Pizza Hut 2015 Annual Report Download - page 22

YUM! BRANDS, INC.-2016Proxy Statement8
Proxy Statement
GOVERNANCE OF THE COMPANY
How Can Shareholders Nominate for the Board?
Director nominations for inclusion in Yum’s proxy materials
(Proxy Access). During the past year, we reached out to
many of our shareholders regarding corporate governance
matters, including proxy access for director nominations.
Based on these discussions, we amended our bylaws during
2015 to adopt proxy access provisions that we believe serve
the interests of our shareholders.
The amended Yum bylaws permit a shareholder, or group
of up to 20 shareholders, owning continuously for at least
three years shares of Yum stock representing an aggregate
of at least 3% of our outstanding shares, to nominate and
include in Yum’s proxy materials director nominees
constituting up to 20% of Yum’s Board, provided that the
shareholder(s) and nominee(s) satisfy the requirements in
Yum’s bylaws. Notice of proxy access director nominees
must be received no earlier than November 10, 2016, and
no later than December 10, 2016.
Director nominations to be brought before the 2017
Annual Meeting of Shareholders. Director nominations
that a shareholder intends to present at the 2017 Annual
Meeting of Shareholders, other than through the proxy
access procedures described above, must be received no
later than February 20, 2017. These nominations must be
submitted by a shareholder in accordance with the
requirements specified in the Yum’s bylaws.
Where to send director nominations for the 2017 Annual
Meeting of Shareholders. Director nominations brought
by shareholders must be delivered to Yum’s Secretary by
mail at YUM! Brands, Inc., 1441 Gardiner Lane, Louisville,
Kentucky 40213 and received by Yum’s Secretary by the
dates set forth above.
What is the Board’s leadership structure?
In 2016, the Board will continue the evolution of its leadership
structure. Effective January 1, 2015, the Board appointed
Greg Creed as CEO to succeed David C. Novak and
contemporaneously appointed Mr. Novak Executive Chairman
of the Board. Effective after the upcoming Annual Meeting
on May 20, 2016, Mr. Novak will retire as Executive Chairman
and step down from the Board. Robert D. Walter will assume
the new position of Non-Executive Chairman of the Board.
Applying our Corporate Governance Principles, the Board
also determined that based on Mr. Walter’s independence,
it would not appoint a Lead Director when Mr. Walter
becomes Non-Executive Chairman.
The Nominating and Governance Committee annually
reviews the Board’s leadership structure and evaluates the
performance and effectiveness of the Board of Directors.
The Board retains the authority to modify its leadership
structure in order to address our Company’s circumstances
and advance the best interests of the Company and its
shareholders as and when appropriate. The Board’s annual
self-evaluation includes questions regarding the Board’s
opportunities for open communication and the effectiveness
of executive sessions.
The Company’s Governance Principles provide that the CEO
may serve as Chairman of the Board, and up until 2015
Mr.Novak served as our CEO and Chairman. These Principles
also provide for an independent Lead Director, when the
CEO is serving as Chairman. During 2015, our CEO did not
serve as Chairman, and our Board determined that it was
appropriate to have a Lead Director since Mr. Novak was
our former CEO. Our Board believes that Board independence
and oversight of management are effectively maintained
through a strong independent Chairman or Lead Director
and through the Board’s composition, committee system
and policy of having regular executive sessions of non-
employee directors, all of which are discussed below this
section. ThomasM.Ryan, the Chairman of our Nominating
and Governance Committee, served as Lead Director
during2015.
As CEO, Mr. Creed is responsible for leading the Company’s
strategies, organization design, people development and
culture, and for providing the day-to-day leadership over
operations. In 2015, while serving as Executive Chairman,
Mr. Novak was responsible for supporting the CEO on
corporate strategy, innovative business and brand building
ideas, and leadership development.
The Board created the Lead Director position in August 2012,
after its annual review which included engaging in dialogue
and receiving input from a number of major shareholders.
During 2015 (and since 2012), the Lead Director position
was structured so that one independent Board member is
empowered with sufficient authority to ensure independent
oversight of the Company and its management. The Lead
Director position has no term limit and is subject only to
annual approval by the independent members of the Board.
Thomas M. Ryan served as the Lead Director during 2015,
and the Board concluded that Mr. Ryan provided effective
oversight in this role. The Board appointed Robert D. Walter
Lead Director effective January 1, 2016.
To assure effective independent oversight, the Board has
adopted a number of governance practices discussed on
the following page.