CHIPOTLE MEXICAN GRILL (CMG) PROXY BALLOT INCLUDES
SHAREHOLDER PROPOSAL TO INTEGRATE SUSTAINABILITY PERFORMANCE INTO EXECUTIVE PAY PACKAGE
Proponents Argue Better C-Suite Oversight Might Have Averted
Current Health and Safety Challenges
March 21, 2016
CONTACT: Shelley Alpern, Director of Social Research & Shareholder Advocacy
Clean Yield Asset Management – (802) 526-2525, x 103
Proponents of a shareholder proposal at Chipotle Mexican Grill (NYSE: CMG) calling for the integration of sustainability performance metrics into executive pay calculations have posted an open letter to fellow shareholders on the Securities and Exchange Commission web site.
The popular burrito chain has seen its sales and shares price fall in recent months due to outbreaks of E. coli and norovirus in multiple locations that have sickened hundreds and prompted an ongoing federal investigation.
The proposal cites the company’s food-borne illness crisis as just one example of why the proposed modification in executive compensation should be undertaken. Shareholders might also benefit from linking pay to other potentially material issues such as carbon emissions, energy usage, water consumption and worker pay and satisfaction.
Despite the company’s history of rewarding its two founding CEOs, Steve Ells and Monty Moran, exceedingly generous pay packages, it has never required direct oversight and accountability of sustainability matters, including the basic health and safety of its food offerings. Chipotle was named to the annual “100 Most Overpaid CEOs” list for 2015 and 2014, and is estimated by GlassDoor.com to have paid its CEOs more than 1,500 times the company’s median salary in 2014.
“We believe in Chipotle’s ‘Food With Integrity’ mission,” said Shelley Alpern of Clean Yield Asset Management, the filer of the proposal, “but as we’re finding out, integrity is just an empty slogan if it is not backed up with accountability, transparency and oversight. Incenting senior executives to directly oversee sustainability matters will ensure that comprehensive and systematic change is driven from the top for the long term. More is called for than simple crisis management measures.”
Natasha Lamb, Director of Research & Shareholder Engagement at Arjuna Capital, said, “Chipotle has long relied on a loyal customer base that cares about fresh, local, organic food, but he strength of that following is being compromised in this recent crisis. If Chipotle is going to revive its brand it needs to take a good hard look at the outcomes it is incenting through executive pay.”
The 10-page filing discusses the uptake of the executive pay/sustainability measure linkage among other corporations, its endorsement by prominent investor groups, and academic and think tank studies linking superior sustainability and financial performance with the presence of the requested policy.
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Clean Yield Asset Management is a registered investment manager based in Norwich, Vermont. Clean Yield focuses exclusively on socially responsible asset management, offering clients customized equity and balanced portfolios and the opportunity to invest in high social impact vehicles.
Arjuna Capital, a division of Baldwin Brothers Inc., a registered investment advisor, is a sustainable wealth manager working to build and preserve clients’ wealth through enlightened engagement in the capital markets.Tags: Chipotle Mexican Grill, executive compensation, Executive pay