Key Insights

• Yum! Brands' Annual General Meeting to take place on 16th of May
• Total pay for CEO David Gibbs includes US$1.30m salary
• The overall pay is 38% above the industry average
• Yum! Brands' total shareholder return over the past three years was 23% while its EPS grew by 15% over the past three years

CEO David Gibbs has done a decent job of delivering relatively good performance at Yum! Brands, Inc. (NYSE:YUM) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 16th of May. However, some shareholders may still want to keep CEO compensation within reason.

How Does Total Compensation For David Gibbs Compare With Other Companies In The Industry?

Our data indicates that Yum! Brands, Inc. has a market capitalization of US$39b, and total annual CEO compensation was reported as US$21m for the year to December 2023. We note that's an increase of 27% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.

For comparison, other companies in the American Hospitality industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$15m. Hence, we can conclude that David Gibbs is remunerated higher than the industry median. What's more, David Gibbs holds US$33m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 18% of total compensation represents salary and 82% is other remuneration. Yum! Brands pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Yum! Brands, Inc.'s Growth

Yum! Brands, Inc.'s earnings per share (EPS) grew 15% per year over the last three years. Its revenue is up 1.3% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Yum! Brands, Inc. Been A Good Investment?

With a total shareholder return of 23% over three years, Yum! Brands, Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 2 which are significant) in Yum! Brands we think you should know about.

Important note: Yum! Brands is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.