Chipotle Mexican Grill 2023 Fair Elections

Chipotle Mexican Grill 2023 Fair Elections

Chipotle Mexican Grill 2023. Fair Elections is just one of several issues to be voted on before the annual meeting at 8:00 am Pacific on May 25, 2023. Vote AGAINST Baldocchi, Engles, Fili-Krushel, Gutierrez, Niccol, Winston, pay, auditor; FOR Fair Elections #5, Free Association #6. You cannot just join the meeting with your control number. You must register in advance. If you want to vote at the meeting, you will need to obtain a legal proxy. Chipotle has chosen Mediant to support its online meeting. During my last AGM, where Mediant was used, they failed to open my phone line so that I could present my proposal. I pre-recorded my presentation for this meeting. Hopefully, that will go better.

The Shareholder CommonsChipotle Mexican Grill, Inc., together with its subsidiaries, owns and operates Chipotle Mexican Grill restaurants. It offers burritos, burrito bowls, quesadillas, tacos, and salads.  I voted with the Board’s recommendations 29% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A).  Read Warnings. Good corporate governance generally results in better profits and a better society. However, I don’t prioritize profits over our natural environment and human needs, especially when companies externalize costs. (see The Shareholder Commons)

Chipotle Mexican Grill 2023: ISS Rating

Chipotle Mexican Grill, Inc.’s ISS Governance QualityScore as of May 1, 2023, is 6. The pillar scores are Audit: 9; Board: 5; Shareholder Rights: 6; Compensation: 4.

Corporate governance scores courtesy of Institutional Shareholder Services (ISS). Scores indicate decile rank relative to index or region. A decile score of 1 indicates lower governance risk, while a 10 indicates higher governance risk.

Chipotle Mexican Grill  2023: How I Voted

ItemEgan-Jones RecommendationManagement Recommendation
1.1-1.9 – Election of DirectorsFor, except Baldocchi, Engles, Fili-Krushel, Gutierrez, NiccolAgainst: Baldocchi, Engles, Fili-Krushel, Gutierrez, Niccol, Winston
2 – Advisory Vote to Approve Executive CompensationAgainstAgainst
3 – Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation1 Year1 YEAR
4 – Ratification of the Appointment of Independent AuditorsAgainstAgainst
5 – Shareholder Proposal Requesting Certain Limits on Bylaw AmendmentsForFor
6 – Shareholder Proposal Requesting Adoption of a Non-Interference PolicyForFor

Chipotle Mexican Grill  2023 Votes ExplainedEgan-Jones

CEO compensation of $17M/yr is too much, even if it is half the $34M awarded in 2020. Remember, this is for a year, not a lifetime. I’m voting against most pay plans that are 200 times the median pay. This one is 1,073 to 1.

E-J recommended against the pay package as too high.”The Company’s compensation policies and procedures are not effective or strongly aligned with the long-term interest of its shareholders.” They recommend against several directors for being on the compensation committee, Baldocchi for being over-tenured, and Niccol because of cybersecurity weakness at the company. My settings at iconik also led me to vote against Niccol (chair should be independent) and Winston (overboarded). EJ also recommends against auditors that have served longer than 7 years. Ernst & Young LLP has served 26 years so that independence could be compromised.

As You SowIconikapp Of course, I voted for our proposal on Fair Elections, #5. I also voted with proposal #6, in favor of a Noninterference Policy allowing freedom of association and collective bargaining.

I had help with my voting from Egan-Jones, my own proxy voting policy through Iconikapp. and by briefly looking and some funds that announce their votes in advance. Note: you can automate all your proxies to be voted according to human values by signing up for the iconik/AYS app. In about two minutes, you’ll vote all your proxies according to values that balance environment, social, governance, and profitability. More information at Free Proxy Advisor From As You Sow & Iconikapp. I have a more customized version, so your results with the iconik/AYS app may differ. Now, you can also sign-up for automated voting with iconikapp through Third Act.
Third Act

Chipotle Mexican Grill  2023: My Fair Elections Proposal

This proposal is from me, James McRitchie. In 2002 I petitioned the SEC for proxy access. It took three rulemakings and a court battle. More than 20 years later, 81% of S&P 500 companies, including Chipotle, have something called proxy access. Unfortunately, it requires that nominating groups hold 3% for 3 years AND groups are limited to 20 members.

That sets up a situation where proxy access can’t really be done without one of the Big Four fund families. They administer retirement savings plans for companies and have never even filed a shareholder proposal, let alone challenged directors. Therefore, proxy access has gone unused.

Now, after decades, the SEC adopted Rule 14a-19, allowing shareholders, under specified conditions, to split votes between board nominees and challengers without attending and voting at annual meetings. Will the universal proxy rule go the way of so-called proxy access?

After reading bylaws adopted by Masimo, Bloomberg’s Matt Levine speculated that company bylaws might demand challengers submit disclosures on paper woven from unicorn manes, with requirements waived for the board’s nominees.

Fair Elections: Refusal to Negotiate

Chipotle’s opposition statement notes, “Our bylaws require only such information as is reasonably necessary to enable all shareholders to make informed decisions when electing directors.” Who determines what is reasonable? The Board, unless you are willing to go to court.

Most can agree there should be some limits on what Boards can require without seeking shareholder approval in advance or at least within a year or so of adoption. I filed 30 proposals like the one before you. We reached agreements at about 1/3 of the companies based on guardrails that preserve the rule’s intent.

All shareholder proposals are advisory. Even if we win overwhelmingly, boards are free to ignore them or to adopt whatever they please. But, of course, higher votes do influence the board AND proxy advisors.

Your vote FOR this proposal can help us reach an agreement with Chipotle that protects shareholder rights, either before the next annual meeting or after an even higher vote next year based on a revised proposal that reflects agreements reached with other companies.

Please Vote FOR proposal Number 5.

Chipotle Mexican Grill  2023: Other Recommendations

You might want to check how a few funds voted. Use our Shareowner Action Handbook.

Chipotle Mexican Grill  2024: Mark Your Calendar

Any proposal of a shareholder intended to be included in our proxy statement and form of proxy/voting instruction card for the 2024 annual meeting of shareholders pursuant to SEC Rule 14a-8 must be received by us no later than December 12, 2023, unless the date of our 2024 annual meeting is more than 30 days before or after May 25, 2024, in which case the proposal must be received a reasonable time before we begin to print and send our proxy materials. All proposals must be addressed to Chipotle Mexican Grill, Inc., 610 Newport Center Dr., Suite 1100, Newport Beach, CA 92660, Attn: Corporate Secretary.


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