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Dividends Chipotle executives will be linked to the growth of digital sales


In an unprecedented speech change, defending the interests of investors and executives should take precedence over the fate of the macrocorporaciones is compromised. Chipotle It has decided that the financial compensation for the highest offices of the corporate structure will be closely linked to innovation goals imposed from lower spheres.

A) Yes, for years, the bonuses of executives will be linked to performance this company, not only in economic terms, but also with regard to technological targets agreed.

It is therefore a incentive plan with the Mexican food brand intended not remain lagging behind other competitors in the fast food segment. In this group of companies, competitors Domino’s Pizza O McDonald’s invest heavily in order to accelerate the digital transformation of its restaurants.

Unlike Domino's Pizza, Digitization leading into the catering sector, Chipotle is experiencing difficulties enhance your online sales. With this curious measure, the Mexican food giant aims to catch up.

According to the press release, the Compensation Committee "believes that the strategic importance of winning volume of digital business in the next three years justifies a single prize to encourage further management that allows digital reach company goals'.

The agreement was signed on Form 10-Q filed earlier this year by the company. There are detailed targets, needs and prizes with great detail.

First Windfalls from high charges will be paid in shares of the company. The number of shares received will depend on three metrics that the company has selected after a thorough study of the market and the role it plays in the corporation.

These three aspects are:

  • Digital sales growth. When quantify the success of the measures adopted, is an obvious and very informative value. This value must grow in absolute terms, but not sufficient in itself. To ensure that Chipotle is running its digital processing as it matches, it is also necessary that the value of these orders increase in percentages with respect to sales through traditional media (Local phone or).
  • Administrative expenses against revenue. It's not enough to inject money without rhyme or reason in the game innovation technological and marketing, You can not boost orders online at any cost. To ensure that all progress is made within a logical parameters, This metric measures the effectiveness of the measures and management efficiency.
  • Completion percentage goals. To ensure that the development pipeline fits dictated by the committee, this metric increases their value when certain goals are achieved report.

Between the first quarter of 2017 and analog 2019, digital sales Chipotle They have grown considerably. Earlier 2017 turnover was perceived through orders online supposed 84 millions of dollars. During the signing of the report and digital transformation plan in April this year, this type of business had reached 205 millions of dollars.

A substantial change, despite what one might think at first, It is heavily concentrated toward today. Chipotle implemented in very late technological measures that extol online sales. Thus, solo between the last two quarters considered in the report is a percentage difference 28.93%.

Apart from the bad past decisions, This value demonstrates and confirms the growth capacity of the company on this front. Currently the average business volume associated with requests online is a 15.7% of the total, far from 50% Domino's Pizza franchises and other, but above McDonald's hamburgers and competing chains.

It is hoped that positive changes in the growth of digital sales of Chipotle conduct additional benefits to executives.

Not so easy to get the high command actions by management. Administrative expenses in the company could be labeled as waste lately. These They have increased 33% compared to previous years, which means that the amount allocated to these tasks based on the total percentage has increased. A) Yes, this value has exceeded 7% positioned next to the next percentage point; specific, a 7.8%.

This value indicates that the growth of digital sales is not without difficulties, and that the current course of action is not sustainable, so changes are required to make the digital transformation process more effective restaurant.

Juggling these two numbers prove complicated, but the circumstances will be even tougher because regardless of these values, the company aims to achieve two specific technological goals before the end of the year 2020.

Concrete measures were not disclosed but are related to market testing previously conducted by Chipotle. In this testing tests were done with menu changes, digitization thereof, adding rails drive-thru establishments and many other novelties, in order to identify what changes would stimulate greater benefits.

The concept of linking the benefits of executives with the performance of the company has already had consequences. The shares have doubled in price in recent months, It has since permeated means that if the technological goals are achieved revenue raised executives may even quadrupling, meaning that the value of shares would increase inordinately.

This change in the operation of the company not only augurs a promising future, also it shows a firm commitment to the defining characteristics of the market for future restoration: catering, home delivery of food and orders online will be the mainstays of the same.

Chipotle has understood what the mistakes made in the past and now check all the meat on the grill. All indications are that the coming years the company will be revolutionary.

About the Author

Article by the editorial team of DiegoCoquillat.com. It has professionals both in the field of hospitality, gastronomy and tourism, and new technologies and innovation.


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