Chipotle 2013 Annual Report Download - page 85

Download and view the complete annual report

Please find page 85 of the 2013 Chipotle annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 164

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164

described under “Corporate Governance—Role of the Board of Directors in Risk Oversight.” The committee
may retain independent advisors at our expense that it considers necessary for the completion of its duties.
The Audit Committee held eight meetings in 2013 and acted by written consent one time. The members of
the Audit Committee are Messrs. Baldocchi (Chairperson), Charlesworth and Flanzraich. Our Board of Directors
has determined that all of the Audit Committee members meet the enhanced independence standards required of
audit committee members by regulations of the SEC, and are financially literate as defined in the listing
standards of the NYSE. The Board has further determined that Mr. Baldocchi qualifies as an “Audit Committee
Financial Expert” as defined in SEC regulations.
No member of the Audit Committee served on more than three audit or similar committees of publicly held
companies, including Chipotle, in 2013. A report of the Audit Committee is found under the heading “Audit
Committee Report” on page 23.
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 2013, 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 2013, 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 2013 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.
13
Proxy Statement