Chipotle promotes most of its managers from within. Image source: Chipotle.
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Like most companies, Chipotle (NYSE: CMG) has a complicated compensation picture.
The company pays what many would consider below-average starting wages (though it's on par or even above other quick-serve or fast-casual chains), but it also offers extensive benefits and prides itself on promoting from within. As is the case for other companies that hire entry-level, limited-skill workers, hourly compensations get all the headlines, but it's not the full story.
Chipotle ignored two email requests for specific wage info, but Communications Director Chris Arnold did respond by directing attention to the company's careers web page. He also provided the following statement:
Beyond wages, we offer a number of benefits for hourly employees, benefits that often exceed others in the industry, including paid vacation, paid sick days, twice-yearly merit increases, bonuses, tuition reimbursement, and a discounted higher education programs for employees. All of these benefits are available to hourly employees. We also offer extraordinary opportunity, with more than 95% of our managers coming from within the ranks of our crews.
That's a bit of a dodge, but it can be interpreted as Arnold and the company directing us to look at the entire picture, not just what its lowest-level workers make or only the hourly wage number. It's also worth noting that at the time of The Motley Fool's email request to Chipotle public relations, the company was also in the middle of being sued by nearly 10,000 workers over unpaid wages, according to CNN Money.
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It's very possible that the lawsuit, which involves workers claiming they are being forced to work extra hours without being compensated, has caused the company to be very cautious when it comes to making any statement on wages. Chipotle has denied any wrongdoing in the case.
What does Chipotle pay its workers?
Chipotle has a graphic on its careers web page, which shows the progression workers can follow along with possible salaries. On the last screen of that illustration, which shows that a theoretical "restaurateur" leading two to four Chipotles could make $133,000 a year, it also finally offers the disclaimed text associated with an asterisk next to the salary numbers on every page shown.
The companywide averages are for illustrative purposes only; actual individual compensation will vary based on performance and other factors.
Understanding that the company shows $28,000 for "crew," which requires no experience, $33,000 for "kitchen manager," and $36,000 for "service manager." The numbers climb higher as workers move up into management with the graphic showing "apprentices," sort of the precursor to being a top boss, taking in $53,000 while general managers earn $67,000 and "restaurateurs" can make around double that.
At the bottom level for "crew," that works out to $13.46 an hour -- a good number for the industry. The company does not spell out how that number is broken down, but based on other widely reported hourly compensation-only numbers, it does appear that figure counts non-hourly wage benefits.
Glassdoor, which tracks wages based on employee reports, has about 1,000 Chipotle workers identifying themselves as "crew" or "cashier" reporting salaries in the range of $9.14 to $9.44 an hour. Indeed.com also has salary information submitted by workers, and while it has a broader range of numbers and job titles under what could be considered "crew" than Glassdoor, its ranges are similar or even a bit lower.
Both Indeed.com and Glassdoor, it should be noted, show much higher rates for manager and supervisor titles.
What does this mean?
While Chipotle's starting wages fall well below the $15-an-hour threshold activists have been pushing for, the company does make a path to eventually attaining that wage. It's hard to weigh the value of benefits versus straight salary, because at the lower end of the wage scale, people struggling to eat or pay rent may not be overly worried about 401(k) matches.
That said, Chipotle pays within industry norms for entry-level workers while offering them training and a path to advancement. That should give the company a loyal, well-trained workforce, which may give it an advantage over rivals that do not make the same efforts to promote from within.
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Daniel Kline has no position in any stocks mentioned. He wants to try the chorizo, but it has not come to West Palm Beach. The Motley Fool owns shares of and recommends Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.