Good morning,
“I would encourage CFOs to look at the whole picture because if you’re competitive on the starting wage, you’ll get people in. If you’re not competitive on the opportunities going forward, you won’t keep them.”
That’s what Chipotle Mexican Grill Inc. CFO Jack Hartung told me in a conversation following the restaurant’s announcement Monday that it’s increasing the average restaurant wages to $15 an hour by the end of June. The starting wages of hourly workers will range from $11-$18 per hour.
“It’s only fair to increase the wages of folks that are already with us,” says Hartung, who has been CFO at Chipotle for 18 years. “We’re going to increase the wages across the board for salaried and our hourly managers, as well.”
Chipotle’s crew members can advance to the highest general manager position—Restaurateur—in about three and a half years, a position that pulls in average compensation of $100,000 per year, he says.
Hartung touched on the widespread labor shortages in the restaurant industry due to the coronavirus pandemic. “The jobs are there, [and] the desire to hire people is there,” Hartung explains. “But there’s a supply challenge right now.”
Chipotle plans to open 200 restaurants this year, and is looking to hire 20,000 employees, the company announced.
“We needed to step up the first step in our hiring process to make sure that we can attract the best and the brightest,” says Hartung. Chipotle is “constantly looking” at ways to develop talent, he says, citing its debt-free degree program as an example.
To see if the plan to increase wages was feasible, the modeling aspect was “relatively straightforward,” says Hartung. “You can boil it down into an insightful summary about what the impact on the business is going to be at the cost side,” and then decide what you can do on the revenue side to make sure you can offset or partially offset the costs, he says. “That is really key to allowing senior management to make the right decision,” he says.
As for what he’s excited about going forward?
“We had seen that digital was growing, and our customers were responding and wanting to move into digital channels at an increasing level,” says Hartung. “So, the investment follows.” One such venture includes the quesadilla, which can only be purchased on the Chipotle app. (For the record, Hartung says his own go-to order is the barbacoa burrito.)
As for how his own view of the business has changed over the years?
“Well, I’ve grown up a lot in 18 years,” says Hartung. “I’ve gotten a little grayer. I would say the biggest thing that I have learned over the years that has helped me is to think broader than just finance.”
He visits the sustainable farms where food for Chipotle is sourced. He visits the restaurants and connects with Chipotle team members. Such actions have influenced the way he operates as a CFO, Hartung says.
“CFOs are typically going to be good at the spreadsheet, at analysis, at issuing the right kind of reports,” he says. “But if you broaden your horizons and understand what’s really going on in the business, I think you have a chance at being a much better CFO over time.”
See you tomorrow.
Sheryl Estrada
sheryl.estrada@fortune.com
Big deal
Over the next 12 months, The Digital Dollar Project (DDP) will launch at least five pilot programs to measure the value of a U.S. central bank digital currency (CBDC), or "digital dollar." A non-profit partnership between Accenture and the Digital Dollar Foundation, the DDP was created in 2020 to encourage research and discussion of a U.S. CBDC — "a new form of money designed specifically for the digital world that complements the existing forms of physical and electronic monies," according to a May 3 announcement. Accenture is providing the first phase of funding for the pilots that will identify technical and functional requirements; assess benefits and challenges; and test applications and approaches.
Going deeper
Advanced technologies are still slow to be adopted by businesses, according to a new report released by Prophix Software, a corporate performance management software company. The report, completed in collaboration with FSN Research, found only 31% of finance leaders surveyed said they’ve made “significant changes to their planning, budgeting and forecasting processes (FP&A)” in regard to advanced technologies. And just 5% have completely transformed their FP&A processes. About 80% of finance teams surveyed said they’re unable to forecast beyond a year. More than 500 global finance executives in 23 different industries to assess their “agility” in FP&A and gauge the state of the industry.
Leaderboard
Mark McCaffrey was named CFO at GoDaddy, an internet domain registrar and web hosting company, effective June 2. McCaffrey most recently served as the head of PwC's US Technology, Media & Telecom Sector. He succeeds GoDaddy CFO Ray Winborne, who announced earlier this year his intent to retire, according to the company.
Adriel Lares, CFO at Fastly, Inc., a provider of an edge cloud platform, will step down after five years of service, the company announced May 5. Lares will continue in his role as CFO until a successor is appointed. Fastly has retained an executive firm to conduct an external search for its next CFO, according to the company.
Overheard
"This was a good time for me to come in and evolve and grow with the business. Compliance shouldn’t be an inhibitor on the business, but a partner that scales with it."
— Frederick Reynolds on being hired as the first chief compliance officer at Brex Inc., a fintech startup now valued at $7.4 billion, as told to Bloomberg Law.
