Chipotle 2012 Annual Report Download - page 113

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We have implemented the Amended and Restated 2006 Cash Incentive Plan as an umbrella plan under
which the AIP bonuses are paid in order to ensure that we can deduct the amount of the payouts from our
reported income under Section 162(m). Under the 2006 plan, the committee sets maximum bonuses for each
executive officer and other key employees. If the bonus amount determined under the AIP for participants in the
2006 plan is lower than the maximum bonus set under the 2006 plan, the committee has historically exercised
discretion to pay the lower AIP bonus rather than the maximum bonus payable under the 2006 plan. In instances
where the committee has determined to pay bonuses in excess of those determined under the AIP, such additional
bonuses were paid under the 2006 plan and, in combination with AIP bonuses, were less than the maximum
bonuses fixed under the 2006 plan.
The 2014 Cash Incentive Plan being proposed for approval in proposal D will, if approved, replace the 2006
plan, which will be terminated and of no further effect following the payouts for the 2013 plan year.
Accounting Rules
Various rules under generally accepted accounting principles determine the manner in which we account for
equity-based compensation in our financial statements. The committee may consider the accounting treatment
under Financial Accounting Standards Board Accounting Standards Codification Topic 718 (FASB Topic 718)
of alternative grant proposals when determining the form and timing of equity compensation grants to our
executive officers. The accounting treatment of such grants, however, is not generally determinative of the type,
timing, or amount of any particular grant of equity-based compensation the committee determines to make.
COMPENSATION COMMITTEE REPORT
The Compensation Committee reviewed and discussed the Compensation Discussion and Analysis included in
this Proxy Statement with management. Based on such review and discussion, the Compensation Committee
recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy
Statement for filing with the SEC.
The Compensation Committee.
Darlene J. Friedman, Chairperson
Patrick J. Flynn
Jeffrey B. Kindler
43
Proxy Statement