If you think the burritos at Chipotle are getting expensive, consider the price of the company’s top execs. Proxy advisory firm ISS on Friday blasted lavish pay packages for the Mexican-food chain’s two CEOs, who together earned $58 million last year, capping a a three-year run in which they’ve pocketed a combined $300 million.
Shareholders should vote against Chipotle’s compensation plan at the company’s May 15 annual meeting, ISS advised — a recommendation that could result in a majority protesting the pay plans for CEOs Steve Ells and Monty Moran.
“Chipotle has not one, but two of the highest-paid CEOs in its peer group,” said New York City Comptroller Scott Stringer, noting that this year will be the fourth in a row that the city’s pension funds have voted against Chipotle’s “say on pay” proposal.
“A combined $58 million in CEO pay for a fast food company isn’t just excessive — it’s indefensible,” Stringer said. ISS said Ells and Moran have been given heaps of stock options in recent years in exchange for clearing extremely low performance hurdles. To make matters worse, the execs appear to be selling the shares soon after getting them, with neither owning a significant stake in the company.
In response, Chipotle said it has had “four or five conversations” with its largest investors, which were of “two mind-sets” about the company’s CEO pay, with some saying “the equity grants have become too large.”
“If further feedback from long-term investors suggests that changes are needed the compensation committee will no doubt consider making them,” Chipotle said in its response. Chipotle shares closed Friday at $501.77, off a high of $622.90 seen in March.