Black or pinto, equity or cash, the executive compensation package at Chipotle has been a bloated burrito for too many years. While the food safety crises faced by Chipotle in 2015 may not be directly linked to the company’s continuing extraordinary executive compensation, they give shareholders another reason to vote against compensation this year. While the board has made some changes – most of which fall into the “too little, too late” category –the fundamental issues of Chipotle’s compensation remain the same: the company has two CEOs and pays them each too much.Chipotle received a bit of positive press when its preliminary proxy came out for the fact that because results “fell significantly short” of performance targets, no 2015 bonuses were awarded to executive officers. But the fact that anyone thought the executives might be entitled to an annual bonus at all in a year when the stock price declined by nearly one third indicates the audacious standards that have been reached.
Last year both CEOs received bonuses of over $3 million in cash, and while not receiving that money may have stung slightly, it is important to note that Steve Ells made over $210 million from the cashing in Chipotle stock in the past five years, in addition to his cash compensation. One presumes he has put a bit away to tide him over during this bonus-free year.