Welcome to the Yum China Holdings Annual Meeting of Stockholders. I will now turn the call over to Fred Hu.
Good morning, ladies and gentlemen. I'm Fred Hu, Chairman of the Board of Yum! China Holdings Incorporated. On behalf of the entire Board of Directors of Yum! China, I'd like to welcome you to Yum China's 2020 Annual Meeting of Stockholders.
United Public Health concerns regarding the COVID-nineteen pandemic and the related to travel restrictions, the Board of Directors has determined that it is prudent to hold the annual meeting in a virtual only format this year. Your understanding is highly appreciated. At this time, I would like to introduce the other Board members present at this meeting. Qiyi Wat, Yum China's CEO, Peter A. Bassi, Christian L.
Campbell, Ed Yuchun Chen, Eduardo Etude, Silver Hand, Louis Share, Ruby Lu, Zdida, William 1. I would like to introduce Mike Cai and Linda Gu, who are representing our independent auditor KPMG, Wazen LLP and Angela Collins of American Election Services LLC, who is serving as Inspector of Elections for this meeting. I would now like to turn the meeting over to Pingping Liu, Corporate Secretary of Yam China. Ping Ping will act as Secretary of this meeting and will lead us through the formal agenda items for today's meeting. Following the conclusion of the formal part of the meeting, management will report to the company's will report to you on the company's performance over the last fiscal year and will be available to respond to questions from stockholders.
Ping Ping?
Thank you, Doctor. Hu. Ladies and gentlemen, we have designed the format of this year's virtual annual meeting to ensure that our stockholders who attend will afford similar rides and opportunities to participate as they would at an in person meeting and refer you to the agenda and the rules of procedure available on the virtual meeting website for information about today's meeting and how stockholders may vote and submit questions during the meeting. On March 27, 2020, a notice of this meeting, including instruction on electronic voting and how to access our proxy statements and our 2019 annual report online, was mailed to all stockholders of a record as of the close of business on March 17, 2020. Being the record date would determine stockholders entitled to vote at this meeting.
This is reflected in the affidavit of mailing, which will be filed with the records of the meeting. The records of the meeting will also reflect forms of proxy that I'm hereby presenting to the meeting. The Inspector of Elections for the meeting has taken an oath of office and has reported to us that on the record date, there were a total of 376,000,001,276 shares of the company's common stock outstanding. The Inspector of the Election also reports that immediately prior to the commencement of this meeting, more than 84% of those shares are present by proxy at today's meeting. Accordingly, a quorum is present.
And I'll now call this meeting to order. The polls are now open for the proposal to be voted on at this meeting. As a reminder, stockholders attending this meeting can vote their shares online from now through the close of the post by logging into the meeting website as a stockholder, entering their 16 digit control number included on the notice, proxy card or voting instructions that accompany their proxy materials and following the instructions on the website. If you have previously voted by proxy and do not wish to change your vote, your vote will be cast as you previously instructed and no further action is required. As stated in the agenda, we have 3 business matters to cover at today's meeting.
Detailed information concerning the matters to be voted on can be found in the proxy statement. The first order of business on the agenda is the vote to elect 11 directors. The Board has nominated the following persons as named in the proxy statements for election as directors to hold office for 1 year term to expire at the 2021 Annual Meeting and until the respective successes have been duly elected and qualified. Doctor. Fred Hu, Ms.
Joey Watt, Mr. Peter A. Betsy, Mr. Christian L. Campbell, Mr.
Ed Yongchang Chen, Mr. Edward Adede, Mr. Cyril Han, Mr. Louis T. Hsieh, Ms.
Ruby Lu, Mr. Zili Xiao, Mr. William Wang. Our bylaws require advance notice to the company's of a stockholder's intent to nominate persons as directors. No such notice was received.
Accordingly, I declared there are no other nominations for directors. The next order of business on the agenda is the vote on the proposal to ratify the appointment of KPMG Huazhong LLP as the company's independent auditor for 2020. The audit committee and the board have recommended the appointment of KPMG Huazhong LLP. The final order of the business on the agenda is the vote on the proposal to approve on an advisory basis the company's named Executive Officer Compensation. Since the company did not receive proper notice of the submission of any other matters to be acted upon at this meeting, in accordance with the company's bylaws, no other matters may be presented.
This concludes introduction of the proposals we presented at the meeting. At this time, we'll be taking comments on proposals. Stockholders who are logged into the meeting website using their 16 digit control number will be able to submit questions by typing them into text box on the meeting page. At this time, we'll only be responding to questions relating to matters being put to your vote. Comments or questions on other matters should be held for until after conclusion of formal meeting of the business.
Since all stockholders have adequate time to vote, It is 8:0:8 a. M. And the polls are now closed. I will now read the preliminary report of Inspector of Elections. Any votes submitted during the meeting, but not reflected in the preliminary report will be included in the final report of Inspector of Elections and disclosed in the report on Form 8 ks to be filed with the SEC within 4 business days of this meeting.
The preliminary report of the Inspector of Election shows that each of the 11 director nominees has been elected with each director nominee having received votes for his or her election in excess of 89% of votes cast with respect to that director's election. The ratification of the appointment of KPMG Huaqiang LLP as the company's independent auditor for 2020 has been approved, with more than 99% of the votes passed in favor of the proposal. The advisory vote on named executive officer compensation has been approved with more than 94% of votes cast in favor of the proposal. This concludes the report of the preliminary voting results. Back to you, Doctor.
Wu.
Thank you, Ping Ping. All businesses properly brought before this meeting now have been acted upon. I hereby join the meeting. Now, I would like to introduce Ms. Julie Watt, the CEO, to give us a presentation.
Thank you, Doctor. Hu. Ladies and gentlemen, good morning, good afternoon and good evening. It's my pleasure to welcome you to the Yum China Annual Stockholder Meeting. It has been an event for a few months since January 2020.
I hope you and your families are healthy and safe. We achieved solid performance in 2019. We opened over 1,000 new stores, the highest annual store opening in our company history. Total revenue grew 9% excluding foreign exchange, driven by both new stores and same store sales growth. Adjusted net income increased 20% to $729,000,000 driven by strong operating profit growth and mark to market gain from our equity investment in Meituan.
We generated over $1,100,000,000 net operating cash and returned over 4.40 dollars to our shareholders through dividends and share repurchases in 2019. Our share price has reflected the resilience of our company, outperforming the S and P 500 by approximately 10% in a year to date period. I have been incredibly proud of how the Yum China team has risen to meet the challenges of this outbreak. While our top priority was and still is the health and safety of our employees and customers, our culture of innovation, our strong operational excellence and our leadership in digital and delivery positions us to thrive. Weathering the storm of all storms gives us confidence to deliver superior value to shareholders over the long term.
Throughout the crisis, we wanted to ensure 3 things: a commitment to value for money, a commitment to supply and a commitment to quality. We wanted to make sure that in a time like this, KFC, Pizza Hut and our other brands will be there to provide reliable quality meals to our customers, especially those in the front lines of fighting this outbreak. About 65% of our stores remained open throughout this period. Even when infection cases were rising, our employees and delivery riders continued to show up providing a vital service in this time of need. Employees are the backbone of our business.
We support them and their families by extending holiday pay and strengthened medical insurance coverage. I have been humbled by the dedication, resilience and creativity of our employees. Even as Wuhan was in lockdown and our stores closed, our people helped with the delivery of meals to the frontline medical staff. We provide over 170,000 free meals to over 1450 hospitals and health centers in 28 provinces in China. In addition, in response to the pandemic, senior executives and Board members have agreed to forego 10% of our base compensation for the rest of this year as contributions to fund additional assistance for frontline employees and their families impacted by COVID-nineteen.
I'm grateful to lead the dedicated team at Yum China. We were able to achieve operating profitability under these extraordinary circumstances in the Q1 of 2020, a testament to our resilient and flexible business model. This crisis offers us opportunities to grow, to create and to build a stronger young China. Now I want to offer some perspectives on our strategy. We are committed to be the world's most innovative pioneer in the restaurant industry.
To achieve this, we rely on ongoing efforts of our employees to live and breathe our vision every single day. Let's start with menu innovation and value propositions. In terms of tasty food and great value, it is our fundamental strategy as a restaurant company. We launched around 300 to 400 new and upgraded products each year in the past 2 years and we will continue to delight and surprise consumers with innovative products. Delivery and takeaway.
Delivery and takeaway have risen as critical business drivers, relying on convenient consumer experience, digitization and safety and efficiency based operational management. In late January, we rolled out a content less delivery on our super app at both KFC and Pizza Hut. Successful takeaway requires digital pre order capability, a suitable menu and packaging and most importantly, value for money. KFC and Pizza Hut has all of these. I'm especially proud of our Pizza Hut brand, which more than doubled takeaway contribution in the Q1 2020 and transform our business model in the long term.
Digital, this outbreak highlighted the importance of online to offline integration. Our investments in digital and technology will continue. Our membership program continue to grow with over 250,000,000 members as of the Q1 of 2020. By integrating the Pizza Hut and KFC Super Apps delivery system, AI enabled menu and recommendations, digital scheduling tools and pocket manager, intelligent stores and etcetera, etcetera. We are transforming the relationships between customers, riders, stores and suppliers.
Let's move to store footprint expansion. To drive competitive advantage and growth, we focused on further expanding our restaurant footprint. We opened on average 2 new stores per day in the past few years. We target 800 to 850 new builds this year and we will reevaluate conditions as the year goes on. We continued to develop our new and emerging brands.
We formed a joint venture with Lavazza and opened the 1st Lavazza Asia flagship store in Shanghai. As part of this pilot program, this store showcases the premium and authentic Italian coffee experience Lavazza has developed over its 125 year history. We completed the acquisition of Guanjiquan, a pioneer of Chinese cinema port casual dining. In conjunction with this acquisition, we established a Chinese dining business unit. The operator has highlighted the importance of having a prudent financial policy.
Therefore, despite having a strong balance sheet, we will temporarily suspend our share repurchases and for the next two quarters dividends. We believe the strength of our balance sheet and capital structure will offer us flexibility to respond to contingencies and continue investments in long term value creating opportunities where appropriate. As I mentioned before in other occasion, Good Times build confidence, bad times build character. We are going to build some character in 2020. At the time of increasing global volatility, this year we will showcase the resilience and optimism of our business to the world.
Thanks to all of you for your trust and support. Thank you. Thank you, Joey. We'll now move on to the Q and A session. This question and answer period will be conducted in accordance with the rules of of using their 16 digit control numbers will be able to submit questions by typing them into a text box on the meeting page through the end of the Q and A session.
Questions and comments should be relevant to matters of concern to stockholders generally. In order to give all stockholders who wish to speak an opportunity, stockholders are limited to 2 questions and the second
Good morning. The first question from a shareholder is as follows. Is there any focus by the Board of Directors on reducing the reported CEO pay ratio of 2,925 to 1? The question obviously, this can be done either by raising the median employee pay or reducing the CEO pay. It seems clear that the current ratio is excessive.
Okay. This is Eikin Yoon, I'm the Chief People Officer of Yum China. Let me take this opportunity to respond to these questions. First of all, all at exception compensations, we it will be for any executive including CEO will be reviewed by our compensation committee with the support of an independent comp consultant. In our case it's Mercer.
The comp consultant typically will provide some benchmarking data in conjunction with the other datas in the market and then jointly give proposal and then the whole thing will be reviewed by the Executive Compensation Committee for approval. Let me go back to addressing the kind of CEO ratios and let me provide some context or as well as the background on how we come up to this 2,925 to 1 ratio. First of all, we didn't take note that we have a huge workforce and over 400,000 employees. But our situation is very unique compared to some other companies. 90% of our workforce are crew member and in fact 76% are part timers and out of that half of them are close to half of them are university students.
The tricky part about part time employee is first of all, we operate in 1300 cities. So they are wage differentials amongst different cities, all right, that's firstly. Secondly, all the part time crew members, they do not work exactly the same hours. So throughout the whole year, some third parties, some crew members will provide more a lot more work hours than the others, right. So the way we select the so called median employee is following the SEC guidance, we select December 31, 2019 as the date in which we select the median employees.
And then essentially what we do is taking into account of the every employees on the payroll on that date, the total compensation for the year and rank them from the top to the bottom, right. So all the way to 400,000 plus employees on the list and then we select the one in the middle. And it happens the medium employees we select that was selected based on the SEC approved methodology. He is a part time crew member, a university student working in our Tier 2 cities, all right. So I think they provide some context about kind of the so called the high the so called high ratio because we are comparing sort of a CEO who is working full time versus a crew member who is working part time.
And at this point in time, I do not have the data about kind of how many hours this person actually worked in 2019. So as you can see here, sort of the comparison is limited, difficult to it's not going to be an apple to apple comparison, but so the ratio was established based on the SEC guidance. That's why I cannot come up to this ratio. I hope this explains the background as well as the methodologies involved and give provide some context into this number.
Thank you. The next question is as follows. Do you foresee any additions or deletions to menus of our restaurants as a result of the pandemic? For example, are there any recipe ingredients that are difficult to obtain in the current pandemic environment? Thank you.
Thank you. Since January end of January, we have been very flexible responding to the closure of some stores. At the most challenging time, we closed over 30% of the stores. When our stores were temporarily closed, we will respond to the challenge immediately. The challenge include the stock, what the food that we have in our stores.
Because we have very good supply chain system, so if we could and in most of cases we could, we will move the food to other store to keep selling. But at the same time, it did create challenges to potential excessive store or potential wastage. And this is the time we call our staff ability and creativity into the situation and there's a very nice way to describe it called we make a virtual out of necessity. So we use our creativity to use the ingredient and create new type of food to still serve our customer. So one example we have mentioned in our earning call is, instead of using the normal milk, we use the very, very high quality Hokkaido milk, which was which is originally for ice cream, but we use it for milk tea.
So that is one example. And then we also use the milk for a tart because during the pandemic the category that was suffered most was ice cream. It's very hard to find any kid to buy ice cream from us during that time. And then on Pizza Hut side, we when we face similar challenge, we have similar creativity. For example, that was the time we start to sell stick, prepare but not cook steak, which was not something we did before, but during the crisis time, we are able to come up with the solution very quickly.
So the answer is yes, we do we did adjust our menu. We are creative enough to do it and we flexible enough to do it and our IT system is quick enough or good enough to support us to do it. For the second half of the question in terms of ingredients that could be difficult to obtain in the current pandemic environment. Overall, over 85% of our ingredients are sourced locally. So just to let our shareholder note that we are doing all right.
And again, because of our amazing supply chain capability, even during the most difficult time, except for those stores that were closed, our supply chain teams did not experience disruption to the supply chain to the supply of ingredients across the country. So on top of the 85 locally sourced ingredient, 15% of course are imported and that include equipment and some ingredients such as cheese or some protein such as steak or even chicken. For all the items that are important, our supply chain team and logistic team maintain healthy safety stock. So for the coming few months, we have looked at our current stock situation. We feel comfortable.
However, of course, if the global supply chain disruption continue for longer than we would like to, then it might create some challenges in the long term. Thank you very much.
Thank you, Joey. There are no further relevant questions at this point.
Thank you all. We have reached the conclusion of our Q and A period. Before you go, let me just say on behalf of all of us at Yum China Holdings, Inc, thank you for attending our Annual Meeting of stockholders. We appreciate your support and we hope to see you at next year's meeting. Thank you all.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.