Pizza Hut 2013 Annual Report Download - page 62

YUM! BRANDS, INC.-2014Proxy Statement40
Proxy Statement
EXECUTIVE COMPENSATION
2013 Long-term Incentive Awards
Based on the Committee’s assessment as described above, the Committee set the following 2013 values for long-term
incentive awards, including SAR and PSU awards, for each NEO:
NEO
2013
Grant Value Reason
Novak $ 6,825,000(1) Awarded above target philosophy based on strong 2012 performance and his sustained
long-term results in role
Grismer $ 1,225,000(1)(2) Awarded below target philosophy based on partial year in CFO role
Su $ 2,100,000(1) Awarded above our target philosophy based on delivering sustained long-term results and
importance of his leadership in running the China Division
Creed $ 1,525,000(1) Awarded above target philosophy based on his sustained long-term results in role
Pant $ 1,525,000(1) Awarded above target philosophy based on his sustained long-term results in role
(1) 2013 grant values are rounded to the nearest $25,000 to reflect the Committee approved valuation figures.
(2) Mr. Grismer’s 2013 grant value excludes his 2013 Chairman’s Award of $675,000 (rounded to the nearest $25,000 to reflect the Committee-approved
valuation figures), which was awarded based on his recent promotion to the CFO role.
Retirement and Additional Benefits
Retirement Benefits
We offer several types of competitive retirement benefits.
The YUM! Brands Retirement Plan (“Retirement Plan”) is a
broad-based qualified plan designed to provide a retirement
income based on years of service with the Company and
average annual earnings. Mr. Novak is the only NEO who
actively participates in the Retirement Plan. Mr. Creed is
not an active participant in the Retirement Plan; however,
he maintains a balance in the Retirement Plan from the
twoyears (2002 and 2003) that he was a participant.
The PEP is offered to employees at all levels who meet the
eligibility requirements, and is a “restoration plan” intended
to restore benefits otherwise lost under the qualified plan
due to various governmental limits. This plan is based on
the same underlying formula as the Retirement Plan. None
of our NEOs participate in the PEP, as Mr. Novak ceased
participating in the PEP in 2012.
For executives hired or re-hired after September 30, 2001,
the Company implemented the LRP. 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 separation of
employment from the Company or attainment of age 55.
As discussed in the Summary Compensation Table at
footnote 5, beginning in 2013, Mr. Novak started receiving
an allocation to his LRP account equal to 9.5% of his base
salary and target bonus and will receive an annual earnings
credit on his account balance equal to 120% of the applicable
federal rate. For 2013, Mr. Grismer and Mr. Pant were also
eligible for the LRP. Under the LRP, they receive an annual
allocation to their accounts equal to a percentage of their
base salary and target bonus (9.5% for Mr. Grismer and
20% for Mr. Pant) and an annual earnings credit of 5%.
The Company provides retirement benefits for certain
international employees through the YUM! Brands
International Retirement Plan (“YIRP”) and the Third Country
National Plan (“TCN”). The YIRP is an unfunded, non-qualified
plan that provides benefits 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 benefits. The
TCN is an unfunded, unsecured account-based retirement
plan that provides an annual contribution floor of 7.5% of
salary and target bonus and an annual earnings credit of
5% on the balance. The Company can add an additional
7.5%, for a maximum total contribution of 15% annually.
Mr. Su is the only NEO who participates in the YIRP.
Mr.Creed is the only NEO who participates in the TCN.
Under this plan, he receives an annual contribution equal
to 15% of his base salary and target bonus and an annual
earnings credit of 5%.
Benefits payable under these plans are described in more
detail beginning on page 51.