Chipotle executive compensation will be based on meeting diversity and environmental targets

• Chipotle will compensate executives based on achieving diversity and environmental goals.
• The company plans to increase local produce to 37 million pounds by the end of 2021.
• Chipotle said it will promote more women and people of color to roles above restaurant-level.

Chipotle Mexican Grill will now compensate its executive officers based on achieving the company's diversity and environmental goals.

The chain restaurant said in an emailed statement to Insider that 10% of its executives' annual incentives will be based on meeting those targets. One of those goals is to increase local produce to 37 million pounds by the end of 2021 as Chipotle focuses on more farmer initiatives. Last year, the company sourced 31 million pounds of local produce.

Chipotle also said that it will publish its carbon footprint by the end of this year instead of 2025.

As part of meeting diversity goals, the restaurant chain said that it will promote more women and people of color to roles that are above the restaurant-level.

More chain restaurants and companies are setting wider diversity and inclusion goals to increase the number of women, workers of color, and underrepresented groups nationwide across its workforce.

Last month, McDonald's said it will also link its executive compensation to the company's diversification goals as it vowed to publicly reveal the demographic data of its workers for the first time, Reuters reported.

McDonald's CEO Chris Kempczinski could lose 15% of his around $2.25 million annual bonus if he fails to hit diversity targets, according to Reuters.

Starbucks will also track its annual inclusion and diversity goals as it plans to achieve BIPOC representation of at least 30% of its corporate roles and at least 40% of all retail and manufacturing roles by 2025.

In January, Apple said that its executives' 2021 bonuses will be based on meeting similar goals that will be measured by an "environmental, social, and governance modifier" that can affect up to 10% of payment. Verizon adopted this incentive program earlier on in 2014 when it began including specific details about linking compensation to diversity goals.

Last year, some companies such as Darden Restaurants and Wynn Resorts protected their executives' compensation during the pandemic by rewriting bonus plans and changing performance targets, according to Semler Brossy Consulting Group's investigation of 29 large US firms, reported by the Financial Times.