Two big pension funds have lined up against Chipotle Mexican Grill Inc.'s executive pay package for Steve Ells, chairman of the company's board and co-CEO; Montgomery F. Moran, co-CEO; and two other top executives.
The $191.2 billion California State Teachers' Retirement System, West Sacramento, and the $185.1 billion Florida State Board of Administration, Tallahassee, plan to vote against the executive pay in non-binding say-on-pay voting, according to their proxy-vote disclosures.
The C$154.4 billion ($127 billon) Ontario Teachers' Pension Plan, Toronto, plans to vote in favor of the executive compensation, according to its proxy voting disclosure. Proxy-voting advisory firms Institutional Shareholder Services and Glass Lewis & Co. each recommend clients support the executive pay.
Mr. Ells' total compensation in 2014 was $28.9 million; Mr. Moran's total compensation was $28.1 million. Both men's pay included $23.6 million each in options awards. The other two top executives — John R. “Jack” Hartung, chief financial officer, and Mark Crumpacker, chief creative and development officer — received total compensation of $10.2 million and $5.3 million, respectively.
OTPP plans to votes against a company proposal to amend the company's 2011 stock incentive plan, while CalSTRS, FSBA, ISS and Glass Lewis all support it.
On another issue, the $305.3 billion California Public Employees' Retirement System, Sacramento, and the $163.4 billion New York City Retirement Systems are urging shareowners to vote in favor of a non-binding proposal — co-filed by the five New York City pension funds, the $56 billion UAW Retiree Medical Benefits Trust, Ann Arbor, Mich., and the $5 billion Philadelphia Public Employees Retirement System — calling for proxy access, enabling shareowners access to corporate proxy material to nominate directors. A shareholder or group of shareholders holding at least 3% of the Chipotle stock would be able to nominate directors under the proposal.
CalSTRS, FSBA and OTPP plan to vote for the proposal, while ISS and Glass Lewis recommend clients support it.
However, they all opposed a separate, binding proxy access proposal filed by Chipotle, calling for a 5% ownership threshold. In addition, CalPERS and the New York City pension funds are calling on shareholders to oppose the Chipotle-sponsored access proposal.
Eric Sumberg, the New York City pension funds' spokesman, said the pension funds' corporate governance officials could not be reached to provide information on how the New York City funds plan to vote on the other proposals at Chipotle.
A CalPERS spokesman said the pension fund hasn't yet disclosed its voting on Chipotle proposals.
In addition, CalSTRS is withholding its votes on the re-election as directors of John S. Charlesworth and Patrick J. Flynn, while FSBA, OTPP, ISS and Glass Lewis support all directors up for election.
CalSTRS, FSBA, OTPP, ISS and Glass Lewis oppose a proposal calling for specific performance metrics in executive equity compensation plans.
Among other shareholder proposals, Glass Lewis recommends clients vote against a proposal requiring senior executives to retain a significant part of their Chipotle shares acquired through compensation plans until retirement or termination, a proposal restricting acceleration of equity awards in the event of a change of control, and a proposal requesting a sustainability report.
CalSTRS and OTPP also oppose the proposals on retention, while FSBA and ISS support it. OTPP opposes the proposal on accelerated vesting, while CalSTRS, FSBA and ISS support it. CalSTRS, FSBA OTPP and ISS support the proposal on sustainability reporting.
Chipotle opposes all the shareholder proposals.
Chipotle's annual meeting is Wednesday.