The retention bonuses are intended to keep Chipotle’s top executives at the company for at least a few more years. |Photo: Shutterstock
As Chipotle’s CEO takes a new job at Starbucks, the fast-casual chain is paying large retention bonuses to keep top executives at the helm.
The company announced Wednesday that CFO Jack Hartung, who had planned to retire, will remain at Chipotle “indefinitely” and will assume a new role as president and chief strategy officer on Oct. 1.
This also accelerates the transition of Adam Rymer to the post of CFO, along with Jamie McConnell, who has been appointed Chief Accounting and Administrative Officer. Both will also take up their new roles on October 1.
This is a dramatic change from what was announced in July, when Hartung announced plans to retire next year and scheduled his actual exit for March 2025. Rymer was set to officially become CFO on Jan. 1, and the two planned to work together in the first quarter to ensure a smooth transition.
However, this plan was announced before Chipotle CEO Brian Niccol took a new job at the helm of Starbucks.
Scott Boatwright, Chipotle’s Chief Operating Officer since 2017, was named interim CEO and the company said it was seeking a successor in the interests of good corporate governance.
Meanwhile, both Hartung and Boatwright – as well as other executives – are given good reasons to stay.
On August 22, the board approved retention bonuses and adjusted the compensation of several top executives, according to a filing with the U.S. Securities and Exchange Commission (SEC).
Boatwright and Hartung each received retention bonuses of $8 million.
Curt Garner, Chipotle’s chief customer and technology officer, and Chris Brandt, chief brand officer, each received retention grants of $7 million.
The awards will vest 60% on the first anniversary of the grant date and 40% on the second anniversary and are contingent on continuation of service and other conditions. However, if an outside CEO is appointed and their employment is terminated without cause or terminated for good cause, the awards will vest fully at that time, the filing said.
Boatwright’s bonus will be prorated if he voluntarily resigns. His base salary as interim CEO is $1 million, with an annual cash compensation target of 115 percent of that base salary. He will also be allowed to use the company’s aircraft and purchase $3.5 million worth of stock.
Hartung, meanwhile, must stay for at least another year to be entitled to his full retention bonus, but he can still receive it in full if he retires after the one-year anniversary, the company said.
Rymer will receive a retention bonus of $3 million over three years and McConnell will receive $1.5 million.
Rymer’s base salary is $650,000 with an annual cash incentive target of 90% of base salary and $750,000 in stock through the next annual stock grant in early 2025, plus other benefits.
McConnell’s base salary will be $450,000.
Chipotle pointed to the long-standing experience of its management team. Hartung was CFO for 25 years and joined the chain when it had just 200 stores (it now has over 3,500). Rymer joined the company 15 years ago.
Garner joined Chipotle in 2015. Boatwright joined in 2017 and Brandt in 2018.
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