Chipotle
Meeting: May 18
Chipotle Mexican Grill CEO Brian Niccol’s total reported compensation was $38,035,868 in 2020, a more than 136% increase from 2019. More than 60% of his compensation ($23.2 million) would not have been earned without COVID-related modifications to the compensation plan, making Niccol one of the many CEOs that have cashed out from COVID-related compensation adjustments in 2020. The company was very explicit about the disclosure, including an extra column in the Summary Compensation Table labelled “total excluding COVID-related modifications.”
As Anders Melin reported in early April:
“The company stripped out certain results for March, April and May of 2020, when government restrictions forced it to close restaurants and limit service to delivery and takeout, according to a regulatory filing Monday. Chipotle said it also excluded some cost increases attributable to the pandemic.”
In fact, Chipotle’s modified compensation plan resulted in a combined $64.4 million awarded to its five most senior executives (including Niccol), with each more than doubling their total compensation since 2019. Although Chipotle is seeing rising business, the company has been criticized for some of its labor practices, including poor communication of paid sick leave and cutting “hazard pay” for its frontline employees.
I’ve written about CEO pay at Chipotle on multiple occasions, describing it once as a “bloated burrito.”
The company has a history of high levels of shareholder opposition. In 2019 special retention awards $3.8 and $3 million awards to CTO Curt Garner and CRO Scott Boatwright, respectively, inspired a high level (26%) of shareholder opposition. That year, Chipotle was ranked number 9 on our 100 Overpaid CEOs list. In fact, the company made the list in 2015, 2016, and 2017 as well.
Chipotle’s median employee is "an hourly part-time employee who works roughly 25 hours per week at one of [Chipotle's] restaurants in Illinois" and earns $13,127 – leading to an employee-to-CEO pay ratio of 2,898. A Chipotle spokesperson told Newsweek both that Niccol’s pay “is based on a competitive analysis of CEO pay levels within our peer group and is designed to pay for performance” and that Chipotle employees still made more than their peers. Nevertheless, a recent report found that the company has the fourth largest CEO pay ratio this year of the 100 S&P 500 firms with the lowest median wages, dwarfed only by The Gap (3,113), Western Digital (4,934), and Aptiv (5,294).