Chipotle 2012 Annual Report Download - page 94

PROPOSAL D
PROPOSAL TO APPROVE THE CHIPOTLE MEXICAN GRILL, INC. 2014 CASH INCENTIVE PLAN
Introduction
We are asking that our shareholders approve a new Chipotle Mexican Grill, Inc. 2014 Cash Incentive Plan.
If approved by shareholders, the 2014 Cash Incentive Plan would replace the Chipotle Mexican Grill, Inc.
Amended and Restated 2006 Cash Incentive Plan, as last amended and approved by our shareholders on May 21,
2008.
We have structured the 2014 Cash Incentive Plan in a manner that is intended to allow the Compensation
Committee to grant “performance-based compensation” that is exempt from the $1 million deduction limitation
under Section 162(m) of the Internal Revenue Code. We are submitting the plan for shareholder approval at the
meeting so that payments made to our executive officers under the plan (the amount of which we intend to be
determined under our Annual Incentive Plan, as described below under “Executive Compensation—
Compensation Discussion and Analysis—Components of Compensation—Annual Incentives”) may qualify as
performance-based compensation that is fully deductible for federal income tax purposes.
If approved by shareholders at the meeting, bonuses to be paid to our executive officers and key employees
under the AIP, beginning with our 2014 fiscal year, will be covered by and paid in accordance with the 2014
Cash Incentive Plan. Payments under the 2014 Cash Incentive Plan will be contingent upon our achieving the
performance goal established in the plan (as further described below under “Performance Goal”). No additional
disclosure or approval of the performance goal under the 2014 Cash Incentive Plan will be required in the future
unless the Compensation Committee of our Board, which will administer the plan, changes the material terms of
the performance goal or other material terms of the 2014 Cash Incentive Plan.
If shareholders do not approve the 2014 Cash Incentive Plan, our Compensation Committee will be unable
to grant annual cash incentive opportunities that will be exempt from the $1 million deduction limitation under
Section 162(m) after this annual shareholder meeting.
A copy of the 2014 Cash Incentive Plan, as proposed, is attached to this proxy statement as Annex A, and
this discussion is qualified in its entirety by reference to the full text of the plan document.
Description of the 2014 Cash Incentive Plan
The significant features of the 2014 Cash Incentive Plan are described below.
Administration
Our Compensation Committee will administer the 2014 Cash Incentive Plan and have the authority to grant
awards upon such terms, not inconsistent with the terms of the plan, as it considers appropriate. In addition, the
committee will have complete authority to interpret all provisions of the plan, to adopt, amend, and rescind rules
and regulations pertaining to the administration of the plan, to make all other determinations necessary or
advisable for its administration, and to reduce or eliminate, in its discretion, the amount of any award otherwise
payable under the plan.
Eligibility
Only executive officers and key employees are eligible to participate under the 2014 Cash Incentive Plan.
Currently, we expect that approximately 15 of our employees will participate in the plan for the 2014 calendar
year.
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Proxy Statement