Seder & Chandler, LLP
Worcester 508-471-3018
Westborough 508-709-0024

Executive compensation challenges: the Chipotle case

In terms of legal compliance, corporate governance has become a more challenging endeavor in recent years.

After all, within a decade, Congress passed two major laws that affect such governance. One was the Sarbanes-Oxley Act in 2002. This was followed, in 2010, by the corporate regulatory law that is commonly called Dodd-Frank.

These laws address a host of corporate governance issues, from accounting standards to required disclosures about executive compensation.

In this post, we will take note of a breaking news story that raises the issue of executive compensation.

The story concerns a national restaurant chain called Chipotle Mexican Grill. The company is facing sharp criticism from shareholders who contend that executive compensation there is excessive.

Critics point out that a handful of executives – five people - received a total of more than $67 million in compensation last year. This level of compensation appears to be out of line with some other well known companies, such as Coca-Cola and General Electric.

A shareholders’ group at Chipotle is planning to challenge the compensation in a shareholders’ vote later this year. The group sent a letter to the U.S. Securities and Exchange Commission this week, documenting its concerns about excessive compensation.

Not surprisingly, Chipotle’s board defended the company’s executive compensation structure. But clearly the company is under increasing scrutiny for its compensation practices.

It isn’t only that the overall compensation level for top executives is so high. It is also the fact that the company continues to use numerous perks like commuting allowances and housing expenses for its executives that are out of line with many other companies.

Source: The Denver Post, "Shareholder group takes aim at Chipotle executive pay," Aldo Svaldi, April 25, 2014

No Comments

Leave a comment
Comment Information
Get Legal Help Now

Contact Us Today To Learn More

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Worcester Office
339 Main Street
Suite 300
Burnside Building
Worcester, MA 01608

Phone: 508-471-3018
Worcester Law Office

Westborough Office
1900 West Park Drive
Suite 280
Westborough, MA 01581

Phone: 508-709-0024
Westborough Law Office