Pizza Hut 2015 Annual Report Download - page 83

YUM! BRANDS, INC.-2016Proxy Statement 69
Proxy Statement
EXECUTIVE COMPENSATION
The table below shows when each of the NEOs became eligible for early retirement and the estimated lump sum value
of the benefit each participant would receive from YUM plans (both qualified and non-qualified) if he retired from the
Company on December31, 2015 and received a lump sum payment.
Name
Earliest Retirement
Date
Estimated Lump
Sum from a
Qualified Plan(1)
Estimated Lump
Sum from a Non-
Qualified Plan(2)
Total Estimated
Lump Sum
Greg Creed August 1, 2012 186,755 — 186,755
David C. Novak November 1, 2007 1,592,609 — 1,592,609
Jing-Shyh S. Su May 1, 2007 — 20,275,018 20,275,018
(1) The Retirement Plan
(2) The YIRP
The estimated lump sum values in the table above are
calculated assuming no increase in the participant’s Final
Average Earnings. The lump sums are estimated using the
mortality table and interest rate assumptions in the Retirement
Plan for participants who would actually commence benefits
on January1, 2016. Actual lump sums may be higher or
lower depending on the mortality table and interest rate in
effect at the time of distribution and the participant’s Final
Average Earnings at his date of retirement.
Lump Sum Availability
Lump sum payments are available to participants who meet
the requirements for early or normal retirement. Participants
who leave the Company prior to meeting the requirements
for Early or Normal Retirement must take their benefits in
the form of a monthly annuity and no lump sum is available.
When a lump sum is paid from the plan, it is calculated
based on actuarial assumptions for lump sums required by
Internal Revenue Code Section417(e)(3).
(2) YUM! Brands International Retirement
Plan
The YIRP is an unfunded, non-qualified defined benefit plan
that covers certain international employees who are designated
by the Company as third country nationals. Mr.Su is eligible
for benefits under this plan. The YIRP provides a retirement
benefit similar to the Retirement Plan except that partC of
the formula is calculated as the sum of:
a) Company financed State benefits or Social Security
benefits if paid periodically
b) The actuarial equivalent of all State paid or mandated
lump sum benefits financed by the Company
c) Any other Company financed benefits that are attributable
to periods of pensionable service and that are derived
from a plan maintained or contributed to by the Company
or one or more of the group of corporations that is
controlled by the Company.
Benefits are payable under the same terms and conditions
as the Retirement Plan without regard to Internal Revenue
Service limitations on amounts of includible compensation
and maximum benefits.
(3) Present Value of Accumulated Benefits
For all plans, the Present Value of Accumulated Benefits
(determined as of December31, 2015) is calculated assuming
that each participant is eligible to receive an unreduced
benefit payable in the form of a single lump sum at age 62.
This is consistent with the methodologies used in financial
accounting calculations. In addition, the economic assumptions
for the lump sum interest rate, post retirement mortality, and
discount rate are also consistent with those used in financial
accounting calculations at each measurement date.
Nonqualified Deferred Compensation
Amounts reflected in the Nonqualified Deferred Compensation
table below are provided for under the Company’s Executive
Income Deferral (“EID”) Program, Leadership Retirement
Plan (“LRP”) and Third Country National Plan (“TCN”). These
plans are unfunded, unsecured deferred, account-based
compensation plans. For each calendar year, participants
are permitted under the EID Program to defer up to 85%
of their base pay and up to 100% of their annual incentive
award. As discussed beginning at page55, Messrs.Novak,
Grismer, Pant and Niccol are eligible to participate in the
LRP. The LRP provides an annual allocation to the accounts
of Messrs.Novak, Niccol and Grismer equal to 9.5% of
each of his salary plus target bonus and to Mr.Pant equal
to 20% of his salary plus target bonus. As discussed beginning
at page55, Mr.Creed is eligible to participate in the TCN.
The TCN provides for an annual allocation to Mr.Creed’s
account equal to 15% of his salary plus target bonus.