Chipotle 2009 Annual Report Download - page 88

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The committee’s policy is to make SOSAR grants only on an annual basis, within five business days
following our public release of financial results for the previous year. We plan not to grant SOSARs outside of
this annual award cycle, absent exceptional circumstances (including in the case of certain key hires). Future
performance share awards will be made in conjunction with the vesting or expiration of the previous award. The
committee may in exceptional circumstances determine to make additional equity awards at other times during
the year.
Benefits and Perquisites
We provide our executive officers with access to the same benefits we provide all of our full-time
employees. We also provide our officers with perquisites and other personal benefits that we believe are
reasonable and consistent with our compensation objectives, and with additional benefit programs that are not
available to all employees throughout our company.
Perquisites are generally provided to help us attract and retain top performing employees for key positions,
and in some cases perquisites are designed to facilitate our executive officers bringing maximum focus to what
we believe to be demanding job duties. In addition to the perquisites identified in notes to the Summary
Compensation Table below, we have occasionally allowed executive officers to be accompanied by a guest when
traveling for business on an airplane chartered by us. Executive officers have also used airplanes that are
available to us through our charter relationship for personal trips; in those cases the executive officer has fully
reimbursed us for the cost of personal use of the airplane. Our executive officers are also provided with personal
administrative services by company employees from time to time, including scheduling of personal appointments
and performing personal errands. We believe that the perquisites we provide our executive officers are currently
consistent with market practices, and are reasonable and consistent with our compensation objectives.
We have also established a non-qualified deferred compensation plan for our senior employees, including
our executive officers. The plan allows participants to defer the obligation to pay taxes on certain elements of
their compensation while also potentially receiving earnings on deferred amounts. We believe this plan is an
important retention and recruitment tool because it helps facilitate retirement savings and financial flexibility for
our key employees, and because many of the companies with which we compete for executive talent provide a
similar plan to their key employees.
Discussion of Executive Officer Compensation Decisions
Assessment of Company Performance
The committee generally sets the base salaries of, and makes long-term incentive awards to, the executive
officers in February of each year. In making these decisions, the committee references our company performance
primarily by comparing our sales growth, net income growth and total shareholder return over the preceding
three-year period to the same measures for the restaurant peer group described above. In February 2009, the
committee referred to these performance measures for the preceding three years, weighting 2008 performance at
50 percent, 2007 performance at one-third and 2006 performance at one-sixth. On that basis, the committee
determined that our sales growth was at the 99th percentile of the peer group, our growth in net income was at
the 84th percentile, and total return to our shareholders was at the 55th percentile. This assessment of company
performance is only one factor used by the committee in making compensation decisions, as described in more
detail below, but does play a significant role in the committee’s decision-making, consistent with our
pay-for-performance philosophy. Because of our strong performance in 2008 and prior years relative to market-
wide performance in our industry, the committee generally set compensation levels for our executive officers for
2009 in the upper end of the ranges that the committee believed to be appropriate for each executive officer.
24
Proxy Statement