Things over at Chipotle haven’t been exactly great this past year, what with all that food-borne illness stuff, tanking stocks, and customers fleeing. And things might not be getting any better — or a least for the co-captain of the ship, Steve Ells, as some investors are now calling for the co-founder to step down from his position as chairman of that board.
Reuters reports that Chipotle investors Amalgamated Bank and CtW Investment group on Tuesday called to replace co-CEO Steve Ells with an independent director.
Despite the call to action, an actual change won’t occur until sometime next year, at the Chipotle 2017 annual board meeting.
“Chipotle’s closed-off and limited governance structure is unsustainable and counterproductive, posing a direct risk to shareholders and the public at large,” Amalgamated Bank CEO Keith Mestrich said in a statement to Reuters.
This isn’t the first time the investors have gone after Chipotle board members, Reuters reports. Back in April, CtW failed in urging investors to remove two longtime board members.
The renewed effort to revamp Chipotle’s board comes just weeks after activist investor Bill Ackman’s Pershing Square Capital Management took a 9.9% stake in the fast-casual restaurant.
That investment, valued at about $1.2 billion, made Pershing the second largest holder of Chipotle shares and signaled to some analysts that Chipotle would soon be on a path to reinvigoration following its recent slumping sales.
Chipotle has spent the better part of 2016 trying to dig its way out of a food-borne illness and safety hole and attempting to bring in customers by giving away free food — to kids, college students, and others — launching limited-time promotions, and a temporary loyalty program.
Those measures don’t seem to be helping the company rebound. A survey recently found that 25% of former customers have stopped going to the restaurant or have been stopping by less frequently.
Ells founded Chipotle in 1993 and has been Chairman of the Board since 2005. He’s shared the co-CEO title with Monty Moran since 2009.
by Ashlee Kieler via Consumerist