NEO
2013 Bonus Target
Percentage Action Reason
Novak 160% No change No increase since total target cash compensation is at our
target philosophy
Grismer 100% Increase
from75%
Based on recent move to CFO position; adjustment aligned his
bonus target with our target philosophy
Su 115% No change No increase since existing annual incentive target opportunity is
above our target philosophy
Creed 100% No change No increase since existing annual incentive target opportunity
isslightly above our target philosophy
Pant 100% No change No increase since existing annual incentive target opportunity is
at our target philosophy
Team Performance
The Committee established team performance measures,
targets and weighting in January 2013 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 financial planning process, which takes
into account division growth strategies, historical performance,
and the expected future operating environment. These
projections include profit growth to achieve our EPS growth
target.
When setting targets for each specific 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
magnifies 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
to be paid. Additionally, all measures have a cap on the
level of performance over which no additional bonus will
be paid regardless of performance above the cap.
The performance targets are comparable to those we
disclose to our investors and, when determined to be
appropriate by our Committee, may be slightly above or
below disclosed guidance. Division targets may be adjusted
during the year when doing so is consistent with the
objectives and intent at the time the targets were originally
set. In 2013, some division operating profit growth targets
were adjusted to reflect certain Company-approved
investments and restaurant divestitures not reflective of
annual operating performance. These adjustments had no
material impact on our NEOs’ compensation.