A Look At Chipotle Mexican Grill's (NYSE:CMG) CEO Remuneration

Brian Niccol became the CEO of Chipotle Mexican Grill, Inc. (NYSE:CMG) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Chipotle Mexican Grill pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Chipotle Mexican Grill

How Does Total Compensation For Brian Niccol Compare With Other Companies In The Industry?

Our data indicates that Chipotle Mexican Grill, Inc. has a market capitalization of US$37b, and total annual CEO compensation was reported as US$16m for the year to December 2019. That's a notable decrease of 52% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.

In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$11m. Hence, we can conclude that Brian Niccol is remunerated higher than the industry median. Furthermore, Brian Niccol directly owns US$12m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 25% of total compensation represents salary, while the remainder of 75% is other remuneration. Chipotle Mexican Grill pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Chipotle Mexican Grill, Inc.'s Growth Numbers

Chipotle Mexican Grill, Inc. has seen its earnings per share (EPS) increase by 18% a year over the past three years. It achieved revenue growth of 8.3% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Chipotle Mexican Grill, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Chipotle Mexican Grill, Inc. for providing a total return of 322% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

As previously discussed, Brian is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Brian deserves a raise!

Shareholders may want to check for free if Chipotle Mexican Grill insiders are buying or selling shares.

Important note: Chipotle Mexican Grill is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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