Chipotle 2012 Annual Report Download - page 82

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Compensation Committee
The Compensation Committee oversees our executive compensation policies and programs. In accordance
with its charter, the committee determines the compensation of our Co-Chief Executive Officers based on an
evaluation of their performance, and approves the compensation level of our other executive officers following
an evaluation of their performance and recommendation by the Co-Chief Executive Officers. The manner in
which the committee makes determinations as to the compensation of our executive officers is described in more
detail below under “Executive Officers and Compensation—Compensation Discussion and Analysis—Overview
of Executive Compensation Determinations.”
The Compensation Committee charter also grants the committee the authority to: review and make
recommendations to the Board with respect to the establishment of any new incentive compensation and equity-
based plans; review and approve the terms of written employment agreements and post-service arrangements for
executive officers; review our compensation programs generally to confirm that those plans provide reasonable
benefits to us; recommend compensation to be paid to our outside directors; review disclosures to be filed with
the SEC and distributed to our shareholders regarding executive compensation and recommend to the Board the
filing of such disclosures; assist the Board with its functions relating to our compensation and benefits programs
generally; and other administrative matters with regard to our compensation programs and policies. The
committee may delegate any of its responsibilities to a subcommittee comprised of one or more members of the
committee, except where such delegation is not allowed by legal or regulatory requirements.
The Compensation Committee has also been appointed by the Board to administer our 2011 Stock Incentive
Plan and to make awards under the plan, including as described below under “Executive Officers and
Compensation – Compensation Discussion and Analysis—Components of Compensation—Long-Term
Incentives.” The committee has in some years, including 2012, delegated its authority under the plan to our
executive officers to make grants to non-executive officer level employees, within limitations specified by the
committee in its delegation of authority.
The Compensation Committee retains outside executive compensation consulting firms to provide the
committee with advice regarding compensation matters and to conduct an annual review of our executive
compensation programs. For 2012, the committee worked with Compensation Strategies, Inc. on executive
compensation matters. Compensation Strategies also occasionally works with our senior human resources staff to
provide us with advice on the design of our company-wide compensation programs and policies and other
matters relating to compensation, in addition to working with the committee on executive compensation matters.
All of the fees paid to Compensation Strategies during 2012 were in connection with the firm’s work on
executive compensation matters on behalf of the committee. Compensation Strategies was retained pursuant to
an engagement letter with the Compensation Committee, and the committee has determined that Compensation
Strategies’ service to Chipotle does not give rise to any conflict of interest, and considers the firm to have
sufficient independence from our company and executive officers to allow it to offer objective advice.
The Compensation Committee held five meetings in 2012 and acted by written consent two times. A report
of the committee is found under the heading “Executive Officers and Compensation—Compensation Discussion
and Analysis—Compensation Committee Report” on page 43.
Compensation Committee Interlocks and Insider Participation
The members of our Compensation Committee are Ms. Friedman (Chairperson) and Messrs. Flynn and
Kindler. There are no relationships between the members of the committee and our executive officers of the type
contemplated in the SEC’s rules requiring disclosure of “compensation committee interlocks.” None of the
members of the committee is our employee and no member has been an officer of our company at any time. The
Board has determined that each member of the committee qualifies as a “Non-Employee Director” under SEC
Rule16b-3 and as an “Outside Director” under Section 162(m) of the Internal Revenue Code of 1986, as
amended, and has determined that each member will satisfy the newly-adopted NYSE standards for
12
Proxy Statement