Chipotle Mexican Grill said that executive compensation will now be linked to hitting targets tied to the company’s environmental and diversity goals.
The burrito chain is following in the footsteps of Starbucks and McDonald’s, both of which recently announced that performance for racial and gender diversity goals will impact executive compensation plans. Individual investors and large asset managers like BlackRock are increasingly picking stocks with strong environmental, social and corporate governance in mind, pushing companies to make changes to become a more attractive investment.
“I think the increased focus on performance around ESG and investor feedback was definitely behind our decision to go public with this,” said Laurie Schalow, who oversees sustainability and ESG reporting for Chipotle in her role as corporate affairs chief and food safety officer.
Starting this year, 10% of Chipotle executives’ annual incentives will be tied to their progress toward achieving company goals.