Wendy's International (WEN)

Elements of Compensation

Throughout 2008, the Company’s overall compensation program (which is referred to as the “Executive Compensation Program”) was designed to achieve the Company’s business objectives, with particular emphasis on attracting and retaining top quality talent in a highly competitive market, motivating the Company’s executive officers during the negotiation and implementation of the merger and rewarding the Company’s executive officers for successfully completing the merger. The compensation goal is to provide its executive officers with a total compensation package that—at expected levels of performance and consistent with an executive’s area of responsibility—is generally intended to be competitive with compensation opportunities that might otherwise be available to executives of similar experience and standing in the competitive market.

There are three primary components of executive compensation: (i) base salary; (ii) annual performance-based bonus awards, including cash bonuses under the 1999 Executive Bonus Plan, and (iii) long-term equity compensation under the Company’s equity plans.

25

During periods prior to the merger, the Company historically targeted pay against the quick serve restaurant and broader chain restaurant industry using disclosed pay practices of 20 publicly-traded companies (“Legacy Proxy Peer Group”) and the Chain Restaurant Compensation Association (“CRCA”) executive compensation surveys. The CRCA survey includes pay data on 101 restaurant companies managing 185 concepts. The data from the Legacy Proxy Peer Group and the CRCA survey was supplemented by broader retail and general industry market pay data where restaurant industry data were not available or were insufficient. The Legacy Proxy Peer Group is listed below. The Legacy Proxy Peer Group was used for determining compensation levels for Arby’s executive officers in 2008, prior to the merger.

In December 2008, the Company made adjustments to compensation (both cash and equity) for executive officers that took into account published survey data for companies of comparable revenue operating across general industry sectors and in the retail and chain restaurant sectors, as well as proxy statement data for a peer group of 14 publicly-traded chain restaurant companies (“New Proxy Peer Group”). The New Proxy Peer Group was selected based on Wendy’s peer group, with additions and deletions based on merger and acquisition activity, the Company’s competitors and availability of public data and is listed below.