Pizza Hut 2015 Annual Report Download - page 71

YUM! BRANDS, INC.-2016Proxy Statement 57
Proxy Statement
EXECUTIVE COMPENSATION
• Reviews competitive analysis/benchmarking for CEO and direct reports
• Reviews bonus and performance share plan metrics, targets, and leverage
recommendations for the following year
• Evaluates feedback from shareholders and proxy advisors
COMMITTEE
ANNUAL
COMPENSATION
PROCESS
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• Completes compensation risk assessment
• Conducts independence analysis of compensation consultant retaining sole authority
to continue or terminate its relationship with outside advisors, including consultant
• Reviews and approves inclusion of CD&A in proxy statement
• Mid-Year update to full
Board on CEO’s progress
against goals
• Reviews compensation trends
• Reviews market analysis of
Director compensation and
makes recommendations
to Board (bi-annually)
COMMITTEE ANNUAL COMPENSATION PROCESS
• Evaluates and approves CEO and direct reports’ performance against
pre-established goals and compensation decisions
• Approves bonus plans and Performance Shares results for the prior year
• Approves bonus and performance share plan metrics, targets and
leverage for the current year
• Reviews tally sheets
• Confirms CEO and CEO’s direct reports meet ownership guidelines
Role of the Independent Consultant
The Committee’s charter states the Committee may retain
outside compensation consultants, lawyers or other advisors.
The Committee retains an independent consultant, Meridian
Compensation Partners, LLC (“Meridian”), to advise it on
certain compensation matters. The Committee has instructed
Meridian that:
•
it is to act independently of management and at the
direction of the Committee;
•
its ongoing engagement will be determined by the
Committee;
•
it is to inform the Committee of relevant trends and
regulatory developments;
•
it is to provide compensation comparisons based on
information that is derived from comparable businesses
of a similar size to the Company for the NEOs; and
•
it is to assist the Committee in its determination of the
annual compensation package for our CEO and other
NEOs.
The Committee considered the following factors, among
others, in determining that Meridian is independent of
management and its provision of services to the Committee
did not give rise to a conflict of interest:
•
Meridian did not provide any services to the Company
unrelated to executive compensation.
•
Meridian has no business or personal relationship with
any member of the Committee or management.
•
Meridian’s partners and employees who provide services
to the Committee are prohibited from owning YUM stock
per Meridian’s firm policy.
Comparator Compensation Data
Our Committee uses an evaluation of how our NEO target
compensation levels compare to those of similarly situated
executives at companies that comprise our executive peer
group (“Executive Peer Group”) as one of the factors in
setting executive compensation. The Executive Peer Group
is made up of retail, hospitality, food, nondurable consumer
goods companies, special eatery and quick service
restaurants, as these represent the sectors with which the
Company is most likely to compete for executive talent.
The companies selected from these sectors must also be
reflective of the overall market characteristics of our executive
talent market, relative leadership position in their sector,
size as measured by revenues, complexity of their business,
and in some cases global reach.
Executive Peer Group
The Committee established the current peer group of companies (the “Executive Peer Group”) for all NEOs at the end of
2014 for pay determinations in 2015. The 2015 Executive Peer Group is comprised of the following companies: