NEW YORK (TheStreet) -- Chipotle (CMG) may be raising menu prices and forcing consumers to shell out more for their burrito bowls and guacamole-dolloped burritos, but the Denver-based chain's executive pay practices are getting scrutinized by investors.
At Chipotle's annual shareholder meeting on Thursday, investors gave the company what was referred to as a "wake up call" with regards to its executive compensation practices.
According to Michael Pryce-Jones, the senior policy analyst at CtW Investment Group, Chipotle's executive pay plan, a so-called say-on-pay proposal, received support from just 23% of shareholders, meaning that 77% of shareholders voted against the proposal -- the largest vote against CEO pay so far this year, the organization said.
"We were taken aback by the level of defeat," Pryce-Jones told TheStreet in an interview. "The board said this is a wake-up call for them." CtW Investment works with pension funds associated with Change to Win, a federation of unions representing more than 6 million workers in the U.S. The pension funds have more than $250 billion in assets under management and are "substantial" Chipotle shareholders.
Leading up to the vote, investors and corporate governance firms Institutional Shareholder Services (ISS) and Glass Lewis were urging shareholders to oppose the compensation for Chipotle's unusual co-chief executive structure in which co-founder, chairman and co-CEO, Steve Ells, received a package worth $25.1 million for 2013. Monty Moran, the successful burrito chain's other co-CEO, received a package worth $24.4 million for 2013. The proposal was Proposal B on the meeting's docket -- "An advisory vote to approve the compensation of our executive officers as disclosed in this proxy statement."