Investors in Chipotle Mexican Grill voted overwhelmingly on Thursday against the company’s executive compensation plans, sending a strong rebuke to a company that had awarded more than $300 million to its co-chief executives in recent years.
More than 75 percent of investors voted against Chipotle’s say-on-pay measure, which asked investors to ratify a compensation plan that would continue such payments to Steve Ells, Chipotle’s founder, and his co-chief, Montgomery F. Moran, over the next few years. That was the highest vote against any say-on-pay measure among the country’s largest 3,000 companies this year.
Though the vote is nonbinding, Chipotle said it was taking investor sentiment into consideration.
“We take this very seriously,” a Chipotle spokesman, Chris Arnold, said in a statement. “It has always been, and continues to be, a top priority that our compensation programs are driving the creation of shareholder value. We thank our investors for the feedback we have received on this issue and will continue to engage with our investors as we review our compensation programs that build value for all of our investors.”
Shareholder discomfort with Chipotle’s multimillion-dollar executive compensation plans has grown. At last year’s meeting, 27 percent of shareholders voted against the say-on-pay measure. But in recent months, smaller investors, including the CtW Investment Group, have lobbied big institutional investors to join them in trying to rein in Chipotle’s executive pay.
On Thursday, big pension funds including the California State Teachers Retirement System, Calpers, the New York City pension funds and the Florida State Board of Administration voted against the measure.
“With this overwhelming rejection of the pay plan by the company’s owners, we expect our board to get to work reining in runaway executive pay at Chipotle,” Dieter Waizenegger, director of CtW, said in a statement. “Chipotle’s unbalanced approach to human capital management poses unacceptable risks to shareholders.”