Chipotle draws shareholder activism

The comptroller of New York City has targeted Chipotle Mexican Grill as one of about 75 publicly owned companies whose bylaws he hopes to alter to facilitate proxy challenges.

Scott Stringer is asking shareholders of the fast-casual chain to amend the company’s rules so that any shareholder who has held 3 percent of Chipotle’s stock for at least three years can have its own slate of board nominees listed on proxy materials.

In SEC filings and statements to the media, Stringer said his goal is to foster more sensitivity among companies to environmental issues, diversity and excessive CEO compensation.  As New York’s comptroller, Stringer oversees the investment of some $160 billion in pension funds.

Chipotle has shown willingness to give shareholders access to the proxy in the manner Stringer is requesting, but wants the threshold raised. It would grant a listing to holders of at least a 5 percent stake in the company.

Chipotle co-CEOs Steve Ells and Monty Moran have drawn criticism from Chipotle shareholders for their compensation, which totaled about $67 million last year. About three-fourths of the company’s shareholders disapproved in a non-binding vote of last year’s original compensation packages for the two officers, leading to changes in policy and the pair’s pay.

So-called say-on-pay initiatives are also included in this year’s proxy materials for Chipotle’s annual meeting.

The meeting is scheduled for May 13.


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