Investors in Chipotle Mexican Grill (CMG) voted overwhelmingly on Thursday against the way the fast-food company compensates its senior executives.
During the Mexican food chain’s annual meeting in Denver, a stunning 77 percent of shareholders voted against ratifying the current executive compensation plan that had awarded more than $300 million to its founder Steve Ells and his co-chief, Montgomery F. Moran, in recent years.
The vote against the company-backed “say-on-pay” proposal, while advisory and non-binding, was the most profound shareholder rejection of any measures this year.
Chipotle is taking the rebuke “very seriously,” according to spokesman Chris Arnold.
“It has always been, and continues to be, a top priority that our compensation programs are driving the creation of shareholder value,” he said in a statement.
Big pension funds including Calpers, the NY City pension funds and the Florida State Board of Administration voted against the measure too.
The CtW Investment Group, which advises union-sponsored pension funds, applauded the vote against the famed burrito chain’s generous compensation plan that awarded $58 million to its co-CEOs last year alone.
“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 Investment Group was quoted as saying by AFP, adding that “Chipotle’s unbalanced approach to human capital management poses unacceptable risks to shareholders.”
The Chipotle shareholder vote came as fast-food workers in Miami, New York and other cities have joined a national and world-wide walk out as they push for higher wages.
Shares in the $15.40 billion market cap company fell $8.40, or 1.67%, on Thursday to close at $495.92. They’re now up 34% on a y/y basis and off about 20% from their March $622.90 all-time high.