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The bonus tied to environmental and diversity goals increased to 15% from 10% last year.

Chipotle increases executive bonus tied to ESG goals

2022 targets upped for reaching milestones on sustainability and diversity

Chipotle Mexican Grill has increased the executive incentive bonus tied to achieving certain sustainability goals, the company said Wednesday.

For 2022, up to 15% of officers' annual incentive bonus is based on the company's progress toward reaching certain milestones in Environmental, Social and Governance, or ESG, targets. Last year, 10% of the bonus was tied to ESG.

“Chipotle’s ESG goals are designed to motivate our executive leadership team to make responsible business decisions that Cultivate A Better World,” said Laurie Schalow, Chipotle’s chief corporate affairs and food safety officer, in a statement. “As a company with over 3,000 restaurants and nearly 100,000 employees, we have a responsibility to transparently share our progress and drive positive change.”

For 2022, the 3,000-unit chain is increasing its goal for purchasing better-for-the-planet ingredients, pledging to buy at least 57 million pounds of organic, transitional and/or locally grown ingredients, up from 55 million pounds purchased in 2021. Rice and beans are excluded from the goal, however, due to what the company called “external crop factors.”

Last year, Chipotle pledged $5 million over five years to support young farmers that follow the chain’s Food With Integrity standards, and has backed the National Young Farmers Coalition to further planet-friendly practices.

In terms of people development, Chipotle plans to increase the diversity of candidates in the promotion pipeline beyond the current 60% goal for positions like field leaders, team directors and regional vice president.

The company did not disclose data on the diversity of people in those positions. But Chipotle in 2021 achieved its goals of maintaining racial and gender pay equity, the company said, based on an analysis conducted by a third-party. The chain also implemented a “robust crew pay strategy to ensure consistent and equitable pay decisions” across the organization.

In October, Chipotle launched a Leadership Evolution and Development, or LEAD, program designed to accelerate the capabilities of those with potential to move into more senior or critical roles. In 2021, 90% of restaurant management roles were filled with internal promotions.

Chipotle also pledged to continue the reduction of greenhouse gas emissions by at least 5% in 2022, in its ongoing plan to reduce emissions by 50% over a 2019 baseline by 2030. More detail on emission reductions will be announced in the company’s annual Sustainability Report update this spring.

Other restaurant chains have also tied executive compensation to meeting certain goals tied to fostering diversity, including Starbucks, Noodles & Company and McDonald’s.

CORRECTION: This story has been updated to clarify the nature of the bonus. 

Contact Lisa Jennings at [email protected]

Follow her on Twitter: @livetodineout

TAGS: Workforce
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