Ethically managing the Company for profitable, long-term growth is our priority. The Company has
policies and practices that align management and shareholder interests. We know that these types of
governance practices will pay off for our shareholders over time. Our Board of Directors believes
that good corporate governance is a critical factor in achieving business success and in fulfilling
the Board’s responsibilities to shareholders. Some of the more noteworthy aspects of our corporate
governance policies include:
Corporate Governance Principles. The Board of Directors has documented its corporate
governance in the Yum! Brands, Inc. Corporate Governance Principles.
Guidelines for Business Conduct. Yum!’s Worldwide Code of Conduct was adopted in
1997 when the Company was formed to emphasize the Company’s commitment to the highest standards of
business conduct. The Code of Conduct also sets forth information and procedures for employees to
report ethical or accounting concerns, misconduct or violations of the Code in a confidential
manner.
Contacting the Board. Shareholders and others can contact the Board to report any
matters of concern.
Private Executive Sessions. Our non-management directors meet in executive session
at each regular Board meeting. The executive sessions are attended only by the non-management
directors and are presided over by the Lead Director or our Non-Executive Chair, as applicable.
Our independent directors meet in executive session at least once per year.
Advance Materials. Information and data important to the directors’ understanding of
the business or matters to be considered at a Board or Board Committee meeting are, to the extent
practical, distributed to the directors sufficiently in advance of the meeting to allow careful
review prior to the meeting.
Board and Committees' Evaluations. The Board has an annual self-evaluation process
that is led by the Nominating and Governance Committee. This assessment focuses on the Board’s
contribution to the Company and emphasizes those areas in which the Board believes a better
contribution could be made. As a part of this process, each Board member completes an individual
written questionnaire and a personal interview, the results of which are summarized and discussed in
an executive session. In addition, the Audit, Management Planning and Development and Nominating and
Governance Committees also each conduct similar annual self-evaluations.
Access to Management and Employees. Directors have full and unrestricted access to
the management and employees of the Company. Additionally, key members of management attend Board
meetings to present information about the results, plans and operations of the business within their
areas of responsibility.
Access to Outside Advisers. The Board and its Committees may retain counsel or
consultants without obtaining the approval of any officer of the Company in advance or otherwise.
The Audit Committee has the sole authority to retain and terminate the independent auditor. The
Nominating and Governance Committee has the sole authority to retain search firms to be used to
identify director candidates. The Compensation Committee has the sole authority to retain
compensation consultants for advice on executive compensation matters.
Director Equity-Based Compensation. Yum! directors receive a significant portion of
their annual compensation in stock. The Company believes that the increased emphasis on the equity
component of director compensation serves to further align the directors with the interests of our
shareholders.
Stock Ownership Guidelines. The Compensation Committee has adopted formal stock
ownership guidelines that set minimum ownership expectations for the 190 most senior executives and
managers. The Company has maintained an ownership culture among its executive and senior managers
since its formation. Substantially all executive officers and members of senior management hold
stock well in excess of the guidelines.
In addition, the Board believes that the number of shares of the Company’s common stock owned by each
non-management director is a personal decision; however, the Board strongly supports the position
that non-management directors should own a meaningful number of shares in the Company and expects
that each non-management director will (i) own Company common shares with a value of at least five
times the annual Board retainer; (ii) accumulate those shares during the first five years of the
director’s service on the Board; and (iii) hold these shares at least until the director departs the
Board. Each director may sell enough shares to pay taxes in connection with the receipt of their
retainer or the exercise of stock appreciation rights and the ownership guideline will be adjusted
to reflect the sale to pay taxes.