Chipotle Execs Hit with Huge Pay Cuts After E. Coli, Norovirus Outbreaks
While Chipotle continues to struggle in the aftermath of its disastrous E. coli outbreaks and other food-borne illness scares, it looks like the burrito company's top two executives are finally paying the price for its food safety failures -- nearly half of their total compensation packages, that is.
Specifically, Chipotle canceled its 2015 cash bonuses for co-CEOs, Steve Ells and Monty Moran, due to the slew of highly publicized food safety issues that scared away customers and sent Chipotle's stock into a downward spiral, according to a report by the Chicago Tribune. In 2014, both executives received $3 million or more in bonuses and more than $23 million in stock options as part of their compensation packages, but they received neither the bonuses nor the stock in 2015. In fact, as CNN Money reports, Chipotle cut their total compensation by roughly half: Ells brought in $13.8 million (down from $28.9 million in 2014) and Moran brought in $13.6 million (down from 28.1 million). Well, damn.
“We believe (the new structure) aligns executive officer compensation with restoring shareholder value, and motivates the management team to further enhance value to our owners,” the company's compensation committee said in a filing with federal trade regulators. In other words, the co-CEOs can expect more cuts if they don't turn things around this year.
Just last Tuesday, Chipotle was forced to close its Billerica, MA, restaurant due to a Noroviurs scare, although it appears extensive new food safety measures prevented any customers from becoming sick. Despite that fact, the incident knocked several dollars off Chipotle's stock price last week, and pushed it even further away from its all-time high of $758 a share last August, or before the widespread food-borne illness outbreaks, according to the reports. Additionally, the moves come after Chipotle reported huge declines in earnings during the last quarter of 2015.
It remains to be seen how Chipotle rebounds from the outbreaks, but it'll probably take a lot more than just free burritos.
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