DEF 14A of Yum Brands Inc
Filed Apr 4, 2025 · FY20240000950170-25-051113
May 15, 2025
May 15, 2025 The Board of Directors (the “Board of Directors” or the “Board”) of YUM! Brands, Inc., a North Carolina corporation (“YUM” or the “Company”), solicits the enclosed proxy for use at the Annual Meeting of Shareholders of the Company to be held at 9:00 a.m. (Central Time), on Thursday, May 15, 2025 via live webcast at www.virtualshareholdermeeting.com/YUM2025. This proxy statement contains information about the matters to be voted on at the Annual Meeting and the voting process, as well as information about our directors and most highly paid executive officers. QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING What is the purpose of the Annual Meeting? At our Annual Meeting, shareholders will vote on several important Company matters. In addition, our management will report on the Company’s performance over the last fiscal year and, following the meeting, respond to questions from shareholders. Why am I receiving these materials? The Board has made these materials available to you over the internet or has delivered printed versions of these materials to you by mail, in connection with the Board’s solicitation of proxies for use at the 2025 Annual Meeting of Shareholders (the “Annual Meeting”). The Annual Meeting is scheduled to be held virtually on Thursday, May 15, 2025 at 9:00 a.m. Central Time at the link set forth above. You will need the 16-digit control number provided on the Notice of Internet Availability of Proxy Materials, Voter Instruction Form or your proxy card (see below). This solicitation is for proxies for use at the Annual Meeting or at any reconvened meeting after an adjournment or postponement of the Annual Meeting. Why did I receive a one-page Notice in the mail regarding the Internet availability of proxy materials this year instead of a full set of proxy materials? As permitted by Securities and Exchange Commission (“SEC”) rules, we are making this proxy statement and our Annual Report available to our shareholders electronically via the Internet. On or about April 4, 2025, we mailed to our shareholders a Notice containing instructions on how to access this proxy statement and our Annual Report and vote online. If you received a Notice by mail you will not receive a printed copy of the proxy materials in the mail unless you request a copy. The Notice instructs you on how to access and review all of the important information contained in the proxy statement and Annual Report. The Notice also instructs you on how you may submit your proxy over the Internet. If you received a Notice
May 15, 2025
| yum! brands, inc. | | 2025 PROXY STATEMENT |
May 15, 2025
by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials contained on the Notice. We encourage you to take advantage of the availability of the proxy materials on the Internet in order to help lower the costs of delivery and reduce the Company’s environmental impact. Who may attend the Annual Meeting? The Annual Meeting is open to all shareholders of record as of close of business on March 19, 2025, or their duly appointed proxies. How do I attend the Virtual Annual Meeting? You can attend the Annual Meeting, vote and submit a question during the Annual Meeting by visiting www.virtualshareholdermeeting.com/YUM2025 and using your 16-digit control number (included on your Notice Regarding the Availability of Proxy Materials, Proxy Card or Voter Instruction Form) to enter the meeting. Online access will begin at 8:45 a.m. Central Time, and we encourage you to access the meeting prior to the start time. The meeting webcast will begin promptly at 9:00 a.m. Central Time on May 15, 2025. May shareholders ask questions? Yes. Representatives of the Company will answer questions of general interest submitted by shareholders following the Annual Meeting. In order to give a greater number of shareholders an opportunity to ask questions, individuals or groups will be allowed to ask only one question and no repetitive or follow-up questions will be permitted. You may submit a question during the Annual Meeting by visiting www.virtualshareholdermeeting.com/YUM2025 and using your 16-digit control number to enter the meeting. Questions will be answered as time allows. Who may vote? You may vote if you owned YUM common stock as of the close of business on the record date, March 19, 2025. Each share of YUM common stock is entitled to one vote. As of March 19, 2025, YUM had approximately 278.5 million shares of common stock outstanding. What am I voting on? You will be voting on the following seven (7) items of business at the Annual Meeting: ▪ The election of twelve (12) directors to serve until the next Annual Meeting of Shareholders and until their respective successors are duly elected and qualified; ▪ The ratification of the selection of KPMG LLP as our independent auditors for the fiscal year ending December 31, 2025; ▪ An advisory vote on executive compensation; ▪ Approval of the Company’s 2025 Long Term Incentive Plan; and ▪ Three (3) shareholder proposals. We will also consider other business that properly comes before the meeting. How does the Board of Directors recommend that I vote? Our Board of Directors recommends that you vote your shares: ▪ FOR each of the nominees named in this proxy statement for election to the Board; ▪ FOR the ratification of the selection of KPMG LLP as our independent auditors; FOR the proposal regarding an advisory vote on executive compensation; QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING FOR the proposal regarding the Company’s 2025 Long Term Incentive Plan; and ▪ AGAINST the shareholder proposals. How do I vote before the Virtual Annual Meeting? There are three ways to vote before the meeting: ▪ By Internet — If you have Internet access, we encourage you to vote on www.proxyvote.com by following instructions on the Notice or proxy card; ▪ By telephone — by making a toll-free telephone call from the U.S. or Canada to 1(800) 690-6903 (if you have any questions about how to vote over the phone, call 1(888) 298-6986); or ▪ By mail — If you received your proxy materials by mail, you can vote by completing, signing and returning the enclosed proxy card in the postage-paid envelope provided. If you are a participant in the direct stock purchase and dividend reinvestment plan (ComputerShare CIP), as a registered shareholder, you will receive all proxy materials and may vote your shares according to the procedures outlined herein. If you are a participant in the YUM! Brands 401(k) Plan (“401(k) Plan”), the trustee of the 401(k) Plan will only vote the shares for which it has received directions to vote from you. Proxies submitted through the Internet or by telephone as described above must be received by 11:59 p.m., Eastern Time, on May 14, 2025. Proxies submitted by mail must be received prior to the meeting. Directions submitted by 401(k) Plan participants must be received by 12:00 p.m., Eastern Time, on May 13, 2025. Also, if you hold your shares in the name of a bank or broker, your ability to vote by the Internet or telephone depends on their voting processes. Please follow the directions on your notice carefully. A number of brokerage firms and banks participate in a program provided through Broadridge Financial Solutions, Inc. (“Broadridge”) that offers Internet and telephone voting options. If your shares are held in an account with a brokerage firm or bank participating in the Broadridge program, you may vote those shares through the Internet at Broadridge’s voting website (www.proxyvote.com) or telephonically by calling the telephone number shown on the voting instruction form received from your brokerage firm or bank. Votes submitted through the Internet or by telephone through the Broadridge program must be received by 11:59 p.m., Eastern Time, on May 14, 2025. Can I vote at the Virtual Annual Meeting? Shares registered directly in your name as the shareholder of record may be voted in person at the Annual Meeting. Shares held through a broker or nominee may be voted in person only if you obtain a legal proxy from the broker or nominee that holds your shares giving you the right to vote the shares. Even if you plan to attend the Annual Meeting, we encourage you to vote your shares by proxy. You may still vote your shares at the meeting even if you have previously voted by proxy. Can I change my mind after I vote? You may change your vote at any time before the polls close at the Annual Meeting. You may do this by: ▪ Signing another proxy card with a later date and returning it to us prior to the Annual Meeting; ▪ Voting again through the Internet or by telephone prior to 11:59 p.m., Eastern Time, on May 14, 2025; ▪ Giving written notice to the Corporate Secretary of the Company prior to the Annual Meeting; or ▪ Voting again at the Annual Meeting. Your virtual attendance at the Annual Meeting will not have the effect of revoking a proxy unless you notify our Corporate Secretary in writing before the polls close that you wish to revoke a previous proxy.
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| yum! brands, inc. | | 2025 PROXY STATEMENT |
May 15, 2025
Who will count the votes? Representatives of Computershare, Inc. will count the votes and will serve as the independent inspector of election. What if I return my proxy card but do not provide voting instructions? If you vote by proxy card, your shares will be voted as you instruct by the individuals named on the proxy card. If you sign and return a proxy card but do not specify how your shares are to be voted, the persons named as proxies on the proxy card will vote your shares in accordance with the recommendations of the Board. These recommendations are: ▪ FOR the election of the twelve (12) nominees for director named in this proxy statement (Item 1); ▪ FOR the ratification of the selection of KPMG LLP as our independent auditors for the fiscal year 2025 (Item 2); ▪ FOR the proposal regarding an advisory vote on executive compensation (Item 3); ▪ FOR the proposal regarding the Company’s 2025 Long Term Incentive Plan (Item 4); and ▪ AGAINST the shareholder proposals (Items 5-7). What does it mean if I receive more than one proxy card? It means that you have multiple accounts with brokers and/or our transfer agent. Please vote all of these shares. We recommend that you contact your broker and/or our transfer agent to consolidate as many accounts as possible under the same name and address. Our transfer agent is Computershare, Inc., which may be reached at 1 (888) 439-4986 and internationally at 1 (781) 575-2879. Will my shares be voted if I do not provide my proxy? Your shares may be voted if they are held in the name of a brokerage firm, even if you do not provide the brokerage firm with voting instructions. Brokerage firms have the authority under the New York Stock Exchange rules to vote shares for which their customers do not provide voting instructions on certain “routine” matters. The proposal to ratify the selection of KPMG LLP as our independent auditors for fiscal year 2025 is considered a routine matter for which brokerage firms may vote shares for which they have not received voting instructions. The other proposals to be voted on at our Annual Meeting are not considered “routine” under applicable rules. When a proposal is not a routine matter and the brokerage firm has not received voting instructions from the beneficial owner of the shares with respect to that proposal, the brokerage firm cannot vote the shares on that proposal. This is called a “broker non-vote.” How many votes must be present to hold the Virtual Annual Meeting? Your shares are counted as present at the Annual Meeting if you attend the Annual Meeting or if you properly return a proxy by Internet, telephone or mail. In order for us to conduct our Annual Meeting, a majority of the outstanding shares of YUM common stock, as of March 19, 2025, must be present or represented by proxy at the Annual Meeting. This is referred to as a quorum. Abstentions and broker non-votes will be counted for purposes of establishing a quorum at the Annual Meeting. How many votes are needed to elect directors? You may vote “FOR” each nominee or “AGAINST” each nominee, or “ABSTAIN” from voting on one or more nominees. Unless you mark “AGAINST” or “ABSTAIN” with respect to a particular nominee or nominees, your proxy will be voted “FOR” each of the director nominees named in this proxy statement. In an uncontested election, a nominee will be elected as a director if the number of “FOR” votes exceeds the number of “AGAINST” votes. Abstentions will be counted as present but not voted. Abstentions and broker non-votes will not affect the outcome of the vote on directors. Full details of the Company’s majority voting policy are set out in our Corporate Governance Principles at https://investors.yum.com/governance/governance-documents/ and under “What other significant Board practices does the Company have? — Majority Voting Policy” beginning at page 19. QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING How many votes are needed to approve the other proposals? The other proposals must receive the “FOR” vote of a majority of the shares, present in person or represented by proxy, and entitled to vote at the Annual Meeting. For each of these items, you may vote “FOR”, “AGAINST” or “ABSTAIN.” Abstentions will be counted as shares present and entitled to vote at the Annual Meeting. Accordingly, abstentions will have the same effect as a vote “AGAINST” the proposals. Broker non-votes will not be counted as shares present and entitled to vote with respect to the particular matter on which the broker has not voted. Thus, broker non-votes will not affect the outcome of any of these proposals When will the Company announce the voting results? The Company will announce the voting results of the Annual Meeting on a Current Report on Form 8-K filed within four business days of the Annual Meeting. What if other matters are presented for consideration at the Annual Meeting? The Company knows of no other matters to be submitted to the shareholders at the Annual Meeting, other than the proposals referred to in this Proxy Statement. If any other matters properly come before the shareholders at the Annual Meeting, it is the intention of the persons named on the proxy to vote the shares represented thereby on such matters in accordance with their best judgment.
May 15, 2025
| yum! brands, inc. | | 2025 PROXY STATEMENT |
May 15, 2025
The business and affairs of YUM are managed under the direction of the Board of Directors. The Board believes that good corporate governance is essential in achieving long-term business success and in fulfilling the Board’s duties to shareholders. The Board believes that its governance practices are strategically aligned with management objectives and the interests of shareholders. The corporate governance section of the Company's website makes available the Company’s corporate governance materials, including the Corporate Governance Principles (the “Governance Principles”), the Company’s Articles of Incorporation and Bylaws, the charters for each Board committee, the Company’s Global Code of Conduct, the Company’s Political Contributions and U.S. Government Advocacy Policy, and information about how to report concerns about the Company. To access these documents on the Company’s website, please visit, https://investors.yum.com/governance/governance-documents/.
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| GOVERNANCE HIGHLIGHTS | | | | Corporate Governance | Shareholder Rights | Compensation | | ▪ 12 Director nominees ▪ 11 Independent nominees ▪ Directors with experience, qualification and skills across a wide range of public and private sector companies ▪ Board access to senior management and independent advisors ▪ Independent non-executive chair ▪ Independent board committees ▪ Executive sessions of independent directors at every regular board and committee meeting ▪ Comprehensive risk oversight by board and its committees ▪ Annual board and committee self-evaluations ▪ All directors attended at least 75% of meetings held ▪ YUM’s Global Code of Conduct ▪ Political Contributions and U.S. Government Advocacy Policy ▪ Audit committee complaint procedures policy regarding accounting matters ▪ No hedging or pledging of company stock | ▪ Annual election of Directors ▪ Majority voting of Directors ▪ Proxy access ▪ Structured process for shareholder communication with the Board ▪ Active shareholder engagement program | ▪ Independent Management Planning and Development Committee ▪ Independent compensation consultant ▪ Executive compensation is highly performance-based to align with shareholder interests and promote company business strategy ▪ At-risk pay tied to performance ▪ Strong stock ownership guidelines ▪ No employment agreements for executive officers or guaranteed bonuses ▪ Compensation Recovery Policy (Clawback) applies to equity and bonus awards ▪ Double trigger vesting upon change in control ▪ No excise tax gross up |
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What is the composition of the Board of Directors and how often are members elected? Our Board of Directors presently consists of 12 directors whose terms expire at this Annual Meeting. The average director tenure is 8 years, with our longest- and shortest-tenured directors having served for 19 years (Mr. Nelson) and for 2 years (Mr. Biggs and Ms. Doniz), respectively. As discussed in more detail later in this section, the Board has determined that 11 of the 12 individuals standing for election are independent under the rules of the New York Stock Exchange (“NYSE”). The director tenure of the 12 individuals standing for election is reflected in the following chart:
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| | DIRECTOR TENURE | | | | | | | 0-5 Years | 6-9 Years | 10+ Years |
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How often did the Board meet in 2024? The Board of Directors met 5 times during 2024. Each of the directors who served in 2024 attended at least 75% of the meetings of the Board and the committees of which he or she was a member and that were held during the period he or she served as a director. What is the Board’s policy regarding director attendance at the Annual Meeting of Shareholders? The Board of Directors’ policy is that all directors should attend the Annual Meeting, and all persons then serving as directors attended the 2024 Annual Meeting. How does the Board select nominees for the Board? The Nominating and Governance Committee considers candidates for Board membership suggested by its members and other Board members, as well as management and shareholders. The Committee’s charter provides that it may retain a third-party executive search firm to identify candidates from time to time. In accordance with the Governance Principles, our Board seeks members from diverse professional backgrounds who combine a broad spectrum of experience and expertise with a reputation for integrity. Directors should have experience in positions with a high degree of responsibility, be leaders in the companies or institutions with which they are affiliated and are selected based upon contributions they can make to the Board and management. The Committee’s assessment of a proposed candidate will include a review of the person’s judgment, experience, independence, understanding of the Company’s business or other related industries and such other factors as the Nominating and Governance Committee determines are relevant in light of the needs of the Board of Directors. The Committee believes that its nominees should reflect a diversity of experience, gender, race, ethnicity and age. The Committee also considers such other relevant factors as it deems appropriate, including the current composition of the Board, the balance of management and independent directors, the need for Audit Committee expertise and the evaluations of other prospective nominees, if any. In connection with this evaluation, it is expected that each member of the Nominating and Governance Committee will interview the prospective nominee before the prospective nominee is presented to the full Board for consideration. After completing this evaluation and interview process, the Committee will make a recommendation to the full Board as to the person(s) who should be nominated by the Board, and the Board determines the nominee(s) after considering the recommendation and report of the Committee.
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| yum! brands, inc. | | 2025 PROXY STATEMENT |
May 15, 2025
The Company’s strategic vision is grounded in our “Recipe for Good Growth" strategy, which includes four growth drivers intended to accelerate same-store sales growth and net-new restaurant development at KFC, Pizza Hut, Taco Bell and Habit Burger & Grill around the world. The Company remains focused on building the world’s most loved, trusted and most connected restaurant brands by: Growing Unrivaled Culture and Talent to leverage our culture and people capability to fuel brand performance and franchise success; ▪ Developing Unmatched Operating Capability, by recruiting and equipping the best restaurant operators in the world to deliver great customer experiences; ▪ Building Relevant, Easy and Distinctive Brands, by innovating and elevating iconic restaurant brands people trust and champion; and ▪ Achieving Bold Restaurant Development by driving market and franchise unit expansion with strong economics and value. We look for director candidates who have the skills and experience necessary to help us achieve success with respect to the four growth drivers and the Company’s implementation of its “Recipe for Good Growth" strategy, including our continued focus on growing iconic restaurant brands globally. As a result, the skills that our directors possess are thoroughly considered to ensure that they align with the Company’s goals. The following table describes key characteristics of the Company’s “Recipe for Good Growth" strategy and indicates how the skills our Board collectively possesses positively impacts the growth drivers:
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| | Growing Unrivaled Culture and Talent, by leveraging our culture and people capability to fuel brand performance and franchise success. | | Talent Development. Experience building the knowledge, skills and abilities of employees and helping them develop and achieve their potential within an organization. | | | | | Leadership Experience. Experience as executive officer level business leader who demonstrates strong abilities to motivate and manage others and to effectively manage organizations. | | | Developing Unmatched Operating Capability, by recruiting and equipping the best restaurant operators in the world to deliver great customer experiences. | | Industry/Operations. Experience and understanding of operational and strategic issues facing large restaurant or consumer service driven companies. | | | Building Relevant, Easy and Distinctive Brands, by innovating and elevating iconic restaurant brands people trust and champion. | | Marketing/Brand Management. Experience marketing and managing well-known brands or the types of products and experiences we sell. | | | | | Technology, Digital or Cybersecurity. Experience in leadership and understanding of technology, digital platforms and new media, cybersecurity, and data analytics. | | | Achieving Bold Restaurant Development, by driving market and franchise unit expansion with strong economics. | | Global Experience. Experience at multinational companies or in international markets, which provides useful business and cultural perspectives. | | | | | Finance. Experience in public company management and financial stewardship. |
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Our “Recipe for Good Growth" strategy also provides a roadmap for growing the most loved, trusted and connected iconic brands globally. Guided by this strategy, we will strive to unlock potential in our people, grow sustainably and continue to serve delicious food that people trust. We believe that each of our directors has met the guidelines set forth in the Governance Principles. As noted in the director biographies that follow in this section, our directors have experience, qualifications and skills across a wide range of public and private companies, possessing a broad spectrum of experience both individually and collectively. In addition to the information provided in the director biographies, our director nominees’ qualifications, experiences and skills are summarized in the following matrix. This matrix is intended to provide a summary of our directors’ qualifications and should not be considered to be a complete list of each nominee’s strengths and contributions to the Board.
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| Experience/Background | | | | | | | | | | | | | | | | Leadership Experience | • | • | • | • | • | • | • | • | • | • | • | • | | | Global Experience | • | • | • | • | • | • | • | • | • | • | • | • | | | Finance | • | • | • | • | • | | • | • | | • | • | | | | Industry/Operations | | • | • | • | • | | | • | • | • | • | • | | | Marketing/Brand Management | • | • | | • | • | | • | • | | | • | • | | | Talent Development | | • | • | • | • | • | • | • | • | • | • | • | | | Technology, Digital or Cybersecurity | • | | • | | • | • | • | | | • | | • |
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Board Diversity Matrix The table below summarizes certain self-identified demographic attributes of our current directors, to the extent disclosed to us by such directors.
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| | | | | | | | | | | | | | | | Demographic Background | Asian | | | | | | | | | | | | • | | | Black or African American | • | | | | | | | | • | | | | | | Hispanic or Latinx | | | | | | • | | | | | | | | | White or Caucasian | | • | • | • | • | | • | • | | • | • | | | Gender Identity | Male | • | • | • | • | • | | | • | | • | • | | | | Female | | | | | | • | • | | • | | | • |
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For a shareholder to submit a candidate for consideration by the Nominating and Governance Committee, a shareholder must notify YUM’s Corporate Secretary, at YUM! Brands, Inc., 1441 Gardiner Lane, Louisville, Kentucky 40213. The recommendation must contain the information described on page 96.
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| yum! brands, inc. | | 2025 PROXY STATEMENT |
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Director Biographies
May 15, 2025
| | Paget L. Alves | Director Since 2016 | | | | Background Paget L. Alves is the current Chairman and Chief Executive Officer of Sorenson Communication, LLC, a global language services provider and a leader in communication solutions for Deaf and hard-of-hearing communities. Previously he served as Chief Sales Officer of Sprint Corporation, a wireless and wireline communications services provider, from January 2012 to September 2013 after serving as President of that company’s Business Markets Group beginning in 2009. Mr. Alves currently also serves on the Board of Synchrony Financial. He previously served as a Director of Assurant, Inc. and International Game Technology PLC. Specific Qualifications, Experience, Skills and Expertise: ▪ Operating, finance and management experience, including as Chief Sales Officer of a wireless and wireline communications company ▪ Global sales experience ▪ Public company directorship and committee experience | Other Public Companies ▪ Synchrony Financial Committees ▪ Audit, Chair |
May 15, 2025
| | Keith Barr | Director Since 2020 | | | | Background Keith Barr was the Chief Executive Officer of InterContinental Hotels Group plc (IHG), a predominately franchised, global organization that includes brands such as InterContinental Hotels & Resorts, Holiday Inn Family and Crowne Plaza Hotels & Resorts from July 2017 until July 2023. He also served as Chief Commercial Officer of IHG from 2013 to July 2017 and prior to that, as Chief Executive Officer of IHG’s Greater China business. Prior to this position, Mr. Barr served IHG in a number of senior positions in IHG’s Americas and Asia, Middle East and Africa (AMEA) regions. Mr. Barr currently serves on the Board of MGM Resorts International. Specific Qualifications, Experience, Skills and Expertise: ▪ Operating and management experience, including as Chief Executive Officer of a franchised, global company ▪ Expertise in strategic planning, branding and corporate leadership | Other Public Companies ▪ MGM Resorts International Committees ▪ Management Planning and Development |
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| | M. Brett Biggs | Director Since 2023 | | | | Background M. Brett Biggs is the former Executive Vice President and Chief Financial Officer for Walmart. Prior to that, Mr. Biggs served as Chief Financial Officer for Walmart International, Walmart U.S. and Sam’s Club. He was also previously the Senior Vice President of International Strategy, Mergers and Acquisitions; Senior Vice President of Corporate Finance and Senior Vice President of Operations for Sam’s Club. Before joining Walmart in 2000, Mr. Biggs held various mergers and acquisitions and corporate finance positions with Leggett & Platt, Phillips Petroleum Co. and Price Waterhouse. Mr. Biggs currently serves on the Board of Directors of Adobe, inc. and The Procter & Gamble Company. Mr. Biggs also serves as a Senior Advisor to Blackstone Inc. Specific Qualifications, Experience, Skills and Expertise: ▪ Operational and global management experience, including as Chief Financial Officer ▪ Expertise in finance, strategic planning, global branding, franchising and corporate leadership ▪ Public company directorship and committee experience | Other Public Companies ▪ Adobe, Inc. ▪ The Proctor & Gamble Company Committees ▪ Audit |
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| | Christopher M. Connor | Director Since 2017 | | | | Background Christopher M. Connor served as Chairman and Chief Executive Officer of The Sherwin-Williams Company, a global manufacturer of paint, architectural coatings, industrial finishes and associated supplies, until 2016. Mr. Connor held a number of executive positions at Sherwin-Williams beginning in 1983. He served as Chief Executive Officer from 1999 to 2015 and Chairman from 2000 to 2016. Mr. Connor currently serves on the board of International Paper Company. Mr. Connor previously served as a Director of Eaton Corporation, plc. Specific Qualifications, Experience, Skills and Expertise: ▪ Operating and management experience, including as Chairman and CEO of a Fortune 500 company ▪ Expertise in marketing, human resources, talent development, public company executive compensation, planning and operational and financial processes ▪ Public company directorship and committee experience | Other Public Companies ▪ International Paper Company Committees ▪ Management Planning and Development, Chair |
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| yum! brands, inc. | | 2025 PROXY STATEMENT |
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| | Brian C. Cornell | Director Since 2015 | | | | Background Brian C. Cornell joined the YUM Board in 2015 and has served as Non-Executive Chairperson since November 2018. Mr. Cornell is Chairperson and Chief Executive Officer of Target Corporation, a general merchandise retailer. He has held this position since August 2014. Mr. Cornell served as the Chief Executive Officer of PepsiCo Americas Foods, a division of PepsiCo, Inc. from March 2012 to July 2014. From April 2009 to January 2012, Mr. Cornell served as the Chief Executive Officer and President of Sam’s Club, a division of Wal-Mart Stores, Inc. and as an Executive Vice President of Wal-Mart Stores, Inc. He has been a Director of Target Corporation since 2014. He has previously served as a Director of Home Depot, OfficeMax, Polaris Industries Inc., Centerplate, Inc. and Kirin-Tropicana, Inc. Specific Qualifications, Experience, Skills and Expertise: ▪ Operating and management experience, including as Chairperson and Chief Executive Officer of a merchandise retailer ▪ Expertise in strategic planning, retail business, branding and corporate leadership ▪ Public company directorship experience and committee experience | Other Public Companies ▪ Target Corporation Committees ▪ Management Planning and Development ▪ Nominating and Governance |
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| | Tanya L. Domier | Director Since 2018 | | | | Background Tanya L. Domier retired as Chief Executive Officer and Chairperson of Advantage Solutions, Inc., a North American provider of outsourced sales, marketing and business solutions in April 2022. In April 2023 she founded an advisory services company focused on private equity portfolio companies. Prior to serving as Advantage Solutions’ CEO, Ms. Domier served as its President and Chief Operating Officer from 2010 to 2013. Ms. Domier joined Advantage Solutions in 1990 from the J.M. Smucker Company and has held a number of executive level roles in sales, marketing and promotions. Ms. Domier currently serves on the board of Little Leaf Farms and is a member of the compensation committee. Ms. Domier also previously served as a Director of Nordstrom, Inc. Specific Qualifications, Experience, Skills and Expertise: ▪ Operating and management experience as Chief Executive Officer ▪ Expertise in strategic planning, finance, global commerce and corporate leadership ▪ Public company directorship and committee experience | Other Public Companies ▪ None Committees ▪ Audit |
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| | Susan Doniz | Director Since 2023 | | | | Background Susan Doniz is the current Chief Information and Data Officer of The Walt Disney Company. Previously she was the Chief Information Officer and Senior Vice President of Information Technology & Data Analytics of The Boeing Company, a leading global aerospace company. Before joining Boeing in 2020, Ms. Doniz was the Group CIO of Qantas Airways and, prior to that, she served in digital transformation and IT leadership roles at SAP SE and Aimia, Inc. She also spent 17 years at The Procter & Gamble Company leading IT and analytics programs in support of sales, research and development and the supply chain. Ms. Doniz is a current adviser to the Center of Digital Transformation at the University of California, Irvine, Paul Merage School of Business. She also served as Vice Chair of the Digital Transformation Advisory Council of the International Air Transport Association, and is also a board member of multiple nonprofit organizations. Specific Qualifications, Experience, Skills and Expertise: ▪ Technology and cybersecurity experience ▪ Operating and management experience | Other Public Companies ▪ None Committees ▪ Audit |
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| | David W. Gibbs | Director Since 2019 | | | | Background David W. Gibbs is the current Chief Executive Officer of YUM. He has served in that position since January 2020. Prior to that, he served as President and Chief Operating Officer from August 2019 to December 2019, as President, Chief Operating Officer and Chief Financial Officer from January 2019 to August 2019 and as President and Chief Financial Officer from May 2016 to December 2018. Previously, Mr. Gibbs served as the Chief Executive Officer of the Company’s Pizza Hut Division from January 2015 until April 2016 and was its President from January 2014 through December 2014. Mr. Gibbs served as a director of Sally Beauty Holdings from March 2016 until January 2020. Mr. Gibbs has served as a director of Under Armour, Inc. since September 2021. Specific Qualifications, Experience, Skills and Expertise: ▪ Operational and global management experience, including as Chief Executive Officer, Chief Operating Officer and Chief Financial Officer of the Company ▪ Expertise in finance, strategic planning, global branding, franchising and corporate leadership ▪ Public company directorship and committee experience | Other Public Companies ▪ Under Armour, Inc. Committees ▪ None |
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| yum! brands, inc. | | 2025 PROXY STATEMENT |
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| | Mirian M. Graddick-Weir | Director Since 2012 | | | | Background Mirian M. Graddick-Weir retired as Executive Vice President of Human Resources for Merck & Co., Inc., a pharmaceutical company, in November 2018. She had held that position since 2008. From 2006 until 2008, she was Senior Vice President of Human Resources of Merck & Co., Inc. Prior to this position, she served as Executive Vice President of Human Resources of AT&T Corp. from 2001 to 2006. Ms. Graddick-Weir has served as a director of Booking Holdings, Inc. since June 2018. Specific Qualifications, Experience, Skills and Expertise: ▪ Management experience, including as Executive Vice President of human resources for a pharmaceutical company ▪ Expertise in global human resources, corporate governance and public company compensation ▪ Public company directorship and committee experience | Other Public Companies ▪ Booking Holdings, Inc. Committees ▪ Management Planning and Development ▪ Nominating and Governance, Chair |
May 15, 2025
| | Thomas C. Nelson | Director Since 2006 | | | | Background Thomas C. Nelson is President and Chief Executive Officer of National Gypsum Company, a building products manufacturer. He has held this position since 1999 and was elected Chairman of the Board in January 2005. From 1995 to 1999, Mr. Nelson served as the Vice Chairman and Chief Financial Officer of National Gypsum. Mr. Nelson previously worked for Morgan Stanley & Co. and in the United States Defense Department as Assistant to the Secretary and was a White House Fellow. Mr. Nelson previously served as a director of Atrium Health and the Federal Reserve Bank of Richmond. Specific Qualifications, Experience, Skills and Expertise: ▪ Operational and management experience, including as President and Chief Executive Officer of a building products manufacturer ▪ Senior government experience as Assistant to the Secretary of the United States Defense Department and as a White House Fellow ▪ Expertise in finance, strategic planning, business development and retail business ▪ Public company directorship and committee experience | Other Public Companies ▪ None Committees ▪ Management Planning and Development ▪ Nominating and Governance |
May 15, 2025
| | P. Justin Skala | Director Since 2016 | | | | Background P. Justin Skala is the current Chief Executive Officer of ZO Skin Health and was appointed to that role in March 2024. Previously he was the Executive Chairman of Standard Building Solutions. Prior to his time at Standard, Mr. Skala was the CEO of the BMI Group, having previously spent 37 years with the Colgate-Palmolive Company serving as Executive Vice-President, Chief Growth and Strategy Officer and Chief Operating Officer from 2016-2019. He was responsible for the company’s Global Sustainability program from 2013-2019 in addition to his day to day operating roles. From 2013-2016 he was President of Colgate North America and from 2010-2013 President of Colgate Latin America. From 2007-2010 he was President of Colgate – Asia. Specific Qualifications, Experience, Skills and Expertise: ▪ Global operating and management experience, including as Chief Executive Officer at a large international manufacturer and as President of major divisions of a consumer products company ▪ Expertise in branding, marketing, finance, sales, strategic planning and international business development | Other Public Companies ▪ None Committees ▪ Nominating and Governance |
May 15, 2025
| | Annie Young-Scrivner | Director Since 2020 | | | | Background Annie Young-Scrivner served as the Chief Executive Officer of Wella Company, the parent of beauty brands, including Clairol and OPI, until January 2025. Ms. Young-Scrivner was also previously the Chief Executive Officer of Godiva Chocolatier, Inc., a manufacturer of Belgian chocolates. Prior to joining Godiva in August, 2017, Ms. Young-Scrivner was Executive Vice President, Global Digital & Loyalty Development with Starbucks Corporation from 2015 until her departure in April 2017. At Starbucks, Ms. Young-Scrivner also served as President, Teavana & Executive Vice President of Global Tea from 2014 to 2015, Global Chief Marketing Officer & President of Tazo Tea from 2009 to 2012, and President of Starbucks Canada from 2012 to 2014. Prior to joining Starbucks, Ms. Young-Scrivner held senior leadership positions at PepsiCo, Inc. in sales, marketing and general management, including her role as Region President of PepsiCo Foods Greater China from 2006 to 2008. She has previously served as a director of Tiffany & Co. and Macy’s, Inc. Specific Qualifications, Experience, Skills and Expertise: ▪ Operating and management experience, including as Chief Executive Officer of consumer goods company ▪ Public company directorship and committee experience | Other Public Companies ▪ None Committees ▪ Audit |
May 15, 2025
If elected, we expect that all of the aforementioned nominees will serve as directors and hold office until the 2026 Annual Meeting of Shareholders and until their respective successors have been elected and qualified.
May 15, 2025
| yum! brands, inc. | | 2025 PROXY STATEMENT |
May 15, 2025
Director Compensation
How are directors compensated?
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option/SAR Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | | (a) | (b) | (c) | (d) | (e) | (f) | | Alves, Paget | — | 310,000 | — | — | 310,000 | | Barr, Keith | — | 280,000 | — | 10,000 | 290,000 | | Biggs, M. Brett | — | 280,000 | — | 1,257 | 281,257 | | Connor, Christopher | — | 300,000 | — | — | 300,000 | | Cornell, Brian | — | 450,000 | — | | 450,000 | | Domier, Tanya | — | 280,000 | — | | 280,000 | | Doniz, Susan | — | 280,000 | — | — | 280,000 | | Graddick-Weir, Mirian | — | 300,000 | — | — | 300,000 | | Nelson, Thomas | — | 280,000 | — | — | 280,000 | | Skala, Justin | — | 280,000 | — | — | 280,000 | | Young-Scrivner, Annie | — | 280,000 | — | — | 280,000 |
Our Performance-Based Executive Compensation Program Attracts and Retains Strong Leaders and Closely Aligns with Our Shareholders’ Interests
| Item 4 | Proposal to Approve the Company’s 2025 Long Term Incentive Plan (Item 4 on the Proxy Card) |
Our Performance-Based Executive Compensation Program Attracts and Retains Strong Leaders and Closely Aligns with Our Shareholders’ Interests
The Board recommends approval of the YUM! Brands, Inc. 2025 Long Term Incentive Plan (the “Plan”). We established the Plan to attract and retain persons who are eligible to participate in the Plan, to motivate the Plan participants, by means of appropriate incentives, to achieve long-range goals, to provide incentive compensation opportunities that are competitive with those of other similar companies, and to align the interests of the Plan participants with our shareholders. The Board approved the Plan on March 28, 2025, and the Plan, if approved by our shareholders, will replace our Long Term Incentive Plan as amended and restated effective as of May 20, 2016 (the “Prior Plan”). If the Plan is approved by shareholders, 19,000,000 shares will be available for issuance under the Plan, less the number of shares subject to awards made to participants under the Prior Plan between December 31, 2024 and the date the Plan is approved by our shareholders. We are committed to using equity incentive awards prudently, within reasonable limits, and subject to performance and service-based vesting requirements. In setting the proposed number of shares reserved and issuable under the Plan, the Board considered several factors, including the potential dilutive effect of equity awards outstanding under the Company’s prior equity compensation plans, the Company’s historical equity usage and the expected dilution of the Plan, in order to arrive at a reasonable and appropriate dilutive impact of the Plan.
Share Information on Equity Compensation Plans as of December 31, 2024
Share Information on Equity Compensation Plans as of December 31, 2024 The following table provides information regarding our outstanding equity awards and shares available for future awards under the Company’s existing equity compensation plans as of December 31, 2024 (except as otherwise noted):
Share Information on Equity Compensation Plans as of December 31, 2024
| Share Information on Equity Compensation Plans | | | Total number of stock appreciation rights (SARs) and stock options outstanding(1) | 7,727,088 | | Total number of full value awards outstanding (includes restricted stock, restricted stock units (RSUs) and performance share units (PSUs) and deferred stock units)(2) | 1,116,694 | | Total number of shares remaining available for future grant under the Prior Plan(3) | 23,866,865 | | Total number of shares of common stock outstanding as of the record date(4) | 278,517,186 |
Share Information on Equity Compensation Plans as of December 31, 2024
(1) The weighted-average exercise price of the SARs and stock options outstanding was $99.53, and the weighted-average remaining term of the stock options and SARs outstanding was 6.26 years. (2) Assumes performance-based awards will vest and pay out based on target performance levels being achieved. (3) Represents the total number of shares available for future awards under the Prior Plan reflecting performance-based awards at target payout. The Prior Plan was our only active equity compensation plan as of December 31, 2024. (4) The record date is March 19, 2025. As discussed below, if the Plan is approved, no future awards will be made under the Prior Plan. Burn Rate. We manage our long-term shareholder dilution by closely managing the number of equity awards granted annually and regularly engaging with our compensation consultant. We grant what we believe is an appropriate amount of equity necessary to attract, reward and retain employees. Burn rate is generally calculated as the number of shares granted over a set period divided by the weighted average number of shares outstanding and generally demonstrates how quickly a company uses shares available under its equity compensation plans. The following table provides our average three-year burn rate under the Prior Plan:
Share Information on Equity Compensation Plans as of December 31, 2024
| Element | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | Three-Year Average | | SARs and stock options granted | 988,000 | 1,057,000 | 1,333,000 | | | Time-based restricted stock, RSUs and deferred stock units granted (a) | 479,000 | 438,000 | 529,000 | | | Performance share units (PSUs) granted (b) | 118,000 | 100,000 | 101,000 | | | Total full-value awards ((a) + (b)) | 597,000 | 538,000 | 630,000 | | | Weighted-average basic number of shares of common stock outstanding as of fiscal-year end | 282,000,000 | 281,000,000 | 286,000,000 | | | Burn Rate | 0.56% | 0.57% | 0.69% | 0.61% |
Share Information on Equity Compensation Plans as of December 31, 2024
Total Potential Dilution. Our equity plan dilution rate (or overhang) as of December 31, 2024 was 11.7% (calculated by dividing (1) the number of shares subject to awards outstanding plus the number of shares remaining available for grant under the Prior Plan, by (2) the total number of common shares outstanding as of December 31, 2024, which was 279,097,606 shares). As of December 31, 2024, the shares remaining available under the Prior Plan, and shares subject to outstanding awards represented 8.5% and 3.2% of our current overhang, respectively. If shareholders approve the Plan, we will not issue any additional grants under the Prior Plan, and the issuance of 19,000,000 shares under the Plan would decrease our total potential dilution rate from 11.7% to approximately 10.0%. Expected Plan Duration. Based on our historic and projected future use of equity-based compensation, we estimate that the shares requested under the Plan will be sufficient to provide awards for approximately ten years. However, the actual duration of the shares reserve will depend on currently unknown factors, such as the Company’s future stock price, changes in participation, our hiring and promotion activity, future grant practices, award type mix and levels, competitive market practices, acquisitions and divestitures, the rate of returned shares due to forfeitures, the need to attract, retain and motivate key talent, the number of dividend equivalent rights outstanding and the extent to which they provide for settlement in stock, the amount and frequency of the Company’s dividend payments, and how the Company chooses to balance total compensation between cash and equity-based awards.
Overview of Plan Awards
Overview of Plan Awards The Plan authorizes the award of stock options (including incentive stock options (“ISOs”) and non-qualified stock options (“NQOs”)), stock appreciation rights (“SARs”), and “Full Value Awards” (including restricted stock awards, restricted stock unit awards, performance shares, and performance unit awards), each as described below.
Prohibition on Repricing
Prohibition on Repricing The Plan provides that, except for adjustments in connection with corporate transactions (discussed below) or as approved by our shareholders, the exercise price of an outstanding stock option or SAR may not be decreased after the date of grant, nor may an outstanding stock option or SAR be surrendered to us in consideration for the grant of a replacement stock option or SAR with a lower exercise price or a Full Value Award. Except as approved by our shareholders, in no event may any stock option or SAR granted under the Plan be surrendered to us in consideration for a cash payment if, at the time of
Shares Available Under the Plan
Shares Available Under the Plan We have reserved for issuance under the Plan a number of shares of our common stock equal to 19,000,000 less the number of shares subject to awards made to participants under the Prior Plan between December 31, 2024 and the date the Plan is approved by our shareholders. This same limit applies to the number of shares available for grants of ISOs under the Plan. Shares available under the Plan may be authorized but unissued, shares currently held or subsequently acquired by us as treasury shares (to the extent permitted by law), including shares purchased in the open market or in private transactions. Any award may be settled in cash or in shares of stock. Shares of stock covered by an award will only be counted as used to the extent that they are actually used. Each share delivered in respect of a Full Value Award is counted as covering two shares except that, in the case of restricted stock or restricted stock units delivered pursuant to the settlement of earned annual incentives, each share shall be counted as covering one share. To the extent any shares of stock covered by an award are not issued or delivered to a participant or beneficiary because the award is forfeited or cancelled, or the shares of stock are not delivered because (a) the award is forfeited or cancelled, (b) the award is settled in cash, (c) the shares are used to satisfy the applicable tax withholding obligation or to pay the exercise price of an option (whether through net settlement or otherwise), (d) the shares were subject to a stock-settled SAR that were not issued upon the exercise of such SAR or (e) because the shares were repurchased on the open market with the proceeds of the exercise price of an option, such shares shall not be deemed to have been delivered for purposes of determining the maximum number of shares of stock available for delivery under the Plan. If the exercise price of any stock option granted under the Plan is satisfied by tendering shares of our common stock (by either actual delivery or by attestation, including net exercise), only the number of shares of stock issued net of the shares tendered shall be deemed delivered for purposes of the Plan. On December 31, 2024, the last reported sale price of our common stock in composite transactions for NYSE-listed securities was $134.16 per share.
Adjustments
Adjustments If any (a) change in corporate capitalization, such as a stock split, reverse stock split, or stock dividend, (b) corporate transaction such as a reorganization, reclassification, merger or consolidation or separation, including a spin-off, or sale or other disposition by us of all or a portion of our assets, (c) other change in our corporate structure, or any distribution to shareholders (other than a cash dividend that is not an extraordinary cash dividend) results (x) in the outstanding shares of our common stock, or any securities exchanged therefor or received in their place, being exchanged for a different number or class of shares or other securities of us or for shares of stock or other securities of any other corporation (or new, different or additional shares or other securities of us or of any other corporation being received by the holders of outstanding shares of our common stock), or (y) a material change in the market value of the outstanding shares of our common stock as a result of the change, transaction or distribution, then equitable adjustments shall be made by the Committee, as it determines are necessary and appropriate, in: (i) the number and type of shares (or other property) with respect to which awards may be granted under the Plan, (ii) the number and type of shares (or other property) subject to outstanding awards, (iii) the grant or exercise price with respect to outstanding awards, (iv) (d) the limitations on shares reserved for issuance under the Plan and the limitations on the number of shares (or dollar amount) that can be subject to awards granted to certain individuals or within a specified time period, and (v) the terms, conditions or restrictions of outstanding awards and/or award agreements. In the case of any stock option that is an ISO, any adjustments in accordance with the foregoing shall be accomplished so that such stock option shall continue to be an ISO and there are restrictions on the type and manner of adjustment to awards to ensure compliance with Code Section 409A (relating to nonqualified deferred compensation).
Stock Options and SARs
Stock Options and SARs The grant of a stock option under the Plan entitles the participant to purchase shares of our common stock at an exercise price and during a specified time established by the Committee. Any stock option may be either an ISO or an NQO, as determined in the discretion of the Committee. An “ISO” is a stock option that is intended to satisfy the requirements applicable to an “incentive stock option” described in Code Section 422(b) and may only be granted to employees of us or our eligible subsidiaries. An “NQO” is a stock option that is not intended to be an ISO. A stock option will be deemed to be an
Stock Options and SARs
| yum! brands, inc. | | 2025 PROXY STATEMENT |
Stock Options and SARs
NQO unless it is specifically designated by the Committee as an ISO and/or to the extent that it does not meet the requirements of an ISO. Any stock option that is intended to constitute an ISO shall satisfy any other requirements of Code Section 422 and, to the extent such stock option does not satisfy such requirements, the stock option shall be treated as an NQO. A SAR entitles the participant to receive, in cash or stock, value equal to (or otherwise based on) the excess of: (a) the fair market value of a specified number of shares of our common stock at the time of exercise; over (b) an exercise price established by the Committee. The Committee shall designate the participants to whom stock options or SARs are to be granted and shall determine the number of shares of stock subject to each such stock option or SAR and the other terms and conditions thereof, not inconsistent with the Plan. The Committee may not, however, grant dividends or dividend equivalents (current or deferred) with respect to any stock option or SAR granted under the Plan. In no event shall a stock option or SAR be exercisable later than the ten-year anniversary of the date on which the stock option or SAR is granted (or such shorter period required by law or the rules of any stock exchange on which the stock is listed). The “exercise price” of each stock option or SAR granted shall be established by the Committee or shall be determined by a method established by the Committee at the time the stock option or SAR is granted, except that the exercise price shall not be less than the fair market value of a share of stock on the date of grant. Stock options and SARs granted under the Plan in replacement for awards under plans and arrangements of us or one of our subsidiaries that are assumed in business combinations may provide for exercise prices that are less than the fair market value of the stock at the time of the replacement grants, if the Committee determines that such exercise price is appropriate to preserve the economic benefit of the award. The exercise price of a stock option shall be payable in cash or by tendering (including by way of a net exercise), by either actual delivery of shares or by attestation, shares of stock acceptable to the Committee, and valued at fair market value as of the day of exercise, or in any combination thereof, as determined by the Committee. The Committee may permit a participant to elect to pay the exercise price upon the exercise of a stock option by irrevocably authorizing a third party to sell shares of stock (or a sufficient portion of the shares) acquired upon exercise of the stock option and remit to us a sufficient portion of the sale proceeds to pay the entire exercise price and any tax withholding resulting from such exercise. Generally, the full exercise price for shares of common stock purchased upon the exercise shall be paid at the time of such exercise (except that, in the case of a third party exercise arrangement described above, payment may be made as soon as practicable after the exercise).
Full Value Awards
Full Value Awards A Full Value Award is a grant of one or more shares of our common stock or a right to receive one or more shares of our common stock in the future (including restricted stock, restricted stock units, performance shares, and performance units) that is contingent on continuing service (or no service), the achievement of performance objectives during a specified period of performance, or other restrictions as determined by the Committee. The grant of Full Value Awards may also be subject to such other conditions, restrictions and contingencies, as determined by the Committee, including provisions relating to dividend or dividend equivalent rights and deferred payment or settlement; provided, however, that no dividends or dividend equivalent rights will be paid or settled on Full Value Awards that have not been earned or vested.
Change in Control
Change in Control Subject to the provisions of the Plan relating to adjustments in the context of corporate transactions and unless otherwise specifically prohibited under applicable laws or by the rules and regulations of any applicable governmental agencies or national securities exchange, or unless otherwise provided by the Committee in the award agreement or in an individual severance, employment or other agreement between us and a Plan participant, the following provisions shall apply to awards in the event of a Change in Control.
Performance Awards
Performance Awards Upon a Change in Control, (a) any performance conditions applicable to outstanding Full Value Awards with performance periods beginning prior to the year in which the Change in Control occurs will be deemed to have been achieved at the higher of (i) the target level of performance for the performance period in effect on the date of the Change in Control or (ii) the actual level of performance measured as of the date of the Change in Control, (b) any performance conditions applicable to outstanding Full Value Awards with performance periods beginning during the year in which the Change in Control occurs will be deemed to have been achieved at the target level of performance for the performance period in effect on the date of the Change in Control, (c) in any case, such awards will thereafter not be subject to any performance conditions, and (d) except as otherwise provided, any service-based conditions applicable to such awards will continue to apply as if the Change in Control had not occurred.
Continuation, Assumption, and/or Replacement of Awards
Continuation, Assumption, and/or Replacement of Awards If, upon a Change in Control, then outstanding awards under the Plan are continued under the Plan or are assumed by a successor to us and/or awards in other shares or securities are substituted for then outstanding awards under the Plan (which continued, assumed, and/or substituted awards are referred to collectively herein as “Replacement Awards”) then, each Replacement Award will continue in accordance with its terms. In the case of any participant whose termination date has not occurred as of the date of the Change in Control, if the participant’s termination date occurs by reason of termination by us without cause on or within twenty four months following the Change in Control, then (a) all of the participant’s outstanding Replacement Awards that are Full Value Awards will be fully vested upon his or her termination date, subject to the terms of the award agreement, and generally will be settled or paid within thirty days after the termination date and (b) in the case of any Replacement Awards that are stock options or SARs, the Replacement Award will be fully vested and exercisable as of the termination date and the exercise period will extend for three years following the termination date or, if earlier, the expiration date of the stock option or SAR.
Stock Options
Stock Options The tax treatment of a stock option depends on whether the option is a an NQO or an ISO. The grant of an NQO will not result in taxable income to the participant. Except as described below, the participant will realize ordinary income at the time of exercise in an amount equal to the excess of the fair market value of the shares of stock acquired over the exercise price for those shares of common stock, and we will be entitled to a corresponding deduction. The grant of an ISO will not result in taxable income to the participant. The exercise of an ISO will not result in taxable income to the participant provided that the participant was, without a break in service, an employee of us or our eligible subsidiaries (determined under tax rules) during the period beginning on the date of the grant of the ISO and ending on the date three months prior to the date of exercise (one year prior to the date of exercise if the participant is disabled, as that term is defined in the Code). The excess of the fair market value of the shares of common stock at the time of the exercise of an ISO over the exercise price is an adjustment that is included in the calculation of the participant’s alternative minimum taxable income for the tax year in which the ISO is exercised. For purposes of determining the participant’s alternative minimum tax liability for the year of disposition of the shares of common stock acquired pursuant to the ISO exercise, the participant will have a basis in those shares of common stock equal to the fair market value of the shares of common stock at the time of exercise. If the participant does not sell or otherwise dispose of the shares of common stock within two years from the date of the grant of the ISO or within one year after receiving the transfer of such shares of common stock, then, upon disposition of such shares of common stock, any amount realized in excess of the exercise price will be taxed to the participant as capital gain, and we will not be entitled to any deduction for Federal income tax purposes. If the foregoing holding period requirements are not met, the participant will generally realize ordinary income, and a corresponding deduction will be allowed to us, at the time of the disposition of the shares of common stock, in an amount equal to the lesser of (a) the excess of the fair market value of the shares of common stock on the date of exercise over the exercise price, or (b) the excess, if any, of the amount realized upon disposition of the shares of common stock over the exercise price. Special rules apply if an option is exercised through the exchange of previously acquired stock.
Stock Options
| yum! brands, inc. | | 2025 PROXY STATEMENT |
Full Value Awards
Full Value Awards The federal income tax consequences of a Full Value Award will depend on the type of award. The tax treatment of the grant of shares of common stock depends on whether the shares are subject to a substantial risk of forfeiture (determined under Code rules) at the time of the grant. If the shares are subject to a substantial risk of forfeiture, the participant will not recognize taxable income at the time of the grant and when the restrictions on the shares lapse (that is, when the shares are no longer subject to a substantial risk of forfeiture), the participant will recognize ordinary taxable income in an amount equal to the fair market value of the shares at that time. If the shares are not subject to a substantial risk of forfeiture or if the participant elects to be taxed at the time of the grant of such shares under Code Section 83(b), the participant will recognize taxable income at the time of the grant of shares in an amount equal to the fair market value of such shares at that time, determined without regard to any of the restrictions. If the shares are forfeited before the restrictions lapse, the participant will be entitled to no deduction on account thereof. The participant’s tax basis in the shares is the amount recognized by him or her as income attributable to such shares. Gain or loss recognized by the participant on a subsequent disposition of any such shares is capital gain or loss if the shares are otherwise capital assets. In the case of other Full Value Awards, such as restricted stock units or performance stock units, the participant generally will not have taxable income upon the grant of the award provided that there are restrictions on such awards that constitute a substantial risk of forfeiture under applicable Code rules. Participants will generally recognize ordinary income when the restrictions on awards lapse, on the date of grant if there are no such restrictions or, in certain cases, when the award is settled. At that time, the participant will recognize taxable income equal to the cash or the then fair market value of the shares issuable in payment of such award, and such amount will be the tax basis for any shares received. In the case of an award which does not constitute property at the time of grant (such as an award of units), participants will generally recognize ordinary income when the award is paid or settled. We generally will be entitled to a tax deduction in the same amount, and at the same time, as the income is recognized by the participant. The foregoing provides only a general description of the application of federal income tax laws to certain awards under the Plan. This discussion is intended for the information of stockholders considering how to vote at the Annual Meeting and not as tax guidance to participants in the Plan, as the consequences may vary with the types of awards made, the identity of the recipients and the method of payment or settlement.
C. Compensation Philosophy
| | Pay Element | | | | Objective | Base Salary | Annual Performance-Based Cash Bonuses | Long-Term Equity Performance-Based Incentives | | Attract and retain the best talent to achieve superior shareholder results—To be consistently better than our competitors, we need to recruit and retain superior talent — individuals who are able to drive superior results. We have structured our compensation programs to be competitive and to motivate and reward high performers. | ü | ü | ü | | Reward performance—The majority of NEO pay is performance-based and therefore at risk. We design pay programs that incorporate team and individual performance goals that lead to shareholder return. | | ü | ü | | Emphasize long-term value creation—Our belief is simple: if we create value for shareholders, then we share a portion of that value with those responsible for the results. | | | ü | | Drive ownership mentality—We require executives to invest in the Company’s success by owning a substantial amount of Company stock. | | | ü |
E. Relationship between Company Pay and Performance for the CEO
| CEO Target Pay Mix–2024 | CEO Total Direct Compensation | | | The Committee sets the CEO’s target for total direct compensation (base salary, annual cash bonus and annual long-term incentive award value at grant date) taking into account Company performance, the CEO’s performance, time in role, other job-related factors and the range of market practices of our Executive Peer Group. The Committee was satisfied with Company results and the leadership of Mr. Gibbs in 2023 and expected that the Company would continue to build on that momentum in 2024. In January 2024, Mr. Gibbs’ target total direct compensation was set between the 50th and 75th percentiles of our Executive Peer Group. For 2024, approximately 76% of our CEO’s target total direct compensation was in the form of long-term equity incentive compensation. |
E. Relationship between Company Pay and Performance for the CEO
(1) Core Operating Profit Growth is a measure of results of operations for the purpose of evaluating performance against targets set under our YUM Leaders’ Bonus Program and the annual PSU grants in 2024, 2023 and 2022. See pages 31-32 and 36-38 in Item 7 of YUM’s Form 10-K for the fiscal year ended on December 31, 2024 for a discussion of Core Operating Profit in 2024. For 2024, Core Operating Profit as referenced above excludes the impact of a 53rd week. (2) System sales growth as referenced above excludes the impact of foreign currency translation and is a measure in annual PSU grants awarded in 2022, 2023 and 2024 and excludes the impact of a 53rd week in 2024. (3) Total shareholder return is calculated as the change in YUM share price from the beginning of the respective year until the year-end, adjusted for dividends paid. II. Elements of Executive Compensation Program Our annual executive compensation program has three primary pay components: base salary; annual performance-based cash bonuses; and long-term equity performance-based incentives. We also offer retirement and other benefits.
E. Relationship between Company Pay and Performance for the CEO
| Element | Objective | Form | | Base salary | Attract and retain high-caliber talent and provide a fixed level of cash compensation | Cash | | Annual Performance-Based Cash Bonuses | Motivate high performance and reward short-term Company, team and individual performance | Cash | | Long-Term Equity Performance-Based Incentives | Align the interests of executives with shareholders and emphasize long-term results | SARs, RSUs & PSUs | | Retirement and Additional Benefits | Provide for long-term retirement income and basic health and welfare coverage | Various |
E. Relationship between Company Pay and Performance for the CEO
A. Base Salary We provide base salary to compensate our NEOs for their primary roles and responsibilities and to provide a stable level of annual compensation. A NEO’s salary varies based on the role, level of responsibility, experience, individual performance, potential and market value. Specific salary increases take into account these factors. The Committee reviews each NEO’s salary and performance annually. B. Annual Performance-Based Cash Bonuses Our performance-based annual bonus program, the YUM Leaders’ Bonus Program, is a cash-based plan. The principal purpose of the YUM Leaders’ Bonus Program is to motivate and reward short-term team and individual performance that drives shareholder value. The formula for calculating the performance-based annual bonus under the YUM Leaders’ Bonus Program is the product of the following:
Team Performance
A leverage formula for each team performance measure magnifies the potential impact that performance above or below the performance target will have on the calculation of the annual bonus. This leverage increases the payouts when targets are exceeded and reduces payouts when performance is below target. There is a threshold level of performance for all measures that must be met in order for any bonus to be paid, absent the use of discretion by the Committee in extraordinary circumstances. These minimum threshold performance targets are set forth in the Team Performance table that follows. Additionally, all measures have a cap on the level of performance over which no additional bonus will be paid regardless of performance above the cap. The maximum performance cap for each measure is also set forth in the Team Performance table below. The Committee may approve adjustments to Division targets or may exclude certain pre-established items from the financial results used to determine the annual bonus when doing so is consistent with the objectives and intent at the time the targets were originally set, in order to focus executives on the fundamentals of the Company’s underlying business performance. As part of the 2024 target-setting process, the Committee decided that KFC, Pizza Hut, Taco Bell, Habit and/or YUM Operating Profit Growth performance for 2024 annual incentive purposes should be measured adjusting for certain factors that were not considered indicative of underlying business performance for the year. These factors included amounts associated with Special Items (as defined in our 2024 Form 10-K at pages 32 and 36) and foreign currency translation.
Individual Performance
Individual Performance Each NEO’s individual performance factor is determined by the Committee based upon its subjective determination of the NEO’s individual performance for the year, including consideration of specific objective individual performance goals set at the beginning of the year. Performance categories considered by the Committee include the NEO’s performance in: Fostering Unrivaled Culture and Talent; Driving Bold Restaurant Development and Returns; Building Relevant, Easy and Distinctive Brands; Developing Unmatched Operating Capability; Driving ESG Progress in Key Areas of People, Food and Planet; and Delivering on Shareholder Promises. The Committee’s determinations with respect to the individual performance of our NEOs is set forth below from pages 60 to 64. C. Long-Term Equity Performance- and Time-Based Incentives We provide performance- and time-based equity awards weighted 75% and 25% respectively to our NEOs. These awards are designed to encourage long-term decision making that creates shareholder value, as well as to foster retention of executive talent. We use equity vehicles that motivate and balance the tradeoffs between short-term and long-term performance. Our NEOs are awarded long-term incentives annually based on the Committee’s subjective assessment of the following items for each NEO (without assigning weight to any particular item): ▪ Prior year individual and team performance ▪ Expected contribution in future years ▪ Consideration of the market value of the executive’s role compared with similar roles in our Executive Peer Group ▪ Retention considerations ▪ Achievement of stock ownership guidelines
Equity Mix
Equity Mix Each year, the Committee reviews the mix of long-term incentives. For 2024, the Committee continued to choose SAR, RSU and PSU awards, because these equity vehicles focus and reward management for enhancing long-term shareholder value, thereby aligning our NEOs with the interests of our shareholders. At the beginning of 2024, the Committee determined a target grant value for each NEO (based on time in role, performance and market practice) and the split of that value between SAR, RSU and PSU grants. For each NEO, the target grant value was allocated 25% to SAR, 25% to RSU and 50% to PSU grants. For each NEO, the breakdown between SAR, RSU and PSU award values can be found under the Summary Compensation Table, page 73 at columns e and f.
Restricted Stock Unit Awards
Restricted Stock Unit Awards Under our LTIP, we also granted our NEOs RSU awards in 2024. Like SARs, these RSU awards vest ratably over a four-year period at 25% per-year. The Committee believes that having RSUs in the compensation mix is appropriate to incentivize and retain executives and is consistent with shareholder preferences and market practice.
Performance Share Awards
Performance Share Awards Pursuant to the Performance Share Plan under our LTIP, we granted our NEOs PSU awards in 2024. These PSU awards are earned based on performance against target metrics which include 50% System Sales Growth and 50% Core Operating Profit Growth, with a TSR modifier relative to the S&P 500 Consumer Discretionary Index. The TSR modifier can increase or decrease earned payouts by up to 25% (but cannot result in a payout exceeding 200%). Incorporating System Sales Growth, Core Operating Profit Growth and TSR supports the Company’s pay-for-performance philosophy while diversifying performance criteria by using certain measures not used in the annual bonus plan and aligning our NEOs’ reward with the creation of shareholder value. The target, threshold and maximum number of shares that may be paid under these awards for each NEO are described at page 75. For the performance period covering 2024 – 2026, each NEO will earn a percentage of his or her target PSU award, with 50% of the payout based on System Sales Growth and the other 50% based on Core Operating Profit Growth targets, with a TSR modifier relative to the S&P 500 Consumer Discretionary Index, as set forth in the table below:
Performance Share Awards
| 50% SYSTEM SALES GROWTH | | | 50% CORE OPERATING PROFIT GROWTH | | TSR RELATIVE TO S&P 500 CONSUMER DISCRETIONARY INDEX | | | 2024-2026 CAGR | Payout % | | 2024-2026 CAGR | Payout % | TSR Percentile Ranking | Modifier % | | 10% | 200% | | 12.75% | 200% | >79th | 1.250 | | 8.5% | 150% | + | 10.50% | 150%X | 60th – 79th | 1.125 | | 7% | 100% | | 8.25% | 100% | 40th – 59th | 1.000 | | 4% | 35% | | 4.25% | 35% | 20th – 39th | 0.875 | | <4% | 0% | | <4.25% | 0% | <20th | 0.750 |
Performance Share Awards
Dividend equivalents will accrue during the performance period and will be distributed as additional shares but only in the same proportion and at the same time as the original awards are earned. If no shares are earned, no dividend equivalents will be paid. III. 2024 Named Executive Officer Total Direct Compensation and Performance Summary Below is a summary of each of our NEOs’ total direct compensation – which generally includes base salary, annual cash bonus, and long-term incentive awards – and an overview of their 2024 performance relative to our annual and long-term incentive performance goals. The process the Committee used to determine each officer’s 2024 compensation is described more fully in “How Compensation Decisions Are Made” beginning on page 66. CEO Compensation
Performance Share Awards
| David Gibbs Chief Executive Officer |
2024 Committee Decisions
2024 Committee Decisions In January, the Committee made the following determinations with respect to Mr. Gibbs’ compensation: ▪ Base salary remained at $1,300,000; ▪ Annual cash bonus target percentage remained at 200% of base salary; ▪ Grant value of annual long-term incentive equity awards was increased to $12,000,000; ▪ This increase was intended to recognize his performance, time in role, and to better align with market compensation norms. These decisions regarding the components of the Company’s annual executive compensation program positioned Mr. Gibbs’ 2024 target total direct compensation between the 50th percentile and 75th percentile of the Company’s Executive Peer Group (defined at page 68) for his position.
2024 Committee Decisions
2024 Committee Decisions In January, the Committee made the following determinations with respect to Mr. Sami’s compensation: ▪ Base salary was increased to $850,000; ▪ Annual cash bonus target increased to 120% of base salary; ▪ Grant value of annual long-term incentive equity awards was increased to $2,500,000; These adjustments were intended to recognize his performance, time in role and to better align with market compensation norms and internal peer equity. These adjustments positioned Mr. Sami’s 2024 total direct compensation slightly below the 50th percentile of the Company’s Executive Peer Group (defined at page 55) for his position.
2024 Committee Decisions
2024 Committee Decisions In January, the Committee made the following determinations with respect to Ms. Skeans’ compensation: ▪ Base salary was increased to $925,000; ▪ Annual cash bonus target remained at 120% of base salary; ▪ Grant value of annual long-term incentive equity awards increased to $2,850,000; These adjustments were intended to recognize her performance and to better align with market compensation norms and internal peer equity. These adjustments positioned Ms. Skeans’ 2024 total direct compensation between the 50th and 75th percentiles of the Company’s Executive Peer Group (defined at page 58) for her position.
2024 Committee Decisions
2024 Committee Decisions In January, the Committee made the following determinations with respect to Mr. Tresvant’s compensation: ▪ Base salary was increased to $750,000; ▪ Annual cash bonus target percentage was increased to 110% of base salary; ▪ Grant value of annual long-term incentive equity awards was increased to $2,000,000; These adjustments were intended to recognize his promotion to CEO of Taco Bell, performance in prior role and to better align with market compensation norms and internal peer equity. These decisions positioned Mr. Tresvant’s 2024 total direct compensation slightly below the 50th percentile of the Company’s Executive Peer Group (defined at page 68) for his position.
2024 Committee Decisions
2024 Committee Decisions In January, the Committee made the following determinations with respect to Mr. Catlett’s compensation: ▪ Base salary was increased to $775,000; ▪ Annual cash bonus target increased to 105% of base salary; ▪ Grant value of annual long-term incentive equity awards increased to $2,350,000; These adjustments were intended to recognize his performance and to better align with market compensation norms and internal peer equity. These adjustments positioned Mr. Catlett’s 2024 total direct compensation above the 75th percentile of the Company’s Executive Peer Group (defined at page 68) for his position. Mr. Catlett’s base salary and annual cash bonus compensation remained unchanged during the period where he served as a special advisor to the Company prior to his departure, except that he did not receive long-term incentive equity awards in 2025. IV. Retirement and Other Benefits
Retirement Benefits
Retirement Benefits We offer several types of competitive retirement benefits. The YUM! Brands Retirement Plan (“Retirement Plan”) is a broad-based qualified plan designed to provide a retirement income based on years of service with the Company and average annual earnings. The plan is U.S.-based and was closed to new salaried entrants in 2001. Mr. Gibbs and Ms. Skeans are active participants in the Retirement Plan. For executives hired or re-hired after September 30, 2001, the Company implemented the Leadership Retirement Plan (“LRP”). This is an unfunded, unsecured account-based retirement plan which allocates a percentage of pay to an account payable to the executive following the executive’s separation of employment from the Company. For 2024, Messrs. Turner, Tresvant and Catlett were eligible for LRP. Under LRP, Messrs. Turner, Tresvant and Catlett received an annual allocation to their accounts equal to a percentage of their base salary and target bonus (4% for Messrs. Turner and Tresvant and 8% for Mr. Catlett) and will receive an annual earnings credit that is equivalent to the Moody’s Aa Corporate Bond Yield Average for maturities 20 years and above (5.05% as of December 31, 2024) on the balance. The Company provides retirement benefits for certain international employees through the Third Country National Plan (“TCN”). TCN is an unfunded, unsecured account-based retirement plan that provides an annual contribution between 7.5% and 15% of salary and target bonus and an annual earnings credit of 5% on the balance. The level of contribution is based on the participants’ role and their home country retirement plan. Mr. Sami is the only NEO who participated in TCN. Under this plan, Mr. Sami received an annual contribution equal to 15% of base salary and target bonus and an annual earnings credit of 5% prior to his departure from the Company. Benefits payable under these plans are described in more detail beginning on page 78.
Shareholder Outreach, Engagement and 2024 Advisory Vote on NEO Compensation
Shareholder Outreach, Engagement and 2024 Advisory Vote on NEO Compensation At our 2024 Annual Meeting of Shareholders, 92% of votes cast on our annual advisory vote on NEO compensation were in favor of our NEOs’ compensation program as detailed in our 2024 proxy statement. During 2024, we continued our shareholder outreach program to better understand our investors’ opinions on our compensation practices and respond to their questions. Committee members and management team members from compensation, investor relations and legal continued to be directly involved in engagement efforts that served to reinforce our open-door policy. The efforts included: ▪ Contacting our largest 35 shareholders, representing ownership of more than 60% of our shares; ▪ Dialogue with proxy advisory firms; ▪ Investor road shows and conferences; and ▪ Presenting shareholder feedback to the Committee. Our annual engagement efforts allow many shareholders the opportunity to provide feedback. The Committee carefully considers shareholder and advisor feedback, among other factors discussed in this CD&A, in making its compensation decisions. Shareholder feedback, including the 2024 voting results on NEO compensation, has influenced and reinforced a number of compensation design changes over the years, including: ▪ Added a 50% holding requirement to the stock ownership guidelines applicable to approximately 200 of our senior employees, including the NEOs. ▪ Continued benchmarking of CEO compensation between the 50th percentile and 75th percentile of our Executive Peer Group. ▪ Changed performance metrics under our annual PSU awards (Earnings Per Share and/or TSR in prior years; Core Operating Profit Growth, System Sales Growth and TSR since 2022). ▪ Changed PSU award metrics to include the Company’s 3-year average TSR relative to the companies in the S&P 500 Consumer Discretionary Index, rather than the average relative to the entire S&P 500. ▪ Beginning in 2022, changing our equity mix for NEOs to 50% PSUs, 25% SARs and 25% RSUs, to better align with business objectives, shareholder preferences and market practice. ▪ Added the “Driving ESG in Key Areas of People, Food and Planet” goal as an individual factor metric under our annual cash bonus plan. The Company and the Committee appreciate the feedback from our shareholders and plan to continue these engagement efforts going forward.
COMMITTEE ANNUAL COMPENSATION PROCESS
| • Approves bonus and performance share plan 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 | authority to continue or terminate its relationship with outside advisors, including consultant • Reviews and approves inclusion of CD&A in proxy statement | • Evaluates feedback from shareholders and proxy advisors | leverage recommendations for the following year • Reviews market analysis of Director compensation and makes recommendations to Board |
Role of the Independent Consultant
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; and ▪ 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
Comparator Compensation Data Our Committee evaluates our NEO total target direct compensation levels by comparing them against those of similarly situated executives at companies that comprise our Executive Peer Group (defined below) as one of the factors in setting executive compensation. The Executive Peer Group is made up of retail, hospitality, food, nondurable consumer goods companies, specialty 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 many cases global reach. In addition to the Executive Peer Group, beginning with our 2025 NEO compensation, the Committee may also consider the compensation of chief executive officers at smaller restaurant companies in making its pay decisions, as the Company’s senior executives are often seen as attractive candidates for chief executive officer roles at such companies. This information is useful to the Committee given the Company’s long track record of success in developing capable leaders who are often approached for the top leadership roles at other, smaller restaurant companies. By considering this information in connection with the Executive Peer Group, the Committee may be better positioned to retain talent that is highly sought after, critical to YUM achieving its strategies and/or potential candidates for our CEO role.
Executive Peer Group
Executive Peer Group The Committee periodically reviews the peer group to ensure it reflects desired comparisons and appropriate size range. In August 2021, the Committee approved the peer group to be used for NEO pay determinations beginning in 2022 (the “Executive Peer Group”). The updates to the Executive Peer Group were made to better align the size of the peer group companies with YUM and include companies in relevant industry sectors. Many of these companies have a global reach
Executive Peer Group
| yum! brands, inc. | | 2025 PROXY STATEMENT |
Executive Peer Group
and multiple brands. The Executive Peer Group used for 2024 pay determinations for all NEOs is comprised of the following companies:
Executive Peer Group
| Bath & Body Works, Inc.(1) | Domino's Pizza, Inc. | Kimberly-Clark Corporation | Mondelez International, Inc. | | Chipotle Mexican Grill, Inc. | The Estee Lauder Companies, Inc. | The Kraft Heinz Corporation | Ralph Lauren Corporation | | The Coca Cola Company | General Mills, Inc. | Lululemon Athletica | Restaurant Brands International, Inc. | | Colgate-Palmolive Company | Hilton Worldwide Holdings, Inc. | Marriott International, Inc. | Starbucks Corporation | | Darden Restaurants, Inc. | Kellogg Company | McDonald's Corporation | V.F. Corporation |
Executive Peer Group
(1) Effective for NEO pay determinations in 2025, Bath and Body Works, Inc. was removed from the Executive Peer Group. At the time a benchmarking analysis was prepared in November 2023, the Executive Peer Group’s median annual revenues were $13.7 billion, while YUM equivalent annual revenues were estimated at $17.8 billion (calculated as described below). For companies with significant and global franchise operations, measuring size can be complex. In 2023, the Company’s system of global restaurants delivered approximately $60 billion in system sales. Management responsibilities encompass more than just the revenues and operations directly owned and operated by the Company and include responsibilities for managing relationships with franchisees and developing and implementing global growth strategies. Specific responsibilities include managing and implementing product introductions and product specifications and supply, management of vendors, marketing, technological innovations and implementations, payment collections, risk management, including setting and monitoring food safety standards, protection of the Company’s trademarks and other intellectual property, new unit development, and customer satisfaction and overall operations improvements across the entire franchise system. As a result of accelerating growth in recent years, the Company’s leadership now oversees approximately 290 brand-country combinations and approximately 1,500 franchisees. To appropriately reflect this complexity in calibrating the size of our organization and underlying operating divisions during the 2023 benchmarking process, our philosophy was to add 25% of franchisee and licensee sales to the GAAP-reported Company sales to establish an appropriate revenue benchmark. The reason for this approach was twofold: ▪ Market-competitive compensation opportunities are related to scope of responsibility, often measured by company size, i.e., revenues; and ▪ Scope of responsibility for a franchising organization lies between corporate-reported revenues and system-wide sales. Peer groups of other globally prominent companies similarly include companies where the median revenue scope of those peers are materially above the reported corporate revenue. This likely reflects the same assessments of complexity and reach and accordingly appropriate company size profiles. We believe this approach is measured and reasoned in its approach to calibrating market competitive compensation opportunities without using organizations unduly larger than the Company.
Competitive Positioning and Setting Compensation
Competitive Positioning and Setting Compensation At the beginning of 2024, the Committee considered Executive Peer Group compensation data as a frame of reference for establishing compensation targets for base salary, annual cash bonus and long-term incentive awards for each NEO. In making compensation decisions, the Committee considers market data for comparable positions to each of our NEO roles. The Committee reviews market data and makes a decision for each NEO, most often in a range around market median for each element of compensation, including base salary, target bonus and target long-term incentive award value. In addition to the market data, the Committee takes into account the role, level of responsibility, experience, individual performance and potential of each NEO. The Committee reviews the NEOs’ compensation and performance annually. VI. Compensation Policies and Practices Below are compensation and governance best practices we employ that provide a foundation for our pay-for-performance program and align our program with Company and shareholder interests.
Competitive Positioning and Setting Compensation
| We Do | | We Don’t Do | | | | Have an independent compensation committee (Management Planning & Development Committee), which oversees the Company’s compensation policies and strategic direction | | Employment agreements for NEOs and executive officers | | | Directly link Company performance to pay outcomes | | Re-pricing of SARs | | | Have executive ownership guidelines that are reviewed annually against Company guidelines | | Grants of SARs with exercise price less than fair market value of common stock on date of grant | | | Have a “clawback” policy under which the Company may recoup compensation if executive’s conduct results in significant financial or reputational harm to Company or in the event of a financial restatement | | Permit executives to hedge or pledge Company stock | | | Make a substantial portion of NEO target pay “at risk” | | Payment of dividends or dividend equivalents on PSUs unless or until they vest | | | Have double-trigger vesting of equity awards upon a change in control | | Excise tax gross-ups upon change in control | | | Utilize an independent Compensation Consultant | | Excessive executive perquisites, such as country club memberships | | | Incorporate comprehensive risk mitigation into plan design | | | | | Periodically review our Executive Peer Group to align appropriately with Company size and complexity | | | | | Evaluate CEO and executive succession plans | | | | | Conduct annual shareholder engagement program to obtain feedback from shareholders for consideration in annual compensation program design | | |
Payments upon Termination of Employment
Payments upon Termination of Employment The Company does not have agreements with its executives concerning payments upon termination of employment except in the case of a change in control of the Company. The Committee believes these are appropriate agreements for retaining NEOs and other executive officers to preserve shareholder value in case of a potential change in control. The Committee periodically reviews these agreements and other aspects of the Company’s change-in-control program. The Company’s change-in-control agreements, in general, entitle certain executives who are direct reports to our CEO and are terminated other than for cause within two years of the change in control, to receive a benefit of two times salary and bonus. The terms of these change-in-control agreements are described beginning on page 84. The Company does not provide tax gross-ups for executives, including the NEOs, for any excise tax due under Section 4999 of the Internal Revenue Code and has implemented a “best net after-tax” approach to address any potential excise tax imposed on executives. If any excise tax is due, the Company will not make a gross-up payment, but instead will reduce payments to an executive if the reduction will provide the NEO the best net after-tax result. If full payment to a NEO will result in the best net after-tax result, the full amount will be paid, but the NEO will be solely responsible for any potential excise tax payment. Also, the Company has implemented “double trigger” vesting for equity awards, pursuant to which outstanding awards will fully and immediately vest only if the executive is employed on the date of a change in control of the Company and is involuntarily terminated (other than by the Company for cause) on or within two years following the change in control. In case of retirement, the Company provides retirement benefits described above, life insurance benefits (to employees eligible under the Retirement Plan), the continued ability to exercise vested SAR awards and to vest in annual SAR and RSU awards granted at least one year prior to retirement, and the ability to vest in PSU awards on a pro-rata basis. With respect to consideration of how these benefits fit into the overall compensation policy, the change-in-control benefits are reviewed from time to time by the Committee for competitiveness. The Committee believes the benefits provided in case of a change in control are appropriate, support shareholder interests and are consistent with the policy of attracting and retaining highly qualified employees.
YUM’s Equity Award Granting Practices
YUM’s Equity Award Granting Practices Historically, we have fixed the dollar amount of annual SAR awards and, beginning in 2022, annual RSU awards at the Committee’s January meeting. This meeting date is set by the Board of Directors more than six months prior to the actual meeting. The Committee sets the annual grant date for these awards as the second business day after our fourth quarter earnings release. The exercise or grant price of these awards is set as the closing price on the date of grants. We ordinarily determine grant amounts at the same time other elements of annual compensation are determined so that we can consider all elements of compensation when authorizing the grants. We do not backdate or make grants retroactively. In addition, we do not time such grants in coordination with our possession or release of material, non-public or other information, nor do we time the release of material, non-public information for the purpose of affecting the value of executive compensation. During 2024, we did not grant any awards of SARs or stock options to any named executive officer during any period beginning four business days before and ending one business day after the filing of any Company periodic report on Form 10-Q or Form 10-K, or the filing or furnishing of any Company Form 8-K that disclosed any material non-public information. Grants may also be made on other dates the Board of Directors meets. These grants generally are CEO Awards, which are awards to individual employees (subject to Committee approval) in recognition of superlative performance and extraordinary impact on business results. These awards are currently made as RSUs which ordinarily vest after three years. Management recommends the awards be made pursuant to our LTIP to the Committee, however, the Committee determines whether and to whom it will issue grants and determines the amount of the grant. The Board of Directors has delegated to our CEO and our Chief People and Culture Officer, the ability to make grants to employees who are not executive officers and whose grants are less than $1,000,000 in accounting value annually. In the case of these grants, the Committee sets all the terms of each award, except the actual number of SARs/RSUs, which is determined by our CEO and our Chief People and Culture Officer pursuant to guidelines approved by the Committee in January of each year.
Limits on Future Severance Agreement Policy
Limits on Future Severance Agreement Policy The Committee has adopted a policy to limit future severance agreements with our NEOs and our other executives. The policy requires the Company to seek shareholder approval for future severance payments to a NEO if such payments would exceed 2.99 times the sum of (a) the NEO’s annual base salary as in effect immediately prior to termination of employment; and (b) the highest annual bonus awarded to the NEO by the Company in any of the Company’s three full fiscal years immediately preceding the fiscal year in which termination of employment occurs or, if higher, the executive’s target bonus. Certain types of payments are excluded from this policy, such as amounts payable under arrangements that apply to classes of employees other than the NEOs or that predate the implementation of the policy, as well as any payment the Committee determines is a reasonable settlement of a claim that could be made by the NEO.
THE MANAGEMENT PLANNING AND DEVELOPMENT COMMITTEE
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option/ SAR Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total ($) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | | David W. Gibbs | 2024 | 1,300,000 | — | 9,492,144 | 3,000,023 | 1,773,200 | 8,869,045 | 272,050 | 24,706,462 | | Chief Executive | 2023 | 1,300,000 | — | 9,096,602 | 2,875,016 | 4,712,500 | 2,999,005 | 255,832 | 21,238,955 | | Officer of Yum | 2022 | 1,284,615 | — | 8,938,377 | 2,825,012 | 3,030,300 | 367,990 | 225,360 | 16,671,654 | | Chris Turner | 2024 | 921,154 | — | 2,373,212 | 750,027 | 963,480 | — | 144,575 | 5,152,448 | | Chief Financial | 2023 | 896,154 | — | 2,175,374 | 687,522 | 1,875,938 | — | 109,370 | 5,744,358 | | Officer of YUM | 2022 | 871,154 | — | 1,977,749 | 625,001 | 1,222,594 | — | 139,443 | 4,835,941 | | Sabir Sami | 2024 | 773,463 | — | 1,977,559 | 625,022 | 469,117 | — | 4,036,103 | 7,881,264 | | Former Chief Executive Officer of KFC Division | 2023 | 757,507 | | 1,779,851 | 562,504 | 1,885,059 | — | 380,586 | 5,365,507 | | Tracy L. Skeans | 2024 | 921,154 | — | 2,254,457 | 712,503 | 757,020 | 1,186,089 | 13,900 | 5,845,123 | | Chief Operating | 2023 | 896,154 | — | 2,175,374 | 687,522 | 1,957,500 | 375,582 | 12,176 | 6,104,308 | | Officer and Chief People and Culture Officer of YUM | 2022 | 871,154 | — | 2,175,499 | 687,525 | 1,275,750 | — | 18,998 | 5,028,926 | | Sean Tresvant | 2024 | 764,423 | — | 1,582,185 | 500,018 | 811,800 | — | 126,330 | 3,784,756 | | Chief Executive Officer of Taco Bell Division | | | | | | | — | | | | Scott Catlett | 2024 | 771,154 | — | 1,858,952 | 587,527 | 554,978 | — | 184,521 | 3,957,132 | | Former Chief Legal and Franchise Officer of YUM | | | | | | | | | |
Lump Sum Availability
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). PEP The PEP is an unfunded, non-qualified plan that complements the Retirement Plan by providing benefits that federal tax law bars providing under the Retirement Plan. Benefits are generally determined and payable under the same terms and conditions as the Retirement Plan (except as noted below) without regard to federal tax limitations on amounts of includible compensation and maximum benefits. Benefits paid are reduced by the value of benefits payable under the Retirement Plan. PEP retirement distributions are always paid in the form of a lump sum. Lump sums are calculated as the actuarial equivalent of the participant’s life only annuity. Participants who terminate employment prior to meeting eligibility for Early or Normal Retirement must take their benefits from this plan in the form of a monthly annuity. Present Value of Accumulated Benefits For all plans, the present value of accumulated benefits (determined as of December 31, 2024) 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 EID, LRP and TCN plans. 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 cash incentive award. EID Program Deferred Investments under the EID Program. Amounts deferred under the EID Program may be invested in the following phantom investment alternatives (12-month investment returns, as of December 31, 2024, are shown in parentheses): ▪ YUM! Stock Fund (4.48%*) ▪ YUM! Matching Stock Fund (4.48%*) ▪ S&P 500 Index Fund (24.99%) ▪ Bond Market Index Fund (1.38%) ▪ Stable Value Fund (2.93%) * Assumes dividends are reinvested. All of the phantom investment alternatives offered under the EID Program are designed to match the performance of actual investments; that is, they provide market rate returns and do not provide for preferential earnings. The S&P 500 index fund, bond market index fund and stable value fund are designed to track the investment return of like-named funds offered under the Company’s 401(k) Plan. The YUM! Stock Fund and YUM! Matching Stock Fund track the investment return of the Company’s common stock. Participants may transfer funds between the investment alternatives on a quarterly basis except (1) funds invested in the YUM! Stock Fund or YUM! Matching Stock Fund may not be transferred once invested in these funds and (2) a participant may only elect to invest into the YUM! Matching Stock Fund at the time the annual incentive deferral election is made. In the case of the YUM! Matching Stock Fund, participants who defer their annual incentive into this fund acquire additional phantom shares (RSUs) equal to 33% of the RSUs received with respect to the deferral of their annual incentive into the YUM! Matching Stock Fund (the additional RSUs are referred to as “matching contributions”). The RSUs attributable to the matching contributions are allocated on the same day the RSUs attributable to the annual incentive are allocated, which is the same day we make our annual stock appreciation right grants. Eligible amounts attributable to the matching contribution under the YUM! Matching Stock Fund are included in column (c) below as contributions by the Company (and represent amounts actually credited to the NEO’s account during 2024). Beginning with their 2009 annual incentive award, those who are eligible for annual PSU awards are no longer eligible to participate in the YUM! Matching Stock Fund. RSUs attributable to annual incentive deferrals into the YUM! Matching Stock Fund and matching contributions vest on the second anniversary of the grant (or upon a change of control of the Company, if earlier) and are payable as shares of YUM common stock pursuant to the participant’s deferral election. Unvested RSUs held in a participant’s YUM! Matching Stock Fund account are forfeited if the participant voluntarily terminates employment with the Company within two years of the deferral date. If a participant terminates employment involuntarily, the participant will receive an amount equal to the original amount deferred, and effective, January 1, 2024, the portion attributable to the matching contribution. If a participant dies or becomes disabled during the restricted period, the participant fully vests in the RSUs. Dividend equivalents are accrued during the restricted period but are only paid if the RSUs vest. In the case of a participant who has attained age 55 with 10 years of service, or age 65 with five years of service, RSUs attributable to bonus deferrals into the YUM! Matching Stock Fund vest immediately and RSUs attributable to the matching contribution vest on the second anniversary of the deferral date. Distributions under EID Program. When participants elect to defer amounts into the EID Program, they also select when the amounts ultimately will be distributed to them. Distributions may either be made in a specific year – whether or not employment has then ended – or at a time that begins at or after the executive’s retirement, separation or termination of employment. Distributions can be made in a lump sum or quarterly or annual installments for up to 20 years. Initial deferrals are subject to a minimum two-year deferral. In general, with respect to amounts deferred after 2005 or not fully vested as of January 1, 2005, participants may change their distribution schedule, provided the new elections satisfy the requirements of Section 409A of the Internal Revenue Code. In general, Section 409A requires that: Distribution schedules cannot be accelerated (other than for a hardship)
Lump Sum Availability
| yum! brands, inc. | | 2025 PROXY STATEMENT |
Lump Sum Availability
To delay a previously scheduled distribution, – A participant must make an election at least one year before the distribution otherwise would be made, and – The new distribution cannot begin earlier than five years after it would have begun without the election to re-defer. With respect to amounts deferred prior to 2005, to delay a distribution the new distribution cannot begin until two years after it would have begun without the election to re-defer. Investments in the YUM! Stock Fund and YUM! Matching Stock Fund are only distributed in shares of Company stock. Leadership Retirement Plan LRP Account Returns. The LRP provides an annual earnings credit to each participant’s account based on the value of participant’s account at the end of each year. Under the LRP, Messrs. Turner, Catlett and Tresvant will receive an annual earnings credit equal to the Moody’s Aa Corporate Bond Yield Average for maturities 20 years and above (5.05% as of December 31, 2024) of their account balances. The Company’s contribution (“Employer Credit”) for 2024 was equal to 4% of salary plus target bonus for Messrs. Turner and Tresvant and 8% of salary plus target bonus for Mr. Catlett. Distributions under LRP. Under the LRP, participants who became eligible to participate in the plan before January 1, 2019 and are age 55 or older are entitled to a lump sum distribution of their account balance in the quarter following their separation of employment. Alternatively, these participants may elect to be paid in 5 or 10-year installments following the attainment of age 55. If these participants are under age 55 with a vested LRP benefit that, combined with any other deferred compensation benefits covered under Code Section 409A exceeds $23,000, they will not receive a distribution until the calendar quarter that follows the participant’s 55th birthday. Participants who become eligible to participate in LRP after January 1, 2019 (including Messrs. Turner and Tresvant) will receive a lump sum distribution following separation from employment. Third Country National Plan TCN Account Returns. The TCN provides an annual earnings credit to each participant’s account based on the value of each participant’s account at the end of each year. Under the TCN, Mr. Sami receives an annual earnings credit equal to 5%. For Mr. Sami, the Employer Credit for 2024 was equal to 15% of his salary plus target bonus. Distributions under TCN. Under the TCN, participants age 55 or older are entitled to a lump sum distribution of their account balance in the quarter following their separation of employment. Participants under age 55 who separate employment with the Company will receive interest annually and their account balance will be distributed in the quarter following their 55th birthday, provided however, that account balances of $23,000 or less will be distributed in the quarter following their separation of employment, taking into account any other deferred compensation benefits required to be aggregated with TCN under Code Section 409A.
Lump Sum Availability
| Name | Plan Name | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($)(3) | Aggregate Withdrawals/ Distributions ($)(4) | Aggregate Balance at Last FYE ($)(5) | | (a) | | (b) | (c) | (d) | (e) | (f) | | Gibbs | EID | — | — | 599,290 | — | 5,379,741 | | | Total | — | — | 599,290 | — | 5,379,741 | | Turner | EID | — | — | — | — | — | | | LRP | — | 81,400 | 15,650 | 3,036 | 403,919 | | | Total | — | 81,400 | 15,650 | 3,036 | 403,919 | | Sami | EID | — | — | — | — | — | | | TCN | — | 255,178 | 117,612 | — | 2,725,035 | | | Total | — | 255,178 | 117,612 | — | 2,725,035 | | Skeans | EID | — | — | 65,030 | — | 656,653 | | | Total | — | — | 65,030 | — | 656,653 | | Tresvant | EID | — | — | — | — | — | | | LRP | — | 63,000 | 4,859 | 6,634 | 157,449 | | | Total | — | 63,000 | 4,859 | 6,634 | 157,449 | | Catlett | EID | — | — | — | — | — | | | LRP | — | 127,100 | 35,871 | 5,259 | 868,021 | | | Total | — | 127,100 | 35,871 | 5,259 | 868,021 |
Lump Sum Availability
(1) Amounts in column (b) reflect deferred amounts that were also reported as compensation in our Summary Compensation Table filed last year or, would have been reported as compensation in our Summary Compensation Table last year if the executive were a NEO, and deferrals of base salary into the EID Program. (2) Amounts in column (c) reflect Company contributions for EID and LRP and TCN allocations. See footnote 6 of the Summary Compensation Table for more detail. (3) Amounts in column (d) reflect earnings during the last fiscal year on deferred amounts. All earnings are based on the investment alternatives offered under the EID Program or the earnings credits provided under the LRP and TCN described in the narrative above this table. The EID Program earnings are market based returns and, therefore, are not reported in the Summary Compensation Table. For Messrs. Turner, Sami, Tresvant and Catlett of the earnings reflected in this column, none were deemed above market earnings accruing to their accounts under the LRP and TCN. (4) All amounts shown in column (e) were distributed in accordance with the executive’s deferral election, except in the case of the following amounts distributed to pay payroll taxes due upon their account balance under the EID Program or LRP/TCN for 2024.
Lump Sum Availability
| Gibbs | — | | Turner | 3,036 | | Sami | — | | Skeans | — | | Tresvant | 6,634 | | Catlett | 5,259 |
Lump Sum Availability
(5) Amounts reflected in column (f) are the year-end balances for each executive under the EID Program and the LRP and TCN. As required under SEC rules, below is the portion of the year-end balance for each executive which has previously been reported as compensation to the executive in the Company’s Summary Compensation Table for 2024 and prior years.
Lump Sum Availability
| Gibbs | — | | Turner | $397,970 | | Sami | $501,709 | | Skeans | — | | Tresvant | $63,000 | | Catlett | $127,000 |
Lump Sum Availability
| yum! brands, inc. | | 2025 PROXY STATEMENT |
Lump Sum Availability
Potential Payments Upon Termination or Change in Control The information below describes and quantifies certain compensation that would become payable under existing plans and arrangements if the NEO’s employment had terminated on December 31, 2024, given the NEO’s compensation and service levels as of such date and, if applicable, based on the Company’s closing stock price on that date. These benefits are in addition to benefits available generally to salaried employees, such as distributions under the Company’s 401(k) Plan, retiree medical benefits, disability benefits and accrued vacation pay. Due to the number of factors that affect the nature and amount of any benefits provided upon the events discussed below, any actual amounts paid or distributed may be different. Factors that could affect these amounts include the timing during the year of any such event, the Company’s stock price and the executive’s age. SAR Awards. If one or more NEOs terminated employment for any reason other than retirement, death, disability or following a change in control as of December 31, 2024, they could exercise the SARs that were exercisable on that date as shown at the Outstanding Equity Awards at Year-End table on page 77, otherwise all SARs, pursuant to their terms, would have been forfeited and cancelled after that date. If the NEO had retired, died or become disabled as of December 31, 2024, exercisable SARs would remain exercisable through the term of the award and unvested shares would continue to vest if the award was granted at least one year before retirement and vesting would be accelerated for all SARs in the event of death. Except in the case of a change in control or death, no SARs become exercisable on an accelerated basis. As of December 31, 2024, in the case of an involuntary termination of employment following a change in control or death, each NEO would receive the following: Mr. Gibbs $3,068,525, Mr. Turner $701,221, Mr. Sami $243,419, Ms. Skeans $755,524, Mr. Tresvant $226,265 and Mr. Catlett $610,544. RSU Awards. If one or more NEOs terminated employment for any reason other than retirement, death, disability or following a change in control as of December 31, 2024, all unvested RSUs, pursuant to their terms, would have been forfeited and cancelled after that date. If the NEO had retired, died or become disabled as of December 31, 2024, unvested annual RSUs would continue to vest if the award was granted at least one year before retirement and vesting would be accelerated for all annual RSUs in the event of death (CEO Award RSUs receive pro rata vesting in the event of death or retirement). Except in the case of a change in control or death, no RSUs become vested on an accelerated basis. As of December 31, 2024, in the case of an involuntary termination of employment following a change in control or death, each NEO would receive the following: Mr. Gibbs $6,937,613, Mr. Turner $1,699,102, Mr. Sami $2,497,955, Ms. Skeans $1,696,094, Mr. Tresvant $1,493,155 and Mr. Catlett $1,392,551. Executive Income Deferral Program. As described in more detail beginning at page 81, the NEOs participate in the EID Program, which permits the deferral of salary and annual incentive compensation. The last column of the Nonqualified Deferred Compensation Table on page 81 includes each NEO’s aggregate balance at December 31, 2024. The NEOs are entitled to receive their vested amount under the EID Program in case of voluntary termination of employment. In the case of involuntary termination of employment, they are entitled to receive their vested benefit and the amount of the unvested benefit that corresponds to their deferral. In the case of death, disability or retirement after age 65, they or their beneficiaries are entitled to their entire account balance as shown in the last column of the Nonqualified Deferred Compensation table on page 81. In the case of an involuntary termination of employment as of December 31, 2024, each NEO would receive the following: Mr. Gibbs $5,379,741, Mr. Turner $0, Mr. Sami $0, Ms. Skeans $656,653, Mr. Tresvant $0 and Mr. Catlett $0. As discussed at page 81, these amounts reflect base salary or bonuses previously deferred by the executive and appreciation on these deferred amounts (see page 81 for discussion of investment alternatives available under the EID). Thus, these EID account balances represent deferred base salary or bonuses (earned in prior years) and appreciation of their accounts based primarily on the performance of the Company’s stock. Leadership Retirement Plan. Under the LRP, participants who become eligible to participate after January 1, 2019 (including Messrs. Turner, Tresvant and Catlett) will receive a lump sum distribution following separation from employment unless they elect to be paid in 5 or 10-year installments after attaining age 54. In case of termination of employment as of December 31, 2024, Mr. Turner would have received $403,919, Mr. Tresvant would have received $157,449 and Mr. Catlett would have received $868,021. Third Country National Plan. Under the TCN, participants age 55 or older are entitled to a lump sum distribution of their account balance in the quarter following their termination of employment. Participants under age 55 who terminate will receive interest annually and their account balance will be distributed in the quarter following their 55th birthday. In case of termination of employment as of December 31, 2024, Mr. Sami would have received $2,725,035. Performance Share Unit Awards. If one or more NEOs terminated employment for any reason other than retirement or death or following a change in control and prior to achievement of the performance criteria and vesting period, then the award would be cancelled and forfeited. If the NEO had retired or died or been involuntarily terminated following a change in control, as of December 31, 2024, the PSU award would be paid out based on actual performance for the performance period (or target performance if termination were to occur in the same year the PSU was granted), subject to a pro rata reduction reflecting the portion of the performance period not worked by the NEO. If any of these payouts had occurred on December 31, 2024, Messrs. Gibbs, Turner, Sami, Tresvant, Catlett and Ms. Skeans would have been entitled to $6,064,589, $1,471,986, $1,211,883, $332,452, $1,186,970 and $1,447,027, respectively, assuming target performance. Pension Benefits. The Pension Benefits Table on page 78 describes the general terms of each pension plan in which the NEOs participate, the years of credited service and the present value of the annuity payable to each NEO assuming termination of employment as of December 31, 2024. The table on page 78 provides the present value of the lump sum benefit payable to each NEO when they attain eligibility for Early Retirement (i.e., age 55 with 10 years of service) under the plans. Life Insurance Benefits. For a description of the supplemental life insurance plans that provide coverage to the NEOs, see the All Other Compensation Table on page 74. If the NEOs had died on December 31, 2024, the survivors of Messrs. Gibbs, Turner, Sami, Tresvant and Catlett and Ms. Skeans would have received Company-paid life insurance of $3,000,000, $2,035,000, $1,000,000, $1,575,000, $1,589,000 and $2,035,000, respectively, under this arrangement. Executives and all other salaried employees can purchase additional life insurance benefits up to a maximum combined company paid and additional life insurance of $3 million. This additional benefit is not paid or subsidized by the Company and, therefore, is not shown here.
Lump Sum Availability
Change in Control. Change in control severance agreements are in effect between YUM and certain key executives (including Messrs. Gibbs, Turner and Tresvant and Ms. Skeans). These agreements are general obligations of YUM, and provide, generally, that if, within two years subsequent to a change in control of YUM, the employment of the executive is terminated (other than for cause, or for other limited reasons specified in the change in control severance agreements) or the executive terminates employment for Good Reason (defined in the change in control severance agreements to include a diminution of duties and responsibilities or benefits), the executive will be entitled to receive the following: ▪ a proportionate annual incentive assuming achievement of target performance goals under the bonus plan or, if higher, assuming continued achievement of actual Company performance until date of termination; ▪ a severance payment equal to two times the sum of the executive’s base salary and the target bonus or, if higher, the actual bonus for the year preceding the change in control of the Company; and ▪ outplacement services for up to one year following termination. In March 2013, the Company eliminated excise tax gross-ups and implemented a best net after-tax method. See the Company’s CD&A on page 70 for more detail. The change in control severance agreements have a three-year term and are automatically renewable each January 1 for another three-year term. An executive whose employment is not terminated within two years of a change in control will not be entitled to receive any severance payments under the change in control severance agreements. Generally, pursuant to the agreements, a change in control is deemed to occur: (i) if any person acquires 20% or more of the Company’s voting securities (other than securities acquired directly from the Company or its affiliates); (ii) if a majority of the directors as of the date of the agreement are replaced other than in specific circumstances; or (iii) upon the consummation of a merger of the Company or any subsidiary of the Company other than (a) a merger where the Company’s directors immediately before the change in control constitute a majority of the directors of the resulting organization, or (b) a merger effected to implement a recapitalization of the Company in which no person is or becomes the beneficial owner of securities of the Company representing 20% or more of the combined voting power of the Company’s then-outstanding securities.
Lump Sum Availability
| yum! brands, inc. | | 2025 PROXY STATEMENT |
Lump Sum Availability
In addition to the payments described above, upon a change in control: All outstanding SARs held by the executive and not otherwise exercisable will fully and immediately vest following a change in control if the executive is employed on the date of the change in control of the Company and is involuntarily terminated (other than by the Company for cause) on or within two years following the change in control. See Company’s CD&A on page 52 for more detail; ▪ RSUs under the Company’s EID Program or otherwise held by the executive will automatically vest; and ▪ Pursuant to the Company’s Performance Share Plan under the LTIP, all PSU awards awarded in the year in which the change in control occurs, will be paid out at target assuming a target level performance had been achieved for the entire performance period, subject to a pro rata reduction to reflect the portion of the performance period after the change in control. All PSUs awarded for performance periods that began before the year in which the change in control occurs will be paid out assuming performance achieved for the performance period was at the greater of target level performance or projected level of performance at the time of the change in control, subject to pro rata reduction to reflect the portion of the performance period after the change in control. In all cases, executives must be employed with the Company on the date of the change in control and involuntarily terminated upon or following the change in control and during the performance period. See Company’s CD&A on page 52 for more detail. If a change in control and each NEO’s involuntary termination had occurred as of December 31, 2024, the following payments or other benefits would have been made or become available.
Lump Sum Availability
| | Gibbs $ | Turner $ | Sami $ | Skeans $ | Tresvant $ | Catlett $ | | Severance Payment | 12,025,000 | 5,601,876 | 5,265,467 | 5,765,000 | 3,333,088 | — | | Annual Incentive | 2,600,000 | 1,110,000 | 930,788 | 1,110,000 | 825,000 | — | | Accelerated Vesting of SARs | 3,068,525 | 701,221 | 243,419 | 755,524 | 226,265 | 610,544 | | Accelerated Vesting of RSUs | 6,937,613 | 1,699,102 | 2,497,955 | 1,696,094 | 1,493,155 | 1,392,551 | | Acceleration of PSU Performance/Vesting | 6,064,589 | 1,471,986 | 1,211,883 | 1,447,027 | 332,452 | 1,186,970 | | Outplacement | 25,000 | 25,000 | 25,000 | 25,000 | 25,000 | — | | TOTAL | 30,720,727 | 10,609,185 | 10,174,512 | 10,798,645 | 6,234,960 | 3,190,065 |
Lump Sum Availability
In connection with his departure from the Company on March 1, 2025, Mr. Sami entered into a consulting agreement with the Company whereby he will receive a monthly consulting fee of $70,834 for the twelve-month period beginning on March 2, 2025. In Mr. Catlett’s case, since he was no longer in an executive officer role as of December 31, 2024, he would no longer have been entitled to the severance, annual incentive, and outplacement components available as part of a change in control. However, he would have received accelerated vesting of his outstanding equity by ordinary operation of the LTIP and his award agreements. Separately, and in connection with his stepping down as Chief Legal and Franchise Officer effective after October 31, 2024, Mr. Catlett entered into an agreement to serve as a special advisor to the Company through March 31, 2025 during which time he would receive his then current salary and benefits and be eligible for an unreduced annual cash incentive award for 2024 (all of which amounts earned in 2024 are reflected in the Summary Compensation Table on page 73). Subject to his compliance with the agreement, Mr. Catlett would thereafter be entitled to receive 12 months of continued salary and an annual cash incentive award for 2025, as well as lump sum cash payments equal to $350,000, which included amounts for outplacement. The vesting of Mr. Catlett’s outstanding equity awards was not accelerated.
CEO Pay Ratio
CEO Pay Ratio Each year the Company and our franchisees around the world create thousands of restaurant jobs, which are part-time, entry-level opportunities to grow careers at our KFC, Pizza Hut, Taco Bell and The Habit Burger & Grill brands. As evidence of the opportunities these positions create, approximately 80% of our Company-owned Restaurant General Managers (“RGMs”) located in the U.S. have been promoted from other positions in our restaurants and such RGMs often earn competitive pay greater than the average American household income. In the United States, approximately 90% of our Company-owned restaurant employees are part-time and at least 50% have been employed by the Company for less than a year. As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and applicable SEC rules, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Gibbs, our Chief Executive Officer (our “CEO”). To identify the 2024 median employee, we used the December 2024 base wages or base salary information for all employees who were employed by us on December 31, 2024, excluding our CEO. We included all full-time and part-time employees and annualized the employees’ base salary or base wages to reflect their compensation for 2024. We believe the use of base wages or base salary for all employees is a consistently applied compensation measure. The employee that was used for purposes of calculating the ratio below was similarly situated to the employee (the “2023 median employee”) that was identified as the median employee for purposes of the CEO pay ratio disclosure included in the proxy statement for our 2024 annual meeting of shareholders (the “2023 Pay Ratio Disclosure”) because there has been no material change in our employee population or employee compensation arrangements since the 2023 median employee was identified that we believe would significantly impact our pay ratio disclosure. As of December 31, 2024, our global workforce used for determining the pay ratio was approximately 35,000 employees (approximately 25,000 in the U.S. and 10,000 internationally). After calculating employee compensation, our median employee was identified as a part-time Taco Bell restaurant employee in the United States. After identifying the median employee, we calculated total annual compensation in accordance with the requirements of the Summary Compensation Table. For 2024, the total compensation of our CEO, as reported in the Summary Compensation Table at page 73, was $24,706,462. The total compensation of our median employee was estimated to be $17,160. As a result, we estimate that our CEO to median employee pay ratio is 1440:1. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
CEO Pay Ratio
| yum! brands, inc. | | 2025 PROXY STATEMENT |
CEO Pay Ratio
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid (as defined by SEC rules) and certain financial performance of the Company. The Management Planning and Development Committee did not consider the pay versus performance disclosure when making its incentive compensation decisions. For further information about how we align executive compensation with the company’s performance, see “Compensation Discussion and Analysis” on page 52 above. The amounts in the table below are calculated in accordance with SEC rules and do not represent amounts actually earned or realized by NEOs, including with respect to SARs, RSUs and PSUs. See the “2024 Option Exercises and Stock Vested” table on page 78 for more information. The following table sets forth additional compensation information of our Chief Executive Officer (CEO) and our non-CEO NEOs along with total shareholder return, net income, and Core Operating Profit Growth performance results for 2020, 2021, 2022, 2023 and 2024.
CEO Pay Ratio
| | | | Average | | Value of Initial Fixed $100 Investment Based On: | | | | | Year(1) | Summary Compensation Table Total for CEO ($) | Compensation Actually Paid to CEO ($)(2)(3) | Summary Compensation Table Total for Non-CEO NEOs ($) | Average Compensation Actually Paid to Non-CEO NEOs($)(2)(3) | Total Shareholder Return ($)(9) | Peer Group Total Shareholder Return ($)(9) | Net Income ($) | Core Operating Profit Growth(10) | | 2024 | 24,706,462 | 10,763,339(4) | 5,324,145 | 4,140,120(4) | 146 | 193 | 1,486,000,000 | 8% | | 2023 | 21,238,955 | 19,362,404(5) | 5,606,206 | 5,685,564(5) | 140 | 149 | 1,597,000,000 | 12% | | 2022 | 16,671,654 | 16,099,314(6) | 4,984,077 | 4,629,758(6) | 134 | 104 | 1,325,000,000 | 5% | | 2021 | 27,578,659 | 45,011,805(7) | 8,305,919 | 13,880,647(7) | 143 | 166 | 1,575,000,000 | 18% | | 2020 | 14,631,451 | 10,894,204(8) | 4,294,455 | 4,270,359(8) | 110 | 133 | 904,000,000 | (7)% |
CEO Pay Ratio
(1) The CEO and NEOs included in the above compensation columns reflect the following:
CEO Pay Ratio
| Year | CEO | NEOs | | 2024 | David Gibbs | Chris Turner, Sabir Sami, Tracy Skeans, Sean Tresvant, Scott Catlett | | 2023 | David Gibbs | Chris Turner, Tracy Skeans, Sabir Sami, Aaron Powell | | 2022 | David Gibbs | Chris Turner, Tracy Skeans, Mark King, Aaron Powell | | 2021 | David Gibbs | Chris Turner, Tracy Skeans, Mark King, Tony Lowings |
CEO Pay Ratio
(2) Fair value or change in fair value, as applicable, of equity awards in the “Compensation Actually Paid” columns was determined by reference to (1) for RSU awards, closing price of YUM common stock on applicable year-end dates or, in the case of vesting dates, the actual vesting price, (2) for PSU awards, the same valuation methodology as RSU awards above except year-end and vesting date values are multiplied by the probability of achievement or actual results, as applicable, as of each such date and, for PSU awards with market-based conditions, the probability is determined based on the outcome of a Monte Carlo simulation and (3) for SARs, the fair value calculated by a Black-Scholes option-pricing model as of the applicable year-end or vesting date(s), determined based on the same methodology as used to determine grant date fair values but using the closing YUM or YUM China common stock price on the applicable revaluation date as the current market price as of the revaluation date, and in all cases based on expected term, as determined using the simplified method, volatility, dividend rates and risk free rates determined as of the revaluation date. The simplified method was used to determine expected term as of the revaluation date as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for awards with remaining contractual terms of less than 10 years. (3) For the portion of “Compensation Actually Paid” that is based on year-end stock prices, the following prices were used: for 2024: $134.16 (a 3% increase from prior year); for 2023: $130.66 (a 2% increase from prior year); for 2022: $128.08 (an 8% reduction from prior year), for 2021: $138.86 (a 28% increase from prior year), and for 2020: $108.56 (an 8% increase from prior year). (4) 2024 “Compensation Actually Paid” to the CEO and the average “Compensation Actually Paid” to the Non-CEO NEOs reflect the following adjustments from Total Compensation reported in the Summary Compensation Table:
CEO Pay Ratio
| | CEO ($) | Average of Non-CEO NEOs ($) | | Total Reported in 2024 Summary Compensation Table (SCT) | 24,706,462 | 5,324,145 | | Less, Value of Stock & Option Awards Reported in SCT | 12,492,167 | 2,644,292 | | Less, Change in Pension Value in SCT | 8,869,045 | 237,218 | | Plus, Pension Service Cost and impact of Pension Plan Amendments | 593,949 | 49,134 | | Plus, Year-End value of Awards Granted in Fiscal Year that are Unvested and Outstanding | 11,145,269 | 2,359,184 | | Plus, Change in Fair Value of Prior Year awards that are Outstanding and Unvested | (1,776,592) | (301,769) | | Plus, Fair Value of Awards Granted this Year and that Vested this Year | — | — | | Plus, Change in Fair Value (from Prior Year-End) of Prior Year awards that Vested this year | (2,544,537) | (409,064) | | Less, Prior Year Fair Value of Prior Year awards that failed to vest this year | — | — | | Total Adjustments | (13,943,123) | (1,184,025) | | “Compensation Actually Paid” for Fiscal Year 2024 | 10,763,339 | 4,140,120 |
CEO Pay Ratio
(5) 2023 “Compensation Actually Paid” to the CEO and the average “Compensation Actually Paid” to the Non-CEO NEOs reflect the following adjustments from Total Compensation reported in the Summary Compensation Table:
CEO Pay Ratio
| | CEO ($) | Average of Non-CEO NEOs ($) | | Total Reported in 2023 Summary Compensation Table (SCT) | 21,238,955 | 5,606,206 | | Less, Value of Stock & Option Awards Reported in SCT | 11,971,618 | 2,602,626 | | Less, Change in Pension Value in SCT | 2,999,005 | 93,896 | | Plus, Pension Service Cost and impact of Pension Plan Amendments | 602,421 | 57,783 | | Plus, Year-End value of Awards Granted in Fiscal Year that are Unvested and Outstanding | 12,975,399 | 2,820,850 | | Plus, Change in Fair Value of Prior Year awards that are Outstanding and Unvested | 1,934,143 | 369,155 | | Plus, Fair Value of Awards Granted this Year and that Vested this Year | — | — | | Plus, Change in Fair Value (from Prior Year-End) of Prior Year awards that Vested this year | (2,417,891) | (471,908) | | Less, Prior Year Fair Value of Prior Year awards that failed to vest this year | — | — | | Total Adjustments | (1,876,551) | 79,358 | | “Compensation Actually Paid” for Fiscal Year 2023 | 19,362,404 | 5,685,564 |
CEO Pay Ratio
(6) 2022 “Compensation Actually Paid” to the CEO and the average “Compensation Actually Paid” to the Non-CEO NEOs reflect the following adjustments from Total Compensation reported in the Summary Compensation Table:
CEO Pay Ratio
| | CEO ($) | Average of Non-CEO NEOs ($) | | Total Reported in 2022 Summary Compensation Table (SCT) | 16,671,654 | 4,984,077 | | Less, Value of Stock & Option Awards Reported in SCT | 11,763,389 | 2,342,510 | | Less, Change in Pension Value in SCT | 367,990 | — | | Plus, Pension Service Cost and impact of Pension Plan Amendments | 623,605 | 82,464 | | Plus, Year-End value of Awards Granted in Fiscal Year that are Unvested and Outstanding | 13,486,323 | 2,685,599 | | Plus, Change in Fair Value of Prior Year awards that are Outstanding and Unvested | (730,276) | (185,202) | | Plus, Fair Value of Awards Granted this Year and that Vested this Year | — | — | | Plus, Change in Fair Value (from Prior Year-End) of Prior Year awards that Vested this year | (1,820,613) | (594,670) | | Less, Prior Year Fair Value of Prior Year awards that failed to vest this year | — | — | | Total Adjustments | (572,340) | (354,319) | | “Compensation Actually Paid” for Fiscal Year 2022 | 16,099,314 | 4,629,758 |
CEO Pay Ratio
| yum! brands, inc. | | 2025 PROXY STATEMENT |
CEO Pay Ratio
(7) 2021 “Compensation Actually Paid” to the CEO and the average “Compensation Actually Paid” to the Non-CEO NEOs reflects the following adjustments from Total Compensation reported in the Summary Compensation Table:
CEO Pay Ratio
| | CEO ($) | Average of Non-CEO NEOs ($) | | Total Reported in 2021 Summary Compensation Table (SCT) | 27,578,659 | 8,305,919 | | Less, Value of Stock & Option Awards Reported in SCT | 15,936,623 | 4,449,129 | | Less, Change in Pension Value in SCT | 4,789,314 | 203,750 | | Plus, Pension Service Cost and impact of Pension Plan Amendments | 1,597,763 | 73,389 | | Plus, Year-End value of Awards Granted in Fiscal Year that are Unvested and Outstanding | 28,021,727 | 7,768,744 | | Plus, Change in Fair Value of Prior Year awards that are Outstanding and Unvested | 7,360,149 | 2,090,847 | | Plus, Fair Value of Awards Granted this Year and that Vested this Year | — | — | | Plus, Change in Fair Value (from Prior Year-End) of Prior Year awards that Vested this year | 1,179,444 | 294,627 | | Less, Prior Year Fair Value of Prior Year awards that failed to vest this year | — | — | | Total Adjustments | 17,433,146 | 5,574,728 | | “Compensation Actually Paid” for Fiscal Year 2021 | 45,011,805 | 13,880,647 |
CEO Pay Ratio
(8) 2020 “Compensation Actually Paid” to the CEO and the average “Compensation Actually Paid” to the Non-CEO NEOs reflects the following adjustments from Total Compensation reported in the Summary Compensation Table:
CEO Pay Ratio
| | CEO ($) | Average of Non-CEO NEOs ($) | | Total Reported in 2020 Summary Compensation Table (SCT) | 14,631,451 | 4,294,455 | | Less, Value of Stock & Option Awards Reported in SCT | 8,146,446 | 1,963,535 | | Less, Change in Pension Value in SCT | 4,517,703 | 463,105 | | Plus, Pension Service Cost and impact of Pension Plan Amendments | 445,160 | 52,089 | | Plus, Year-End value of Awards Granted in Fiscal Year that are Unvested and Outstanding | 8,657,431 | 2,206,217 | | Plus, Change in Fair Value of Prior Year awards that are Outstanding and Unvested | 351,871 | 196,358 | | Plus, Fair Value of Awards Granted this Year and that Vested this Year | — | — | | Plus, Change in Fair Value (from Prior Year-End) of Prior Year awards that Vested this year | (527,560) | (52,120) | | Less, Prior Year Fair Value of Prior Year awards that failed to vest this year | — | — | | Total Adjustments | (3,737,247) | (24,096) | | “Compensation Actually Paid” for Fiscal Year 2020 | 10,894,204 | 4,270,359 |
CEO Pay Ratio
(9) Company and Peer Group TSR reflects the Company’s peer group (S&P 500 Consumer Discretionary Index) as reflected in our Annual Report on the Form 10-K for the fiscal year ended December 31, 2024. Each year reflects what the cumulative value of $100 would be, including the reinvestment of dividends, if such amount were invested on December 27, 2019. (10) Core Operating Profit is a non-GAAP measure. Core Operating Profit is determined by excluding from Operating Profit both Special Items, which the Company does not believe are indicative of our ongoing operations due to their size and/or nature, and the impacts of foreign currency translation. Special Items include, among other items, gain or loss associated with market-wide refranchisings, operating profit or loss associated with the decision to cease operations in Russia, and certain charges associated with resource optimization. See pages 31-32 and 36-38 in Item 7 of YUM’s Form 10-K for the fiscal year ended on December 31, 2024 for a discussion of Core Operating Profit in 2024. Core Operating Profit Growth shown above excludes the impact of a 53rd week in 2024 and for 2020 based on a 53rd week in 2019. Pay versus Performance Descriptive Disclosure We chose Core Operating Profit Growth as our Company Selected Measure for evaluating Pay versus Performance because it is a key metric in our annual bonus (50% weighting) and annual PSU plans (50% weighting) in 2024. Over the five-year period from 2020 to 2024, our TSR was generally trending in a similar direction (or exceeding for 2022) as the TSR for our peer group. The increase in the Company’s TSR lagged our peers in 2020, 2021, 2023 and 2024, while our 2022 TSR performance significantly outpaced that of our peers, although our “Compensation Actually Paid” to our NEOs in 2022 decreased compared to what is reported in the Summary Compensation Table. There is generally a directionally corresponding relationship between TSR and “Compensation Actually Paid” between 2020 and 2024. As TSR increased or declined, “Compensation Actually Paid” increased or decreased accordingly. Between 2020 and 2024, we see a similar directionally corresponding relationship between Net Income and “Compensation Actually Paid.” As Net Income increased or declined over the five-year period, “Compensation Actually Paid” increased or decreased accordingly. Core Operating Profit Growth is a performance measure in both our annual bonus and PSU plans and, accordingly, we observed a correlation between Core Operating Profit Growth and “Compensation Actually Paid.” However, the increase in “Compensation Actually Paid” in 2021 was driven largely by the one-time Accelerating Profitable Growth PSU grant made to our CEO and NEOs in 2021. Pay versus Performance Tabular List The table below lists our most important financial performance measures used to link “Compensation Actually Paid” for our CEO and NEOs to company performance, over the year ending December 31, 2024. These measures are used to determine the annual bonus and PSU payouts for each of the CEO and the other NEOs. Core Operating Profit Growth, Same Store Sales Growth and Net New Unit Growth are key metrics under our annual bonus plan, while Core Operating Profit Growth and System Sales Growth are the primary metrics under our annual PSU plan. For more information on our annual bonus and PSUs, see the Compensation Discussion and Analysis, beginning on page 52 of this Proxy Statement. The performance measures included in this table are not ranked by relative importance.
CEO Pay Ratio
| Most Important Financial Performance Measures | | Core Operating Profit Growth | | System Sales Growth | | Net New Unit Growth | | Same Store Sales Growth | | Total Shareholder Return |
CEO Pay Ratio
| yum! brands, inc. | | 2025 PROXY STATEMENT |
CEO Pay Ratio
Equity Compensation Plan Information The following table summarizes, as of December 31, 2024, the equity compensation plans under which we may issue shares of stock to our directors, officers, current employees and former employees. Those plans include the Long Term Incentive Plan (the “LTIP”) and the Restaurant General Manager Stock Option Plan (“RGM Plan”).
CEO Pay Ratio
| Plan Category | Number of Securities To be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | | | (a) | (b) | (c) | | Equity compensation plans approved by security holders | 4,254,947(1) | 99.61(2) | 23,866,865(3) | | Equity compensation plans not approved by security holders | 9,311(4) | 57.96(2) | — | | TOTAL | 4,264,258(1) | 99.53(2) | 23,866,865(3) |
CEO Pay Ratio
(1) Includes 2,075,648 shares issuable in respect of RSUs, performance units and deferred units. (2) Weighted average exercise price of outstanding Options and SARs only. (3) Includes 11,933,432 shares available for issuance of awards of stock units, restricted stock, restricted stock units and performance share unit awards under the LTIP. (4) Awards are made under the RGM Plan. What are the key features of the LTIP? The LTIP provides for the issuance of up to 92,600,000 shares of stock as non-qualified stock options, incentive stock options, SARs, restricted stock, restricted stock units, performance shares or performance units. Only our employees and directors are eligible to receive awards under the LTIP. The purpose of the LTIP is to motivate participants to achieve long range goals, attract and retain eligible employees, provide incentives competitive with other similar companies and align the interest of employees and directors with those of our shareholders. The LTIP is administered by the Management Planning and Development Committee of the Board of Directors (the “Committee”). The exercise price of a stock option grant or SAR under the LTIP may not be less than the closing price of our stock on the date of the grant, and no options or SARs may have a term of more than ten years. The options and SARs that are currently outstanding under the LTIP generally vest over a one-to-four-year period and expire ten years from the date of the grant. Our shareholders approved the LTIP in 1999, and the plan as amended in 2003, 2008 and 2016. What are the key features of the RGM Plan? Effective May 20, 2016, we canceled the remaining shares available for issuance under the RGM Plan, except for the approximately 220,000 shares necessary to satisfy then outstanding awards. No future awards will be made under the RGM Plan. The RGM Plan has provided for the issuance shares of common stock at a price equal to or greater than the closing price of our stock on the date of grant. The RGM Plan allowed us to award non-qualified stock options, SARs, restricted stock and RSUs. Employees, other than executive officers, have been eligible to receive awards under the RGM Plan. The purpose of the RGM Plan was (i) to give restaurant general managers (“RGMs”) the opportunity to become owners of stock, (ii) to align the interests of RGMs with those of YUM’s other shareholders, (iii) to emphasize that the RGM is YUM’s #1 leader, and (iv) to reward the performance of RGMs. In addition, the Plan provides incentives to Area Coaches, Franchise Business Leaders and other supervisory field operation positions that support RGMs and have profit and loss responsibilities within a defined region or area. While all non-executive officer employees have been eligible to receive awards under the RGM plan, all awards granted have been to RGMs or their direct supervisors in the field. Grants to RGMs generally have four-year vesting and expire after ten years. The RGM Plan is administered by the Committee, and the Committee has delegated its responsibilities to the Chief People and Culture Officer of the Company. The Board of Directors approved the RGM Plan on January 20, 1998. AUDIT COMMITTEE REPORT Audit Committee Report Who serves on the Audit Committee of the Board of Directors? The members of the Audit Committee (for purposes of this report, the “Committee”) are Paget L. Alves, M. Brett Biggs, Tanya L. Domier, Susan Doniz, and Annie Young-Scrivner. Mr. Alves serves as chair of the Committee. The Board of Directors has determined that all of the members of the Audit Committee are independent within the meaning of applicable SEC regulations and the listing standards of the NYSE and that Mr. Alves, the chair of the Committee, is qualified as an audit committee financial expert within the meaning of SEC regulations. The Board has also determined that Mr. Alves has accounting and related financial management expertise within the meaning of the listing standards of the NYSE and that each member of the Committee is financially literate within the meaning of the NYSE listing standards. What document governs the activities of the Audit Committee? The Audit Committee operates under a written charter adopted by the Board of Directors. The Committee’s responsibilities are set forth in this charter, which was amended and restated effective January 26, 2023. The charter is reviewed by management at least annually, and any recommended changes are presented to the Audit Committee for review and approval. The charter is available on our Web site at http://investors.yum.com/committee-composition-and-charters. What are the responsibilities of the Audit Committee? The Audit Committee assists the Board in fulfilling its responsibilities for general oversight of the integrity of the Company’s financial statements, the adequacy of the Company’s system of internal controls and procedures and disclosure controls and procedures, the Company’s risk management, the Company’s compliance with legal and regulatory requirements, the independent auditors’ qualifications and independence, the performance of the Company’s internal audit function and independent auditors, and the Food pillar of the Company’s environmental, social and governance strategy referred to as the Yum! Recipe for Good Growth. The Committee has the authority to obtain advice and assistance from outside legal, accounting or other advisors as the Committee deems necessary to carry out its duties and receive appropriate funding, as determined by the Committee, from the Company for such advice and assistance. The Committee has sole authority over the selection of the Company’s independent auditors and manages the Company’s relationship with its independent auditors (who report directly to the Committee). KPMG LLP has served as the Company’s independent auditors since 1997. Each year, the Committee evaluates the performance, qualifications and independence of the independent auditors. The Committee is also involved in the selection of the lead audit partner. In evaluating the Company’s independent auditors, the Committee considers the quality of the services provided, as well as the independent auditors’ and lead partner’s capabilities and technical expertise and knowledge of the Company’s operations and industry. The Committee met 8 times during 2024. The Committee schedules its meetings with a view to ensuring that it devotes appropriate attention to all of its tasks. The Committee’s meetings generally include private sessions with the Company’s independent auditors and with the Company’s internal auditors, in each case without the presence of the Company’s management, as well as executive sessions consisting of only Committee members. In addition to the scheduled meetings, senior management confers with the Committee or its Chair from time to time, as senior management deems advisable or appropriate, in connection with issues or concerns that arise throughout the year.
CEO Pay Ratio
Management is responsible for the Company’s financial reporting process, including its system of internal control over financial reporting, and for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the U.S. The Company’s independent auditors are responsible for auditing those financial statements in accordance with professional standards and expressing an opinion as to their material conformity with U.S. generally accepted accounting principles and for auditing the effectiveness of the Company’s internal control over financial reporting. The Committee’s responsibility is to monitor and review the Company’s financial reporting process and discuss management’s report on the Company’s internal control over financial reporting. It is not the Committee’s duty or responsibility to conduct audits or accounting reviews or procedures. The Committee has relied, without independent verification, on management’s representations that the financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the U.S. and that the Company’s internal control over
CEO Pay Ratio
| yum! brands, inc. | | 2025 PROXY STATEMENT |
CEO Pay Ratio
financial reporting is effective. The Committee has also relied, without independent verification, on the opinion of the independent auditors included in their report regarding the Company’s financial statements and effectiveness of internal control over financial reporting. What matters have members of the Audit Committee discussed with management and the independent auditors? As part of its oversight of the Company’s financial statements, the Committee reviews and discusses with both management and the Company’s independent auditors all annual and quarterly financial statements prior to their issuance. With respect to each 2024 fiscal reporting period, management advised the Committee that each set of financial statements reviewed had been prepared in accordance with accounting principles generally accepted in the U.S., and reviewed significant accounting and disclosure issues with the Committee. These reviews included discussions with the independent auditors of matters required to be discussed pursuant to Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 1301 (Communication with Audit Committees), including the quality (not merely the acceptability) of the Company’s accounting principles, the reasonableness of significant judgments, the clarity of disclosures in the financial statements and disclosures related to critical accounting practices. The Committee has also discussed with KPMG LLP matters relating to its independence, including a review of audit and non-audit fees and the written disclosures and letter received from KPMG LLP required by applicable requirements of the PCAOB regarding KPMG LLP’s communications with the Committee concerning independence. The Committee also considered whether non-audit services provided by the independent auditors are compatible with the independent auditors’ independence. The Committee also received regular updates, and written summaries as required by the PCAOB rules (for tax and other services), on the amount of fees and scope of audit, audit-related, tax and other services provided. In addition, the Committee reviewed key initiatives and programs aimed at strengthening the effectiveness of the Company’s internal and disclosure control structure. As part of this process, the Committee continued to monitor the scope and adequacy of the Company’s internal auditing program, reviewing staffing levels and steps taken to implement recommended improvements in internal procedures and controls. The Committee reviewed and discussed the Company’s enterprise risk management program and key risks, including the Company’s business and financial technology risk exposure, which includes data privacy and data protection, information security and cybersecurity. It also reviewed and discussed risks relating to the Food pillar of the Yum! Recipe for Good Growth, including food safety and supply chain risk. The Committee also reviewed and discussed legal and compliance matters with management, and, as necessary or advisable, the Company’s independent auditors. Has the Audit Committee made a recommendation regarding the audited financial statements for fiscal 2024? Based on the Committee’s discussions with management and the independent auditors and the Committee’s review of the representations of management and the report of the independent auditors to the Board of Directors and shareholders, and subject to the limitations on the Committee’s role and responsibilities referred to above and in the Audit Committee Charter, the Committee recommended to the Board of Directors that it include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for filing with the SEC. Who prepared this report? This report has been furnished by the members of the Audit Committee: Paget L. Alves, Chairperson M. Brett Biggs Tanya L. Domier Susan Doniz Annie Young-Scrivner ADDITIONAL INFORMATION Additional Information Who pays the expenses incurred in connection with the solicitation of proxies? Expenses in connection with the solicitation of proxies will be paid by the Company. Proxies are being solicited principally by mail, by telephone and through the Internet. In addition, our directors, officers and regular employees, without additional compensation, may solicit proxies personally, by e-mail, telephone, fax or special letter. We will reimburse brokerage firms and others for their expenses in forwarding proxy materials to the beneficial owners of our shares. How may I elect to receive shareholder materials electronically and discontinue my receipt of paper copies? YUM shareholders with shares registered directly in their name who received shareholder materials in the mail may elect to receive future annual reports and proxy statements from us and to vote their shares through the Internet instead of receiving copies through the mail. We are offering this service to provide shareholders with added convenience, to reduce our environmental impact and to reduce Annual Report printing and mailing costs. To take advantage of this option, shareholders must subscribe to one of the various commercial services that offer access to the Internet. Costs normally associated with electronic access, such as usage and telephone charges, will be borne by the shareholder. To elect this option, go to www.computershare.com, click on Shareholder Account Access, log in and locate the option to receive Company mailing via e-mail. Shareholders who elect this option will be notified by mail how to access the proxy materials and how to vote their shares on the Internet or by phone. If you consent to receive future proxy materials electronically, your consent will remain in effect unless it is withdrawn by writing our Transfer Agent, Computershare, Inc., 462 South 4th Street, Suite 1600, Louisville, Kentucky 40202 or by logging onto our Transfer Agent’s website at www.computershare.com and following the applicable instructions. Also, while this consent is in effect, if you decide you would like to receive a hard copy of the proxy materials, you may call, write or e-mail Computershare, Inc. I share an address with another shareholder and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials? The Company has adopted a procedure called “householding” which has been approved by the SEC. The Company and some brokers household proxy materials, delivering a single Notice and, if applicable, this proxy statement and Annual Report, to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders or they participate in electronic delivery of proxy materials. Shareholders who participate in householding will continue to access and receive separate proxy cards. This process will help reduce our printing and postage fees, as well as save natural resources. If at any time you no longer wish to participate in householding and would prefer to receive a separate proxy statement, or if you are receiving multiple copies of the proxy statement and wish to receive only one, please notify your broker if your shares are held in a brokerage account or us if you hold registered shares. You can notify us by sending a written request to YUM! Brands, Inc., Investor Relations, 1441 Gardiner Lane, Louisville, KY 40213 or by calling Investor Relations at 1 (888) 298-6986 or by sending an e-mail to yum.investor@yum.com.
CEO Pay Ratio
| yum! brands, inc. | | 2025 PROXY STATEMENT |
CEO Pay Ratio
May I propose actions for consideration at next year’s Annual Meeting of Shareholders or nominate individuals to serve as directors? Under the rules of the SEC, if a shareholder wants us to include a proposal in our proxy statement and proxy card for presentation at our 2026 Annual Meeting of Shareholders, the proposal must be received by us at our principal executive offices at YUM! Brands, Inc., 1441 Gardiner Lane, Louisville, Kentucky 40213 by December 5, 2025. The proposal should be sent to the attention of the Corporate Secretary. Under our bylaws, certain procedures are provided that a shareholder must follow to nominate persons for election as directors or to introduce an item of business at an Annual Meeting of Shareholders that is not included in our proxy statement. These procedures provide that nominations for director nominees and/or an item of business to be introduced at an Annual Meeting of Shareholders must be submitted in writing to our Corporate Secretary at our principal executive offices and you must include information set forth in our bylaws. We must receive the notice of your intention to introduce a nomination or to propose an item of business at our 2026 Annual Meeting no later than the date specified in our bylaws. If the 2026 Annual Meeting is not held within 30 days before or after the anniversary of the date of this year’s Annual Meeting, then the nomination or item of business must be received by the tenth day following the earlier of the date of mailing of the notice of the meeting or the public disclosure of the date of the meeting. Assuming that our 2026 Annual Meeting is held within 30 days of the anniversary of this Annual Meeting, we must receive notice of your intention to introduce a nomination or other item of business at that meeting by February 14, 2026. In addition to satisfying the foregoing requirements under our bylaws, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by the SEC’s Rule 14a-19, which notice must be postmarked or transmitted electronically to our principal executive offices no later than 60 calendar days prior to the anniversary date of this year’s Annual Meeting (or no later than March 16, 2026). However, if the date of the 2026 Annual Meeting is changed by more than 30 calendar days from such anniversary date, then notice must be provided by the later of 60 calendar days prior to the date of the 2026 Annual Meeting or the 10th calendar day following the day on which public announcement of the date of the 2026 Annual Meeting is first made by the Company. In addition, our bylaws provide for proxy access for director nominations by shareholders (as described at page 18). A shareholder, or group of up to 20 shareholders, owning continuously for at least three years shares of YUM common stock representing an aggregate of at least 3% of our outstanding shares, may 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 5, 2025, and no later than December 5, 2025. The Board is not aware of any matters that are expected to come before the 2025 Annual Meeting other than those referred to in this proxy statement. If any other matter should come before the Annual Meeting, the individuals named on the form of proxy intend to vote the proxies in accordance with their best judgment. The chairperson of the Annual Meeting may refuse to allow the transaction of any business, or to acknowledge the nomination of any person, not made in compliance with the foregoing procedures. Bylaw Provisions. You may contact YUM’s Corporate Secretary at the address mentioned above for a copy of the relevant bylaw provisions regarding the requirements for making shareholder proposals and nominating director candidates. YUM! Brands, Inc. 2025 Long Term Incentive Plan (Effective as of May 15, 2025)