Pizza Hut 2014 Annual Report Download - page 65

Compensation Policies & Practices
.................................................................................................................................................................................................................................................................................................................................................................................
YUM’s Executive Stock Ownership Guidelines
The Committee has established stock ownership guidelines for approximately 400 of our senior 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 2014, all NEOs and all other employees subject to guidelines met or exceeded their ownership guidelines.
Novak 336,000 2,746,860 $200,108,751 138
Grismer 40,000 44,484 $ 3,240,659 5
Su 50,000 407,615 $ 29,694,753 27
Creed 50,000 102,379 $ 7,458,310 10
Bergren 50,000 108,640 $ 7,914,424 11
(1) Calculated as of December 31, 2014 and represents shares owned outright, vested RSUs and all RSUs awarded under the Company’s
Executive Income Deferral Program.
(2) Based on YUM closing stock price of $72.85 as of December 31, 2014.
Payments upon Termination of Employment With respect to consideration of how these benefits fit into
the overall compensation policy, the change-in-control
The Company does not have agreements with its executives benefits are reviewed from time to time by the Committee
concerning payments upon termination of employment for competitiveness. The Committee believes the benefits
except in the case of a change in control of the Company. provided in case of a change in control are appropriate,
The Committee believes these are appropriate agreements support shareholder interests and are consistent with the
for retaining NEOs and other executive officers to preserve policy of attracting and retaining highly qualified employees.
shareholder value in case of a potential change in control.
The Committee periodically reviews these agreements and YUM’s Stock Option and SAR Granting Practices
other aspects of the Company’s change-in-control program.
Historically, we have awarded non-qualified SARs/Options
The Company’s change-in-control agreements, in general, grants annually at the Committee’s January meeting. This
entitle NEOs terminated other than for cause within two meeting date is set by the Board of Directors more than six
years of the change in control, to receive a benefit of two months prior to the actual meeting. The Committee sets the
times salary and bonus. The terms of these change-in- annual grant date as the second business day after our
control agreements are described beginning on page 59. fourth quarter earnings release. The exercise price of
In 2013, the Company eliminated tax gross-ups for awards granted under our Long-Term Incentive Plan
executives, including the NEOs, for any excise tax due (‘‘LTIP’’) is set as the closing price on the date of grants. We
under Section 4999 of the Internal Revenue Code and make grants at the same time other elements of annual
implemented a ‘‘best net after-tax’’ approach to address any compensation are determined so that we can consider all
potential excise tax imposed on executives. If any excise tax elements of compensation in making the grants. We do not
is due, the Company will not make a gross-up payment, but backdate or make grants retroactively. In addition, we do
instead will reduce payments to an executive if the reduction not time such grants in coordination with our possession or
will provide the NEO the best net after-tax result. If full release of material, non-public or other information.
payment to a NEO will result in the best net after-tax result, Grants may also be made on other dates the Board of
the full amount will be paid, but the NEO will be solely Directors meets. These grants generally are Chairman’s
responsible for any potential excise tax payment. Also, Awards, which are made in recognition of superlative
effective for equity awards made in 2013 and beyond, the performance and extraordinary impact on business results.
Company implemented ‘‘double trigger’’ vesting, pursuant
to which outstanding awards will fully and immediately vest Management recommends the awards be made pursuant to
only if the executive is employed on the date of a change in our LTIP to the Committee, however, the Committee
control of the Company and is involuntarily terminated determines whether and to whom it will issue grants and
(other than by the Company for cause) on or within two determines the amount of the grant. The Board of Directors has
years following the change in control. delegated to Mr. Novak and Anne Byerlein, our Chief People
Officer, the ability to make grants to employees who are not
In case of retirement, the Company provides retirement executive officers and whose grant is less than approximately
benefits described above and life insurance benefits (to 13,000 SARs/Options annually. In the case of these grants, the
employees eligible under the Retirement Plan), the continued Committee sets all the terms of each award, except the actual
ability to exercise vested SARs/Options and the ability to vest number of SARs/Options, which is determined by Mr. Novak
in performance share awards on a pro-rata basis.
2015 Proxy Statement YUM! BRANDS, INC. 43
NEO Ownership Guidelines Shares Owned(1) Value of Shares(2) Multiple of Salary
EXECUTIVE COMPENSATION
Proxy Statement