Pizza Hut 2014 Annual Report Download - page 51

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4MAR201521365491
YUM’s Compensation Philosophy Rights/Options (‘‘SARs/Options’’) reward for value creation
which over time is a function of our results and the
Our compensation program is designed to support our long- favorable expectations of our shareholders. Performance
term growth model, while holding our executives Share Unit (‘‘PSU’’) awards reward for superior relative
accountable to achieve key annual results year after year. performance as compared to the S&P 500. Both vehicles
YUM’s compensation philosophy for the NEOs is reviewed encourage executives to grow the value of the Company
annually by the Committee, and has the following with a long-term perspective in mind.
objectives: Drive ownership mentality — We require executives to
Reward performance — The majority of NEO pay is personally invest in the Company’s success by owning a
performance based and therefore at risk. We design pay substantial amount of Company stock.
programs that incorporate team and individual performance, Retain and reward the best talent to achieve superior
customer satisfaction and shareholder return. shareholder results — To be consistently better than
Emphasize long-term value creation — Our belief is our competitors, we need to recruit and retain superior
simple, if we create value for shareholders, then we share talent who are able to drive superior results. We have
a portion of that value with those responsible for the structured our compensation programs to be competitive
results. We believe that all of our long-term incentive and to motivate and reward high performers.
compensation is performance based. Stock Appreciation
Relationship between Company Pay and Performance
To focus on both the short and long-term success of the Company, our NEOs’ compensation includes a significant portion,
approximately 80%, that is ‘‘at-risk’’ pay, where the compensation paid is determined based on Company results. If short-term
and long-term financial and operational goals are not achieved, then performance-related compensation will decrease. If goals
are exceeded, then performance-related compensation will increase. As demonstrated below, our target pay mix for NEOs
emphasizes our commitment to ‘‘at-risk’’ pay in order to tie pay to performance.
CEO TARGET PAY MIX—2014 ALL OTHER NEO TARGET PAY MIX—2014
Base Salary
25%
Base Salary
11%
Annual Bonus
25%
Annual Bonus
19%
89%
Long-Term
Equity Incentive
At-Risk
At-Risk
50%
75%
Long-Term
Equity Incentive
70%
2015 Proxy Statement YUM! BRANDS, INC. 29
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EXECUTIVE COMPENSATION
Proxy Statement