Lobbying Expenditures Disclosure

Resolution Text

Whereas, we believe in full disclosure of lobbying activities and expenditures of Chipotle Mexican Grill, Inc. (“Chipotle”) to assess whether Chipotle’s lobbying is consistent with its expressed goals and stockholder interests.

Resolved, Chipotle stockholders request the preparation of a report, updated annually, disclosing:

Chipotle’s policy and procedures governing its own lobbying, both direct and indirect, and grassroots lobbying communications.
Payments by Chipotle used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.
Description of management’s decision-making process and the Board’s oversight of this process.

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Chipotle is a member.

Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.

The report shall be presented to the Nominating and Corporate Governance Committee and posted on the Chipotle website.

Supporting Statement

Chipotle does not currently report on the full extent of its lobbying efforts. We do know that Chipotle spent $530,000 from January 1 – September 30, 2022 on federal lobbying. The company also spent $209,000 to oppose AB 257 in 2022, a California law that creates a council to set minimum standards on working conditions, a law that industry groups now seek to overturn. Beyond that, there is not a complete picture of the company’s lobbying activities:

State level lobbying disclosures are uneven, incomplete or absent.
Chipotle does not disclose donations to third party groups that spend millions on lobbying and often undisclosed grassroots activity; these groups may be spending “at least double what’s publicly reported.”

Further, while Chipotle discloses a list of trade association memberships, it does not disclose indirect lobbying expenditures made through groups like the National Restaurant Association and Business Roundtable. In 2022, the National Restaurant Association, spent $2,110,000 on federal lobbying, and Business Roundtable spent $15,110,000.

We are concerned that lack of disclosure could present reputational risk that could harm shareholder value from lobbying that is not aligned with the Company’s public positions. Chipotle claims to be “a people-first company” whose purpose is “Cultivating a Better World.” Complete reporting would shed light on how that commitment operates in practice.