Taco Bell 2014 Annual Report Download - page 64

15MAR201511093851
Retirement and Other Benefits
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Retirement Benefits Medical, Dental, Life Insurance and Disability
Coverage
We offer several types of competitive retirement benefits.
We also provide other benefits such as medical, dental, life
The YUM! Brands Retirement Plan (‘‘Retirement Plan’’) is a insurance and disability coverage to each NEO through
broad-based qualified plan designed to provide a retirement benefit plans, which are also provided to all eligible U.S.-
income based on years of service with the Company and based salaried employees. Eligible employees can
average annual earnings. Mr. Novak is the only NEO who purchase additional life, dependent life and accidental
actively participates in the Retirement Plan. Mr. Creed and death and dismemberment coverage as part of their
Mr. Bergren are not active participants in the Retirement employee benefits package. Our broad-based employee
Plan; however, each maintains a balance in the Retirement disability plan limits the annual benefit coverage to
Plan from the years that he was a participant. $300,000.
The Pension Equalization Plan (‘‘PEP’’) is offered to
employees at all levels who meet the eligibility requirements, Perquisites
and is a ‘‘restoration plan’’ intended to restore benefits Mr. Novak and Mr. Creed (beginning in 2015) are required
otherwise lost under the qualified plan due to various to use the Company aircraft for personal as well as business
governmental limits. This plan is based on the same travel pursuant to the Company’s executive security
underlying formula as the Retirement Plan. Mr. Bergren is the program established by the Board of Directors. The Board’s
only NEO who currently participates in the PEP. Mr. Novak security program also covers Mrs. Novak and Mrs. Creed.
ceased participating in the PEP in 2012. The Board has considered past instances of potential safety
For executives hired or re-hired after September 30, 2001, concerns for the CEO and their spouses and based on a
the Company implemented the Leadership Retirement Plan security study completed by a security expert and the
(‘‘LRP’’). This is an unfunded, unsecured account-based expert’s advice decided to require Mr. Novak and Mr. Creed
retirement plan which allocates a percentage of pay to an to use the corporate aircraft for personal travel. We do not
account payable to the executive following the later to occur provide tax gross-ups on the personal use of the Company
of the executive’s separation of employment from the aircraft. Beginning in 2015, the Committee has approved
Company or attainment of age 55. As discussed in the timeshare arrangements for Mr. Novak and Mr. Creed with
Summary Compensation Table at footnote 5, beginning in respect to their personal use of aircraft. The arrangement
2013, Mr. Novak started receiving an allocation to his LRP provides that upon the executive reaching $200,000 in
account equal to 9.5% of his base salary and target bonus incremental costs for his personal use, the executive’s
and will receive an annual earnings credit on his account timeshare agreements will be triggered and any incremental
balance equal to 120% of the applicable federal rate. For costs for personal use above $200,000 will be reimbursed to
2014, Mr. Grismer and Mr. Bergren were also eligible for the the Company in accordance with the requirements of the
LRP. Under the LRP, they receive an annual allocation to Federal Aviation Administration regulations.
their accounts equal to a percentage of their base salary The Company pays for the cost of the transmission of home
and target bonus (9.5% for Mr. Grismer and 28% for security information from Mr. Novak’s home to our security
Mr. Bergren) and an annual earnings credit of 5%. department.
The Company provides retirement benefits for certain Mr. Su receives perquisites related to his overseas
international employees through the YUM! Brands assignment which were part of his original compensation
International Retirement Plan (‘‘YIRP’’) and the Third Country package and ratified by the Committee. The Committee
National Plan (‘‘TCN’’). The YIRP is an unfunded, non-qualified reviewed these benefits during 2014 and has elected to
plan that provides benefits similar to, and pursuant to the same continue to provide them noting that this practice is consistent
terms and conditions as, the Retirement Plan without regard to with how we treat other executives on foreign assignment.
Internal Revenue Service limitations on amounts of includible Mr. Su’s agreement stipulates that the following will be
compensation and maximum benefits. The TCN is an provided:
unfunded, unsecured account-based retirement plan that
provides an annual contribution floor of 7.5% of salary and Housing, commodities and utilities allowances
target bonus and an annual earnings credit of 5% on the Tax preparation services
balance. The Company can add an additional 7.5%, for a
maximum total contribution of 15% annually. Mr. Su is the only Tax equalization to Hong Kong with respect to income
NEO who participates in the YIRP. Mr. Creed is the only NEO attributable to certain SARs/Options exercises and to
who participates in the TCN. Under this plan, Mr. Creed distributions of deferred income
receives an annual contribution equal to 15% of his base Upon retirement from the Company, Mr. Su will be required
salary and target bonus and an annual earnings credit of 5%. to reimburse the Company for the tax reimbursements for
Benefits payable under these plans are described in more certain SARs/Options exercises, if any, made within six
detail beginning on page 53. months of his retirement.
42 YUM! BRANDS, INC. 2015 Proxy Statement
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EXECUTIVE COMPENSATION
Proxy Statement