With its CEO search underway, Chipotle wants to make sure the rest of its executive team remains intact. The company, in a securities filing Friday, revealed that it entered into retention agreements with its chief financial officer and chief marketing officer. If chief financial officer Jack Hartung remains with the brand a year after a new CEO comes on board, he will earn an additional $1 million. Chief marketing officer Mark Crumpacker, under the same condition, will receive $600,000.
This is a common practice for transitioning companies. Chipotle founder Steve Ells announced in November he would step down from the CEO role and into a new chairman position with the company he brought to life in 1993. Ells is part of Chipotle’s search committed to find his replacement, which includes directors Robin Hickenlooper and Ali Namvar. The company said it is looking for a leader “with demonstrated turnaround expertise to help address the challenges facing the company, improve execution, build customer trust, and drive sales.”
There are some conditions. According to the filing: “If Chipotle terminates the employee recipient’s employment for “cause” (as defined in the agreement) following the vesting date but prior to payment of the retention bonus, the retention bonus will be automatically forfeited. If, prior to the vesting date, Chipotle terminates the employee recipient’s employment without cause (and other than due to the employee’s death or disability, as defined in the agreement) or the employee recipient terminates the employee’s employment with good reason, provided the employee timely executes a general release of claims in favor of Chipotle and such release becomes irrevocable, the retention bonus will fully vest as of the date on which the release becomes effective, and be paid to the employee recipient in a cash lump-sum at the same time as the bonus would have been paid if the employee had remained actively employed with the Chipotle through the payment date.”
Chipotle ended the week trading at $327.34 on the stock market. The brand has weathered a challenging year, and continues to battle back from its 2015 E. coli crisis. Chipotle’s third-quarter adjusted earnings per share came in at $1.33 and its same-store sales climbed just 1 percent.
