Chipotle 2008 Annual Report Download - page 83

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executive officers, the Compensation Committee believes our compensation philosophy to be best effectuated by
designing compensation programs and policies to achieve the following specific objectives:
• Attracting, motivating, and retaining highly capable executives who are vital to our short- and long-
term success, profitability, and growth;
• Aligning the interests of our executives and shareholders by rewarding executives for the achievement
of strategic and other goals that we believe will enhance shareholder value; and
• Differentiating executive rewards based on actual performance.
The committee believes that these objectives are most effectively advanced when a significant portion of
each executive officer’s overall compensation is in the form of at-risk elements such as incentive bonuses and
long-term incentive-based compensation, which should be structured to closely align compensation with actual
performance and shareholder interests.
The committee’s philosophy in structuring executive compensation rewards is that performance should be
measured by comparing our company performance to market-wide performance in our industry, as well was
comparing executive performance to internal goals set by management and our Board of Directors. See
“—Overview of Executive Compensation Determinations—Market Data” below.
Overview of Executive Compensation Determinations
In setting compensation for our executive officers, the committee reviews tally sheet information reflecting
the cash and equity-based compensation paid to each executive officer in each year since the officer started work
with us (or since 1998 in the case of Mr. Ells, our Chairman and Co-Chief Executive Officer), as well as the
accumulated value of all cash and equity-based compensation awarded to each executive officer. The committee
also has historically conducted discussions with Mr. Ells regarding the performance of our other executive
officers, and met in executive sessions to discuss the performance of Mr. Ells. Those discussions, together with
the committee’s review of each executive officer’s historical compensation and accumulated long-term incentive
pay, allow the committee to make compensation decisions in light of each executive officer’s achievement and
other circumstances.
As a result of Mr. Moran’s promotion to Co-Chief Executive Officer in January 2009, beginning in 2009 he
participates in the discussions between Mr. Ells and the committee regarding the performance of our other
executive officers, and the committee meets in executive session to discuss Mr. Moran’s performance and
determine his compensation as well as that of Mr. Ells.
The committee does not “benchmark” the compensation of any of our executive officers in the traditional
sense. Rather, to supplement its review of each executive officer’s historical compensation and performance, the
committee also refers to market data on executive compensation. From this data, the committee determines what
it believes to be competitive market practice and approves individual compensation levels by reference to its
assessment of market compensation, together with historical compensation levels, individual performance and
other subjective factors.
The committee’s outside compensation consultant, Compensation Strategies, also provides input on
compensation decisions, including providing comparisons to market levels of compensation as described below
under “—Market Data.”
During 2008, Mr. Blessing and Mr. Jones were promoted into executive officer roles. Accordingly, the
committee began reviewing and approving their total compensation during 2008 in addition to the compensation
of our other executive officers. We also hired Mr. Crumpacker in 2009, and the committee approved his initial
compensation package and will review and approve his compensation in future years as well.
20
Proxy Statement