Joey Wat
Yum China HoldingsAbout Joey Wat
Joey Wat (age 53) is CEO of Yum China Holdings since March 2018 and a director since July 2017; she holds a master of management degree from the Kellogg School of Management and previously held leadership roles at A.S. Watson Group and McKinsey & Company . In 2024, Yum China delivered record revenues of $11.3B, operating profit of $1.2B, 10.3% OP margin (+20 bps YoY), and diluted EPS of $2.33; one-year TSR was 21%, ranking ~62nd percentile vs MSCI China Consumer Discretionary and ~55th percentile vs S&P 500 Consumer Discretionary constituents . KFC contributed ~75% of revenues and Pizza Hut reached its highest OP level since the spin-off in RMB; digital sales were $9.6B and membership exceeded 525M, with ~65% of KFC+Pizza Hut system sales from members . The Board has an independent Chairman and determined Wat is not independent given her CEO role .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Yum China | Chief Executive Officer | Mar 2018–present | Led “RGM” strategy, record revenues/EPS, margin expansion, accelerated store growth |
| Yum China | President & COO | Feb 2017–Feb 2018 | Enterprise-wide operations leadership prior to CEO appointment |
| Yum China / Yum! Restaurants China | CEO, KFC China | Oct 2016–Feb 2017 | KFC established as key growth engine, >2,200 cities reached by 2024 |
| Yum China / Yum! Restaurants China | President, KFC China | Sep 2014–Oct 2016 | Drove system sales and network expansion at flagship brand |
| A.S. Watson Group (U.K.) | Management & Strategy Roles | 2004–2014 | Retail leadership experience across health/beauty/lifestyle |
| McKinsey & Company (Hong Kong) | Management Consulting | Early career | Strategy and operations expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| A.S. Watson Group | Senior management/strategy roles (U.K.) | 2004–2014 | Multinational retail operations and strategy experience |
| McKinsey & Company | Consultant (Hong Kong) | Early career | Foundational management consulting experience |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,418,750 | 1,425,000 | 1,425,000 |
| Target Bonus % of Salary | — | — | 200% |
| Target STI Opportunity ($) | — | — | 2,850,000 |
| Actual STI Paid ($) | 4,788,000 | 4,916,250 | 2,445,300 |
| All Other Compensation ($) | 401,002 | 3,994,410 | 351,696 |
| Total Compensation ($) | 15,892,879 | 20,335,792 | 14,222,077 |
Notes:
- CEO 2024 base salary remained unchanged vs 2023 .
- CEO registrant contribution to nonqualified plan in 2024: $142,583 .
Performance Compensation
2024 Short-Term Incentive (STI) – Company Team Factor
| Metric | Weight | Threshold | Target | Maximum | Actual 2024 | Earned as % of Target | Contribution |
|---|---|---|---|---|---|---|---|
| Adjusted Operating Profit Growth | 50% | 3.0% | 9.5% | 18.0% | 6.3% | 76% | 38% |
| Same-Store Sales Growth | 20% | 0.0% | 2.0% | 4.0% | -2.8% | — | — |
| System Net New Builds (stores) | 20% | 1,450 | 1,700 | 2,190 | 1,751 | 110% | 22% |
| Active Member Spending Index | 10% | — | — | — | — | — | 6% |
| Final Company Team Factor | — | — | — | — | — | — | 66% |
CEO Individual Performance Factor: 130% (Board assessment across value creation, growth, resilience, moat, ESG) .
Final 2024 STI payout: $2,445,300 (Team 66% × Individual 130% applied to $2,850,000 target) .
2024 Long-Term Incentive (LTI) – PSUs and RSUs
| Award Type | Metric | Weight | Performance Period | Vesting Schedule | Threshold / Max |
|---|---|---|---|---|---|
| PSUs | rTSR vs MSCI China Consumer Discretionary | 30% | 2024–2026 | Vests based on performance; settlement at 12/31/2026; continued employment required | 40% / 200% of target; rTSR payout capped at target if TSR is negative |
| PSUs | rTSR vs S&P 500 Consumer Discretionary | 15% | 2024–2026 | Same as above | Same |
| PSUs | System Sales Growth (3-year CAGR) | 25% | 2024–2026 | Same as above | Same |
| PSUs | ROIC (2026) | 20% | 2024–2026 | Same as above | Same |
| PSUs | ESG: Nutrition – Salt/Sugar Reduction (3-year cumulative) | 10% | 2024–2026 | Same as above | Same |
| RSUs | Time-based RSUs | — | — | 2024 grant vests 1/3 each on Feb 8 of 2025/2026/2027 | — |
Grant mix: 50% RSUs / 50% PSUs in 2024, consistent with 2023 and responsive to shareholder feedback to emphasize performance-based awards . Equity grants occur on pre-determined dates after annual results; no timing around MNPI .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 764,737 shares; includes 109,136 shares via vested SARs; less than 1% of outstanding shares (374,996,934 as of 3/25/2025) |
| Stock Ownership Guidelines | CEO requirement: 6× base salary; unvested RSUs count; SARs and unearned PSUs do not; all continuing NEOs in compliance |
| Hedging/Pledging | Prohibited for executives and directors; short sales and derivative hedges disallowed; pledging prohibited |
| 2024 Stock Vested | 128,377 shares vested; value realized $5,372,690; no SAR exercises in 2024 |
| Upcoming RSU Vesting | 2022 RSUs: half on Feb 10, 2025 & 2026; 2023 RSUs: half on Feb 9, 2025 & 2026; 2024 RSUs: one-third on Feb 8, 2025/2026/2027 |
| Outstanding PSUs | 2023 PSUs (commodity inflation, food waste, GHG, rTSR) scheduled to vest based on performance on 12/31/2025; 2024 PSUs scheduled to vest based on performance on 12/31/2026 |
| Outstanding SARs | Grants include: 80,197 @ $26.56 exp 2/10/2027; 186,151 @ $40.29 exp 2/9/2028; 186,100 @ $41.66 exp 2/7/2029; 187,063 @ $42.71 exp 2/7/2030; 128,991 ex./42,998 unex. @ $57.39 exp 2/5/2031; 104,484 ex./104,485 unex. @ $50.16 exp 2/10/2032 |
Trading policy prohibits speculative trading; combined with scheduled RSU vests, near-term insider selling pressure is more likely to reflect withholding/tax events than discretionary sales .
Employment Terms
| Provision | Key Terms |
|---|---|
| Executive Severance Plan (no CIC) | CEO: cash severance = greater of PRC statutory severance + 5× average monthly salary or monthly base + 1/12 of target bonus × 24; pro-rata bonus if termination on/after June 30; pro-rata vesting of RSUs/SARs/PSUs (PSUs based on actual performance); forfeiture for cause |
| Change-in-Control Severance Plan | CEO severance multiple: 30× monthly base + 1/12 of greater of target or most recent bonus; health coverage at active rates up to 1 year; outplacement up to $25,000; double-trigger vesting: RSUs/SARs fully vest upon CIC + qualifying termination; PSUs vest based on greater of actual-to-date or target (target if CIC+termination in first year) |
| Restrictive Covenants | Non-disclosure, non-competition, non-solicitation, non-disparagement; consideration equal to 5× average monthly salary upon non-CIC termination; offsets to avoid double payments |
| Clawback (Compensation Recovery Policy) | Dodd-Frank Section 954 compliant; recoupment of performance-based awards over prior three fiscal years after material restatement; extends to non-executive employees whose misconduct causes restatement |
| Equity Grant Policy | Pre-determined grant dates post-earnings; no timing around MNPI; no backdating; no repricing without shareholder approval |
Estimated severance economics (12/31/2024):
- Termination without cause (no CIC): Total $15,875,581 (cash severance $8,550,000; pro-rata RSUs $3,369,143; pro-rata PSUs $3,955,049; release payment $1,389) .
- CIC + qualifying termination: Total $34,067,958 (cash severance $15,853,125; RSU acceleration $9,490,848; PSU acceleration $8,682,912; health coverage $16,073; outplacement $25,000) .
Board Governance
- Board service: Director since July 2017; not independent (current CEO) .
- Committees: None (employee director); Board committees are fully independent; independent Chair (Fred Hu) .
- Board processes: Annual election; majority voting; independent executive sessions led by Chair; 99% attendance across Board/committees in 2024; Board met 7 times; committees met 27 times .
- Independence/dual-role implications: Separation of Chair and CEO roles mitigates CEO-director dual-role concerns; robust governance (stock ownership policies, prohibited hedging/pledging) supports independence oversight .
- Director compensation: Employee directors do not receive additional Board pay; non-employee directors paid primarily in equity with retainers/committee fees; share retention policy for directors .
Performance Compensation – Detailed Tables
CEO STI Formula and Result
| Component | Value |
|---|---|
| Base Salary | $1,425,000 |
| Target Bonus % | 200% |
| Target STI | $2,850,000 |
| Team Performance Factor | 66% |
| Individual Performance Factor | 130% |
| Final STI Payout | $2,445,300 |
PSU Metrics and Design
| Metric | Weighting | Benchmark/Definition | Notes |
|---|---|---|---|
| rTSR vs MSCI China Consumer Discretionary | 30% | Percentile vs index constituents | Added for industry relevance; negative TSR cap at target |
| rTSR vs S&P 500 Consumer Discretionary | 15% | Percentile vs index constituents | Additional cross-market reference |
| System Sales Growth | 25% | 3-year CAGR | Long-term revenue growth focus |
| ROIC (2026) | 20% | 2026 ROIC | Capital efficiency emphasis |
| ESG: Nutrition | 10% | 3-year salt/sugar reduction goals | Aligned with public commitments |
| Payout Range | — | Threshold/Max = 40%/200% | Dividend equivalents accrue and are adjusted to vesting outcome |
Compensation & Incentives – Multi-Year Summary (CEO)
| Year | Stock Awards ($) | SAR Awards ($) | Non-Equity Incentive ($) | Total ($) |
|---|---|---|---|---|
| 2022 | 6,035,116 | 3,250,011 | 4,788,000 | 15,892,879 |
| 2023 | 10,000,132 | — | 4,916,250 | 20,335,792 |
| 2024 | 10,000,081 | — | 2,445,300 | 14,222,077 |
Equity Ownership & Vesting Detail (CEO)
| Category | Amount | Date/Terms |
|---|---|---|
| Beneficial shares | 764,737; includes 109,136 via vested SARs; <1% | As of 3/25/2025 |
| 2024 RSUs unvested | 128,230; MV $6,176,825 | 1/3 on Feb 8, 2025/2026/2027 |
| 2024 PSUs target | 114,193; MV $5,500,677 | Performance period 2024–2026; vest 12/31/2026 |
| 2023 RSUs unvested | 55,357; MV $2,666,530 | Half on Feb 9, 2025 & 2026 |
| 2023 PSUs target | 66,063; MV $3,182,235 | Performance period 2023–2025; vest 12/31/2025 |
| SARs exercisable (sample) | 80,197 @ $26.56 | Exp 2/10/2027 |
| SARs exercisable (sample) | 186,151 @ $40.29 | Exp 2/9/2028 |
| SARs exercisable (sample) | 186,100 @ $41.66 | Exp 2/7/2029 |
| SARs exercisable (sample) | 187,063 @ $42.71 | Exp 2/7/2030 |
| SARs ex./unexercisable | 128,991 ex. / 42,998 unex. @ $57.39 | Exp 2/5/2031; remainder vested 2/5/2025 |
| SARs ex./unexercisable | 104,484 ex. / 104,485 unex. @ $50.16 | Exp 2/10/2032; half unex. vest 2/10/2025 & 2/10/2026 |
| 2024 vested shares | 128,377 | Value realized $5,372,690 |
Director Compensation (Employee Director)
- Employee directors receive no additional Board compensation; director share retention policy prohibits sale of director compensation shares for at least 12 months post-departure .
Compensation Committee & Peer Group
- Compensation Committee: Independent directors; chaired by Min (Jenny) Zhang; uses independent consultant; conducts competitive benchmarking; revised peer group in Nov 2024 to 12 U.S. and nine non-U.S. companies .
- Executive compensation practices: pay-for-performance, majority variable/LTI; double-trigger vesting under CIC; no tax gross-ups for CIC; no repricing/backdating; annual say-on-pay (93% approval in 2024) .
Related Party Transactions & Risk Indicators
- No related person transactions from Jan 1, 2024 through proxy date .
- Hedging/pledging prohibited ; equity grant timing policy; clawback policy .
- KFC team factor was discretionarily adjusted to 66% to recognize brand performance and retention needs; CEO STI determined via standard formula including individual factor .
Investment Implications
- Alignment: Heavy emphasis on at-risk, performance-based LTI with rTSR, ROIC and system sales growth increases alignment with shareholder value creation; negative TSR cap reduces windfall risk .
- Retention risk: Robust severance economics (24× salary+bonus multiple in standard case; 30× under CIC) and pro-rata/accelerated equity vesting reduce voluntary departure risk but raise CIC transaction costs, potentially deterring hostile M&A .
- Insider supply: Scheduled RSU vesting through 2027 and PSU vesting in 2025/2026 imply predictable share issuance/withholding; with hedging/pledging prohibited and beneficial ownership <1%, near-term selling pressure likely modest relative to float .
- Governance: Independent Chair and high Board attendance mitigate dual-role concerns; strong say-on-pay support and responsive program changes (adding ROIC; refining rTSR benchmarks) reduce compensation-related overhang .