Sweetgreen plans to make its restaurant managers eligible for annual pay of more than $200,000 under a new compensation program, a wager by the salad chain that richer pay for its top store leaders will translate into stronger sales.

Beginning next year, managers at the fast-casual chain will be able to earn more than $200,000 a year if they meet certain milestones set by the company. The package, paid through a mix of base salary and equity, is intended to empower managers who contribute to the business's success and "[share] those wins with those that are driving it," co-founder and CEO Jonathan Neman said.

Under the incentive plan, Sweetgreen managers—known internally as "head coaches"—will see their base pay increase by up to 45% if they work at restaurants with higher sales volumes. The company declined to specify how high sales need to be to qualify.

When restaurants outperform their sales goals, managers will receive a revenue-share bonus drawn from the upside, with the percentage increasing based on their tenure at the company. Managers can also continue to receive equity in Sweetgreen based on their performance, a component whose value moves with the publicly traded company's share price.

Base salary increases will take effect in Q1 of 2027, while head coaches will begin receiving quarterly bonuses tied to store performance on Jan. 1, 2027, according to Sweetgreen.

The case for higher pay

The move comes as labor costs weigh on Sweetgreen's results. Labor and related expenses accounted for 29% of revenue in the quarter ending in June, up from 28% the year prior. Same-store sales and restaurant profits also declined that quarter compared with 2025. The company is scheduled to report Q3 earnings on Nov. 5. That report, due roughly two months before quarterly bonuses begin on Jan. 1, 2027, will provide the latest public reading on those pressures before the new pay structure takes effect.

Amid those pressures, Neman acknowledged that investing in additional compensation for managers "is definitely a bet."

"But the data supports that if we're able to attract, retain, and incentivize better head coaches, that they will drive higher sales and better margins," he said.

Neman noted that while Sweetgreen is putting some money upfront to raise managers' base salaries, most of the investment is contingent on stores meeting specific performance targets.

"Typically the company would take more of that upside. Now we're sharing in that upside with our team, but…we think that's a good trade," he said.

A growing playbook among fast-casual chains

Sweetgreen is not the first fast-casual chain to bet big on its managers. Chipotle announced in 2021 that workers in its highest general manager position could earn $100,000 on average as it sought to hold onto staff in a tight labor market. The move does not appear to have taken a financial toll on the burrito chain: its restaurant operating margins have stayed between 23% and 26% in recent years, and more than 85% of its general managers were promoted internally in 2025, according to its 2026 proxy statement.

Neman said Sweetgreen took inspiration from chains like In-N-Out Burger, which recently confirmed that store managers can earn more than $200,000 on average, and Raising Cane's, which grants managers monthly bonuses based on sales and said in 2024 that it paid managers up to $175,000 annually. Sweetgreen's $200,000-plus ceiling would exceed the benchmarks Chipotle and Raising Cane's have disclosed and would place the salad chain in the same range as In-N-Out's average.

Beyond business performance, Sweetgreen will evaluate the program using metrics such as team member turnover, "head coach stability"—that is, whether managers stay in their stores—quality and experience scores, and internal mobility, Neman said.

This report was originally published by HR Brew and was featured on Fortune.com.