Dive brief:
- Chipotle will You can link up to 15% off the executives’ annual incentive bonusWednesday’s announcement was made by the company to support the chain’s diversity goals and environmental goals for 2022. The restaurant tied 10% last year to such benchmarks.
- The company must buy at least 57 million lbs of organic, transitional, or locally grown ingredients. This is an increase of 2 million pound over last year. This benchmark is not applicable to beans or rice because of external crop factors. Chipotle also wants to reduce greenhouse gas emissions by at most 5% as part of its larger 2019 goal to reduce GHG emissions 50% by 2030.
- The company plans to increase diversity in internal promotions to salaried positions in restaurant support centers and management positions, including field directors and regional vice-presidents, to surpass its current 60% diversity rate.
Dive Insight
Incentives for executives to adopt more inclusive hiring strategies and eco-friendly sourcing strategies are a way to build on previous company investments.
Chipotle stated in a press release that the company had launched an accelerator program last year to help develop diverse employees. It also hired an independent third party for a pay equity analysis. However, the company did NOT share the results of the analysis. Chipotle also established a system to ensure equal pay across the company. In 2021 90% of the restaurant management positions were filled with internal promotions.
Chipotle supports the National Young Farmers Coalition. They are calling for policy changes in the 2023 Farm Bill that will allow future farmers equitable access to approximately 1 million acres of land.
Laurie Schalow (chief corporate affairs and food safety officers) stated that the company has over 3,000 restaurants with nearly 100,000 employees and a responsibility for transparency and driving positive change.
The burrito restaurant has been a leader in fast casual, and all restaurants, when it came to competitive employee wages and benefits. Chipotle increased its hourly wage to $15 last year, which was a move that CFO Jack Hartung stated was “as good as” or better than pre-pandemic retention. The company began offering $200 employee referral bonuses to crew members in 2021 and $750 for apprentices and general mangers in 2021. This could be a significant investment considering the size of Chipotle’s workforce.
The company’s pledges to offer better opportunities to diverse employees to climb up the corporate ladder and higher wages could help reduce labor issues in the past. Chipotle paid $8 million last fall to settle a 2012 lawsuit alleging that the company misclassified management trainees. A Muslim employee filed an EEOC complaint against Chipotle alleging that an assistant manager made her remove a religious headcover.
McDonald’s and Starbucks have both encouraged their executives to push for DEI and environmental goals. They tie these benchmarks to their leadership pay. McDonald’s introduced a 15% bonus for diversity and women in their executive incentive bonuses one year ago. Starbucks began linking pay for senior vice-presidents to goals in 2020. This will help them reach their target of having at least 30% Black, indigenous, or people of color at all corporate level and at least 40% in retail and manufacturing roles by 2025.
