Chipotle 2008 Annual Report Download - page 73

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Please find page 73 of the 2008 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.

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by our Board of Directors which sets forth the committee’s role and responsibilities and provides for an annual
evaluation of its performance. The charters of all three standing committees are available on the Investors page of
our corporate website at www.chipotle.com under the Corporate Governance link, and will be provided to any
shareholder without charge upon the shareholder’s written request to our corporate Secretary.
Audit Committee
In accordance with its charter, the Audit Committee acts to (a) oversee the integrity of our financial
statements, system of internal controls, risk management and compliance with legal and regulatory requirements,
and (b) provide an open avenue of communication among our independent auditors, accountants, internal audit
and financial management. The committee’s responsibilities include review of the qualifications, independence
and performance of the independent auditors, who report directly to the Audit Committee. The committee retains,
determines the compensation of, evaluates, and when appropriate replaces our independent auditors and
pre-approves audit and permitted non-audit services provided by our independent auditors. The Audit Committee
has adopted the “Policy Relating to Pre-Approval of Audit and Permitted Non-Audit Services” under which audit
and non-audit services to be provided to us by our independent auditors are pre-approved. This policy is
summarized on page 18 of this proxy statement.
The Audit Committee is required to establish procedures to handle complaints received regarding our
accounting, internal controls or auditing matters. It is also required to ensure the confidentiality of employees
who have provided information or expressed concern regarding questionable accounting or auditing practices.
The Audit Committee may retain independent advisors at our expense that it considers necessary for the
completion of its duties.
The Audit Committee held ten meetings in 2008 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 requirements 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 2008. A report of the Audit Committee is found under the heading “Audit
Committee Report” on page 17.
Compensation Committee
The Compensation Committee oversees our executive compensation policies and programs. In accordance
with its charter, the committee has in past years determined the compensation level of our Chairman and Chief
Executive Officer based on an evaluation of his performance, and has also approved the compensation level of
our other executive officers following an evaluation of their performance and recommendation by the Chief
Executive Officer. Beginning in 2009, the committee has determined the compensation level of each of our
Co-Chief Executive Officers, and the Co-Chief Executive Officers have jointly evaluated and made
recommendations to the committee regarding the compensation of each other executive officer. 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
10
Proxy Statement