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YUM! BRANDS, INC.-2016Proxy Statement 51
Proxy Statement
EXECUTIVE COMPENSATION
David C. Novak
Executive Chairman of the Board of Directors
2015 Performance Summary
Mr.Novak retired as Chief Executive Officer of the Company
and was appointed Executive Chairman effective January1,
2015. For 2015, the Committee awarded Mr.Novak a bonus
based on the Company’s team factor of 53.
2015 Committee Decisions
As discussed at page 42 the Committee reviewed a variety
of external and internal factors, targeting total compensation
and setting pay at the 50th percentile for Mr.Novak in his
new role as Executive Chairman. Applying this philosophy,
the Committee set Mr.Novak’s total target compensation
for 2015 at $5 million as described below. In making this
decision, the Committee took into consideration Mr.Novak’s
responsibilities as Executive Chairman and his expected
substantial contribution to the Company in 2015 including
supporting Mr.Creed, as the Company’s new CEO.
•
Base salary was decreased to $1 million (representing a
31% decrease for 2015).
•
Annual cash bonus target was decreased to 100%
(from160%) of base salary, with no individual factor for
the award.
•
Target grant value of long term incentive pay (split 75%
SARs and 25% PSUs) was set at an economic value of
$3 million (a decrease of 61% from 2014).
The table below summarizes how the annual performance-
based incentive award was calculated based on the formula
described above at page 46 for Mr.Novak:
2015 BONUS AWARD
Base Salary $1,000,000
X
Target Bonus % 100%
X
Team Performance Factor 53%
X
Individual Performance Factor N/A
=
2015 Bonus Award $530,000
The graphic below illustrates Mr.Novak’s 2015 direct
compensation:
2015 TOTAL DIRECT COMPENSATION
Variable
Compensation
Fixed
Compensation
Total
Long-Term
Equity
Compensation
Total Annual Cash
Compensation
Base Salary
$1,005,192
Performance
Shares
$750,020
Stock Appreciation
Rights
$2,168,382
Annual
Incentive Award
$530,000