Yum Brands

Annual Meeting May 11

Yum Brands CEO David Gibbs received a total compensation of $14,631,451 in 2020, a large portion of which he would not have received had the board retained its planned metrics. As described by CBS:

 “[Gibbs]had failed to qualify for a hefty payout because of the company's 25% drop in earnings in 2020. Yet Yum's board of directors also said it was ‘unfair’ for the executive to give up his bonus just because of the pandemic's adverse impact on the company's financial results. As a result, the board decided to make what it called ‘discretionary adjustments.’”

Specifically, the company reports in its proxy statement that “the impact of the pandemic had so adversely affected the EPS metric that the EPS portion of the award would pay out at 0%, as of year-end 2020.” Thus, the compensation committee decided to use the performance of the company as of December 30, 2019 in calculating for Performance Share Units in order “to prevent Mr. Gibbs and Ms. Skeans from being unfairly penalized by the unanticipated impact of the pandemic on the Company’s operating results.”

While many wish 2020 hadn’t happened, very few can get paid as if it didn’t.

Yum Brands, the parent company of restaurant chains including Habit Burger, KFC, Pizza Hut and Taco Bell, had to close several locations during the pandemic. In calculating the wage of the median employee, the company used “base salary information for all employees who were employed by us on December 31, 2020.” It is not clear from the proxy statement if the slight decrease of median employee pay in 2020 ($11,377) was impacted by these closures. Nevertheless, the worker-to-CEO pay ratio was 1298:1 in 2020.