Pizza Hut 2013 Annual Report Download - page 63

YUM! BRANDS, INC.-2014Proxy Statement 41
Proxy Statement
EXECUTIVE COMPENSATION
Medical, Dental, Life Insurance and Disability Coverage
We also provide other benefits such as medical, dental, life
insurance and disability coverage to each NEO through
benefit 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 benefits
package. Our broad-based employee disability plan limits
the annual benefit coverage to $300,000.
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 when
she accompanies Mr. Novak. The Board has considered
past instances of potential safety concerns for the CEO and
Mrs.Novak 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 home to our security
department.
Mr. Su receives perquisites related to his overseas assignment
which were part of his original compensation package and
ratified by the Committee. The Committee reviewed these
benefits during 2013 and has elected to continue to provide
them noting that this practice 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 SAR 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 SAR exercises, if any, made within
six months of his retirement.
Compensation Policies & Practices
YUM’s Executive Stock Ownership Guidelines
The Committee has established stock ownership guidelines
for our top 600 employees, including the NEOs. If a NEO
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 2013, all NEOs and all other employees
subject to guidelines met or exceeded their ownership
guidelines.
NEO Ownership Guidelines Shares Owned(1) Value of Shares(2) Multiple of Salary
Novak 336,000 2,741,863 $ 207,312,261 143
Grismer 30,000(3) 44,131 $ 3,336,745 5
Su 50,000 430,437 $ 32,545,342 30
Creed 50,000 110,772 $ 8,375,471 11
Pant 50,000 104,860 $ 7,928,465 11
(1) Calculated as of December 31, 2013 and represents shares owned outright and vested RSUs granted to Mr. Novak in 2008 and all RSUs awarded under the
Company’s Executive Income Deferral Program.
(2) Based on YUM closing stock price of $75.61 as of December 31, 2013.
(3) Mr. Grismer’s ownership guidelines will increase by 10,000 shares each of the next two years until 50,000 shares are reached.
Payments Upon Termination of Employment
The Company does not have agreements with its executives
concerning payments upon termination of employment
except in the case of a change in control of the Company.
The Committee believes these are appropriate agreements
for retaining NEOs and other executive officers to preserve
shareholder value in case of a potential change in control.
The Committee periodically reviews these agreements and
other aspects of the Company’s change in control program.