Laurie Schalow
CHIPOTLE MEXICAN GRILLAbout Laurie Schalow
Laurie Schalow is Chief Corporate Affairs and Food Safety Officer at Chipotle Mexican Grill (CMG). She joined Chipotle in August 2017 and is 57 years old; she holds a B.S. in Business Administration from Miami University and an MBA (Case Western Reserve and Wayne State University) . During her tenure, CMG delivered strong operating results in 2024 including revenue of $11.3B (+14.6% YoY), comparable sales +7.4%, average unit volumes ~$3.2M, and restaurant-level operating margin of 26.7% . Over the most recent three-year period, CMG cites a 20% total annualized shareholder return, framing pay-for-performance alignment across incentives that apply to executive officers, including food safety-linked modifiers in the annual plan .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Yum! Brands (KFC, Pizza Hut, Taco Bell) | Vice President of Public Affairs | — (prior to Aug 2017) | Oversaw Global CSR, PR, Crisis Management, Social Listening, and Community Diversity programs across ~44,000 restaurants in 140 countries . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| National Restaurant Association | Director | Current | Industry leadership and policy engagement . |
| Chipotle Cultivate Foundation | President | Current | Philanthropy and community impact aligned with brand purpose . |
Fixed Compensation
| Component | Detail |
|---|---|
| Base Salary | Not individually disclosed for Ms. Schalow in the 2025 Proxy (only “named executive officers” are itemized) . |
| Target Bonus % (AIP) | Not individually disclosed for Ms. Schalow; AIP design applies to executive officers (see Performance Compensation) . |
| Perquisites/Benefits | Executive officers receive standard benefits; plan architecture described for NEOs (e.g., deferred comp eligibility); individual detail for Ms. Schalow not itemized . |
Performance Compensation
Annual Incentive Plan (AIP) – applies to executive officers, including food safety governance overlays:
- Structure: 75% Company Performance Factor (CPF), 25% Individual Performance Factor (IPF); Brand Purpose modifier ±15% total across three pillars; Food Safety modifier can reduce payouts by up to -20% .
- 2024 CPF metrics and results:
| Metric | Weight | Target | Actual 2024 | CPF Earnout |
|---|---|---|---|---|
| Comparable Restaurant Sales (CRS) | 40% | 4.4–5.4% | 7.4% | Contributed to total CPF 176% |
| Restaurant Cash Flow (RCF) Margin % | 40% | 26.0–26.5% | 26.7% | Contributed to total CPF 176% |
| Site Assessment Requests (SARs) | 20% | 430 | 460 | Contributed to total CPF 176% |
| Total CPF | — | — | — | 176% |
Brand Purpose modifier outcomes (quantitative):
- Food & Animals: >47M lbs local produce purchased vs 41–43M target → +5% .
- People: Diverse turnover 3.2% lower than non-diverse → 0% .
- Environment: 14.6% reduction in Scope 1 & 2 emissions vs 10–15% target → 0% .
- Net Brand Purpose modifier: +5% .
- Payouts above 200% are delivered as immediately vested Deferred Stock Units (DSUs) with 50% deferred to year 2 and 50% to year 3, reinforcing alignment . Food safety modifier was not applied downward in 2024 given strong performance .
Long-Term Incentives (LTI) – program design for executive officers (award levels disclosed only for NEOs):
- Mix: 60% Performance Share Units (PSUs), 20% SOSARs (stock-only stock appreciation rights), 20% executive election of RSUs or SOSARs; typical SOSAR/RSU vesting 50% at year 2 and 50% at year 3 .
- 2024 PSU metrics: 3-year cumulative Base RCF Dollars (90% weight) and total New Restaurant Openings (NROs) (10% weight); payout range 0–300% with a TSR cap at 100% of target if three-year relative TSR <25th percentile of S&P 500 .
- PSU threshold/target/max schedule (selected points):
| Metric | Threshold | Target | Max | Weight |
|---|---|---|---|---|
| 3-Yr Base RCF Dollars ($mm) | 8,690 → 0% | 8,990–9,140 → 90% | 9,540 → 270% | 90% |
| Total NROs | 960 → 0% | 1,000–1,020 → 10% | 1,080 → 30% | 10% |
- Retention RSUs: In August 2024, one-time retention RSUs were granted to “continuing NEOs and select other key executives” with front-loaded vesting (60%/40% over two years; CFO promotion award vests over three years). The proxy discloses NEO grants; recipients beyond NEOs not itemized .
Equity Ownership & Alignment
| Topic | Company Policy / Ms. Schalow Status |
|---|---|
| Ownership Guidelines | Robust stock ownership guidelines apply to executive officers; assessment annually, five years to achieve; if off-track by year 3, sale restrictions and 50% post-vest retention apply. NEO guidelines disclosed: CEO 7x base salary, CFO 4x, other NEOs 3x; all NEOs in compliance as of 12/31/24. Ms. Schalow’s exact multiple is not itemized, but as an executive officer she is subject to the guidelines framework . |
| Hedging/Pledging | Prohibited for all executive officers and directors; no margin accounts, no pledging or hedging instruments allowed . |
| Clawback | Policy exceeds NYSE requirements; recoups incentive comp after restatements and permits forfeiture for egregious conduct substantially detrimental to the company . |
| Beneficial Ownership | Individual share count for Ms. Schalow not disclosed in the Beneficial Ownership table (NEOs and directors are itemized; “all directors and executive officers as a group” is shown) . |
| Insider Activity | One Form 4 delinquency: Ms. Schalow reported a charitable donation of 6,800 CMG shares on Nov 25, 2024; Form 4 filed Dec 12, 2024 after the oversight was discovered . |
Employment Terms
| Provision | Executive Officer Terms (apply to Ms. Schalow as an executive officer) |
|---|---|
| Severance Plan (non-CIC) | If terminated without cause or resign for good reason: cash severance = 1.5x (other execs) of base salary + target AIP (CEO is 2x); pro-rated AIP based on actual performance; company-paid medical premium equivalent for 18 months (24 months for CEO); pro-rata vesting of unvested equity (performance awards based on actual results); SOSARs exercisable up to 12 months post-termination or earlier expiry. Requires separation agreement with confidentiality, non-solicitation, and non-disparagement . |
| Change in Control (Double Trigger) | Upon both CIC and qualifying termination: lump sum = 2x base salary + target bonus; pro-rated bonus; two years medical premium equivalent; full vesting of unvested equity (PSUs at greater of target or actual performance through CIC). No tax gross-up; best-net cutback applies . |
| Equity Vesting Mechanics | Annual PSUs/SOSARs/RSUs include retirement, death/disability, and CIC treatments; typical SOSAR/RSU vesting 50% at 2 years/50% at 3 years; PSU payout range 0–300% subject to performance; CIC replacement/acceleration provisions described . |
Risk Indicators & Red Flags
- Hedging/pledging prohibited; strong stock ownership and clawback policies reduce alignment risk .
- 2024 Say-on-Pay support was >94%, indicating broad shareholder endorsement of compensation design .
- Administrative lapse: a late Form 4 for Ms. Schalow’s share donation (corrected promptly), not indicative of selling pressure .
- Compensation program risk assessment by FW Cook concluded no material adverse risk from comp design; numerous risk mitigants in place .
Compensation Structure Analysis
- High variable pay orientation with multi-metric AIP and long-dated LTI promotes pay-for-performance; the AIP includes a negative-only food safety modifier (-20% max), aligning Ms. Schalow’s remit with incentives .
- LTI leans on multi-year cash flow and development metrics (RCF Dollars, NROs) with a relative TSR cap, discouraging windfalls when shareholder returns lag .
- One-time 2024 retention grants targeted NEOs and select key executives to manage leadership transition risk; disclosure does not specify Ms. Schalow’s participation .
Investment Implications
- Alignment: Executive policies (no hedging/pledging, ownership guidelines, clawback) and AIP food safety modifier indicate strong alignment between Ms. Schalow’s functional accountability and shareholder interests, reducing governance risk .
- Retention/Pressure: AIP and standard LTI vesting schedules, plus severance/CIC protections (1.5x non-CIC; 2x CIC double-trigger) moderate retention risk. No evidence of pledging; recent insider activity was a charitable donation (not sales), implying limited near-term selling pressure signals from Ms. Schalow specifically .
- Execution: Company-level performance momentum (2024 CRS, RCF margin, SARs beats) supported a 176% CPF and +5% Brand Purpose modifier, reinforcing incentive credibility; sustained focus on food safety KPIs (negative-only modifier unused in 2024) underpins reputational risk management central to her role .
- Oversight: High Say-on-Pay support and independent comp consultant engagement indicate stable governance; minor Section 16(a) lapse appears administrative and remedied .
Key takeaway: Ms. Schalow operates within a robust, shareholder-aligned incentive and governance framework that ties annual outcomes to core operating and food safety performance, with balanced long-term equity metrics and prudent severance/CIC constructs—supportive of retention and alignment, with low observable insider selling pressure.
Citations:
- Executive bio and roles
- 2024 performance and strategy metrics
- AIP structure, metrics, outcomes, and modifiers
- LTI mix, PSU metrics/scale, and vesting terms
- Ownership guidelines, hedging/pledging prohibition, clawback
- Severance and CIC terms
- Say-on-Pay and shareholder engagement
- Compensation risk assessment and consultant
- Insider Form 4 (charitable donation)