Why Chipotle’s general and administrative expenses increased



General and administrative expenses

Besides the four key costs mentioned in the previous parts in this series, Chipotle Mexican Grill’s (CMG) other costs include general and administrative (or G&A) costs.

Since the company owns all of its restaurants, these costs are spread over all of its units. As a percentage of sales, the G&A costs accounted for 6.6%. This was 0.2% higher compared to 3Q13. The biennial All Managers’ Conference was held in Las Vegas. This led to the increase.

 CMG General and administrative expenses 2014-10-25

Stock compensation 

The company reported a non-cash stock compensation of $83. The company stated that the stock compensation is expected to stay at $98 million. For the last quarter, the stock compensation will come in lower—compared to the first three quarters.

Stock compensation increased this year. The increase was mainly due to the increase in share prices. It was also due to the large number of senior management that qualified for retirement. The company expects G&A expenses to come in lower for the fourth quarter.

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Companies like Panera Bread (PNRA), Potbelly (PBPB), and restaurants found in the Consumer Discretionary Select Sector SPDR Fund (XLY)—like McDonald’s (MCD)—reward their senior management team with stock-based compensation. In some cases, the stock-based compensation could be more than their salary.

So far, we discussed CMG’s revenues, operating costs, and non-operating costs. In the next part of the series, we’ll discuss how CMG’s bottom line performed.


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