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Sweetgreen bets $200,000 manager pay will boost sales

The salad chain is raising manager compensation with base pay hikes and performance bonuses, betting that better-paid leaders will drive higher sales and margins.

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Sweetgreen bets $200,000 manager pay will boost sales

The salad chain is raising manager compensation with base pay hikes and performance bonuses, betting that better-paid leaders will drive higher sales and margins.

In brief

The salad chain is raising manager compensation with base pay hikes and performance bonuses, betting that better-paid leaders will drive higher sales and margins. Sweetgreen will pay managers up to two hundred thousand dollars annually starting in twenty twenty-seven through base salary and equity, betting higher…

Sweetgreen raises manager pay to $200,000

Starting next year, Sweetgreen managers will earn more than two hundred thousand dollars annually through base salary and equity if they meet company milestones.

“share those wins with those that are driving it”

How the new pay structure works

Managers at high-volume restaurants get base pay increases up to forty-five percent.They also receive revenue share bonuses when stores outperform sales goals, with percentages rising based on tenure.

Why Sweetgreen is making this bet

Why Sweetgreen is making this bet

Higher labor costs cut into Sweetgreen's earnings, accounting for twenty-nine percent of revenue in the quarter ending June, up from twenty-eight percent the year prior.Same-store sales and restaurant profits also declined.

“if we're able to attract, retain, and incentivize better head coaches, that they will drive higher sales and better margins”

Other chains already pay managers well

Chipotle announced in twenty twenty-one that general managers could earn one hundred thousand dollars on average.In-N-Out Burger confirmed store managers earn more than two hundred thousand dollars on average.

Sweetgreen will measure program success

Beyond store performance, Sweetgreen will track team member turnover, head coach stability, quality and experience scores, and internal mobility to determine whether the incentive program works.

“Typically the company would take more of that upside. Now we're sharing in that upside with our team”

At a glance

Sweetgreen will pay managers up to two hundred thousand dollars annually starting in twenty twenty-seven through base salary and equity, betting higher compensation will improve sales and retention.

Read the original on Fortune

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