CHIPOTLE MEXICAN GRILL INCCMG
CHIPOTLE MEXICAN GRILL INC Stock Compensation Disclosure
Stock-Based Compensation and Employee Benefit Plans
Pursuant to the 2022 Stock Incentive Plan, we grant stock options, SOSARs, RSUs, or PSUs to employees and non-employee directors. We issue shares of common stock upon the exercise of stock options and SOSARs and the vesting of RSUs and PSUs.
We also have an employee stock purchase plan (“ESPP”), 401(k) Defined Contribution Plan, and a Deferred Compensation Plan.
Stock-Based Compensation
Under the 2022 Stock Incentive Plan, 121,571 shares of common stock have been authorized and reserved for issuance to eligible participants, of which 102,111 shares were authorized for issuance but not issued or subject to outstanding awards as of December 31, 2025. For purposes of calculating the available shares remaining, each share issuable pursuant to outstanding full value awards, such as RSUs and PSUs, count as two shares, and each share underlying a stock option or SOSAR count as one share.
On August 31, 2024, our former CEO terminated employment with the company and forfeited all of his unvested equity awards, resulting in a reversal of expense of $27,863. In response to the departure of our former CEO, we granted retention RSUs to key executives. These awards have various vesting terms, and vest over , or three years from the grant date. During the year ended December 31, 2025 and 2024, expense recognized for the retention RSUs was $34,759 and $17,080, respectively. The impact of these employee retention awards are reflected in the tables below.
Total stock-based compensation expense was as follows:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Stock-based compensation | $ | 121,372 | $ | 134,635 | $ | 126,686 | |||||||||||
| Stock-based compensation, net of income taxes | $ | 100,091 | $ | 109,996 | $ | 107,210 | |||||||||||
| Total capitalized stock-based compensation included in leasehold improvements, property and equipment, net on the consolidated balance sheets | $ | 1,829 | $ | 2,905 | $ | 2,670 | |||||||||||
| Excess tax benefit on stock-based compensation recognized in provision for income taxes on the consolidated statements of income and comprehensive income | $ | 12,947 | $ | 23,419 | $ | 25,437 | |||||||||||
SOSARs
A summary of SOSAR award activity was as follows (in thousands, except per share data):
| Shares | Weighted-Average Exercise Price per Share | Weighted-Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| Outstanding, January 1, 2025 | 10,414 | $ | 32.53 | 4.2 | $ | 289,373 | |||||||||||||||||
| Granted | 2,378 | 55.53 | |||||||||||||||||||||
| Exercised | (1,807) | 22.77 | |||||||||||||||||||||
| Forfeited | (387) | 47.86 | |||||||||||||||||||||
| Outstanding, December 31, 2025 | 10,598 | 38.80 | 4.0 | 53,211 | |||||||||||||||||||
| Exercisable, December 31, 2025 | 5,270 | 28.05 | 2.6 | 47,664 | |||||||||||||||||||
| Vested and expected to vest, December 31, 2025 | 10,336 | 38.42 | 3.9 | 53,136 | |||||||||||||||||||
The total intrinsic value of SOSARs exercised during the years ended December 31, 2025, 2024 and 2023, was $44,568, $177,274, and $142,830, respectively. Unrecognized stock-based compensation expense for SOSARs as of December 31, 2025 was $28,091 and is expected to be recognized over a weighted-average period of 1.5 years. SOSARs expire 7 years after the day they were granted.
The weighted-average assumptions utilized in the Black-Scholes option-pricing model to estimate the fair value of SOSARs granted each year were as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Risk-free interest rate | 4.2% | 4.2% | 4.1% | ||||||||||||||
| Expected life (years) | 3.6 | 3.6 | 3.6 | ||||||||||||||
| Expected dividend yield | 0.0% | 0.0% | 0.0% | ||||||||||||||
| Volatility | 35.2% | 35.7% | 36.4% | ||||||||||||||
| Weighted-average Black-Scholes fair value per share at date of grant | $ | 17.55 | $ | 16.98 | $ | 10.60 | |||||||||||
The risk-free interest rate is based on U.S. Treasury rates for instruments with similar terms, and the expected life assumption is based on our historical data. We have not paid dividends to date and do not plan to pay dividends in the near future. The volatility assumption is based on our historical data and implied volatility.
Non-Vested Stock Awards (RSUs)
A summary of RSU award activity was as follows (in thousands, except per share data):
| Shares | Weighted-Average Grant Date Fair Value per Share | ||||||||||
| Outstanding, January 1, 2025 | 4,347 | $ | 44.54 | ||||||||
| Granted | 1,522 | 52.69 | |||||||||
| Vested | (1,902) | 40.39 | |||||||||
| Forfeited | (324) | 49.76 | |||||||||
| Outstanding, December 31, 2025 | 3,643 | 49.64 | |||||||||
| Vested and expected to vest, December 31, 2025 | 3,346 | 49.44 | |||||||||
The weighted-average grant date fair value per RSU granted during the years ended December 31, 2024 and 2023, was $53.67 and $33.32, respectively. Unrecognized stock-based compensation expense for non-vested RSU stock awards we have determined are probable of vesting was $61,592 as of December 31, 2025, and is expected to be recognized over a weighted-average period of 1.4 years. The fair value of shares earned as of the vesting date during the years ended December 31, 2025, 2024 and 2023, was $97,766, $49,672, and $39,464, respectively.
Non-Vested Performance Stock Awards (PSUs)
A summary of PSU award activity was as follows (in thousands, except per share data):
| Shares | Weighted-Average Grant Date Fair Value per Share | ||||||||||
| Outstanding, January 1, 2025 | 2,045 | $ | 38.32 | ||||||||
| Granted | 759 | 57.27 | |||||||||
| Vested | (411) | 31.56 | |||||||||
| Forfeited | (305) | 35.94 | |||||||||
| Outstanding, December 31, 2025 | 2,088 | 46.89 | |||||||||
| Vested and expected to vest, December 31, 2025* | 2,190 | 33.53 | |||||||||
*The vested and expected to vest total above represents outstanding base PSUs, adjusted for expected payout amounts in line with current and future estimated performance levels.
The weighted-average fair value per PSU granted during the years ended December 31, 2024 and 2023, was $52.90 and $32.14, respectively. The unrecognized stock-based compensation expense for non-vested PSU stock awards we have determined are probable of vesting was $5,171 as of December 31, 2025, and is expected to be recognized over a weighted-average period of 1.1 years. The fair value of shares earned as of the vesting date during the years ended December 31, 2025, 2024 and 2023, was $23,485, $113,181, and $110,794, respectively.
During the years ended December 31, 2025, 2024 and 2023, we awarded performance stock unit awards that are subject to service, market, and performance vesting conditions. The quantity of shares that vest will range from 0% to 300% of the targeted number of shares based on performance factors related to restaurant cash flow dollars earned over three-year periods beginning on January 1, 2025, 2024 and 2023, and gross new restaurant openings over the same three-year periods. If the defined minimum targets are not met, then no shares will vest. Further, in no event may more than 100% of the target number of PSUs vest if our 3-year total shareholder return is below the 25th percentile of the constituent companies comprising the S&P 500 on the days of the grants.
Employee Stock Purchase Plan
We also offer an ESPP. Employees become eligible to participate in the program after one year of service with Chipotle and may contribute up to 15% of their earnings, subject to an annual maximum dollar amount. The ESPP provides a quarterly offering period to purchase our common stock at a price of 92.5% of the lower of the fair market value on the first and last trading days of each offering period. A total of 12,500 shares were authorized for issuance within the ESPP, of which 12,209 were available for issuance as of December 31, 2025. For the years ended December 31, 2025, 2024 and 2023, the number of shares issued under the ESPP were 134, 78, and 79, respectively.
Employee Benefit Plans
401(k) Defined Contribution Plan
We maintain the Chipotle Mexican Grill 401(k) Plan (“401(k) Plan”) for eligible U.S.-based employees. The 401(k) Plan allows participants to make cash contributions from payroll deductions. Employees become eligible to receive matching contributions after one year, and at least 1,000 hours, of service with Chipotle. We match 100% of the first 3% of pay contributed by each eligible employee and 50% on the next 2% of pay contributed each pay period (with an annual true-up) through cash contributions. For the years ended December 31, 2025, 2024 and 2023, matching contributions totaled approximately $20,009, $16,523, and $13,821, respectively, and are included in general and administrative expenses and labor dependent on employee classification on the consolidated statements of income and comprehensive income. Certain subsidiaries outside the U.S. also offer other similar benefits and are immaterial to the consolidated statements of income and comprehensive income.
Deferred Compensation Plan
We also maintain the Chipotle Mexican Grill, Inc. Supplemental Deferred Investment Plan (the “Deferred Plan”) for eligible employees. The Deferred Plan is a non-qualified plan that allows participants to make tax-deferred contributions that cannot be made under the 401(k) Plan because of Internal Revenue Service limitations. Participants’ earnings on contributions made to the Deferred Plan fluctuate with the actual earnings and losses of a variety of available investment choices selected by the participant. Total obligations under the Deferred Plan as of December 31, 2025 and 2024 were $46,468 and $36,509, respectively, and are included in other liabilities on the consolidated balance sheets and were fully funded as of December 31, 2025. We match 100% of the first 3% of pay contributed by each eligible employee and 50% on the next 2% of pay contributed once the 401(k) contribution limits are reached.
The following table summarizes estimated current and long-term material cash requirements for our deferred compensation plan as of December 31, 2025:
| Payments Due by Fiscal Year | |||||||||||||||||||||||||||||
| Total | 2026 | 2027-2028 | 2029-2030 | Thereafter | |||||||||||||||||||||||||
Deferred compensation(1) | $ | 46,468 | $ | 9,128 | $ | 11,154 | $ | 10,253 | $ | 15,933 | |||||||||||||||||||
(1)Includes scheduled payments from our deferred compensation plan where payment dates are determinable for employed participants in accordance with the account’s election, and the assumption that active participants will retire at the age of 65 and begin distributions from their accounts at that time. This does not include future contributions, investment earnings, or future participants. Timing and amounts of payments may vary significantly.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 4, 2026 | Showing above |
| 2024 | Feb 5, 2025 | |
| 2021 | Feb 11, 2022 | |
| 2020 | Feb 10, 2021 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.