After spending several months rolling out free burrito deals, marketing campaigns, and numerous new food safety measures, Chipotle ended 2016 by introducing a new company mission and ditching its longtime co-CEO setup as part of the long recovery from its food-borne illness crisis. Now, it looks like the chain is making another big change at the top.
Chipotle announced last Friday that four of the 12 directors on its board would not seek reelection at the company's upcoming shareholder meeting, according to a report by Reuters. The news comes just three months after Chipotle made a deal with activist investor Bill Ackman, whose firm owns a 10% stake in the company, to "refresh" the board with four new members. Some shareholders have previously criticized the board for being too cozy with management. A Chipotle spokesperson, however, said the latest move is not the result of pressure from Ackman or other investors, but rather "individual decisions," per the report.
The four board members -- John Charlesworth, Patrick Flynn, Darlene Friedman, and Stephen Gillett -- have decided to leave the board when their terms expire this May. Friedman, Charlesworth, and Flynn are some of Chipotle's longest-serving board members, having been around for nearly two decades or more, or long before the burrito chain became a public company, according to the report. Gillett has served on the board for about two years.
Besides the shakeups on the board, the last major change at the highest levels of Chipotle came last December when the company ditched its co-CEO structure and named its founder, Steve Ells, as sole CEO. Ells' first order of business as CEO was the introduction of a new company mission focusing on its commitment to serving fresh ingredients. Last quarter, the company saw its first increase in sales since the crisis, but Ells said half of its restaurants failed to provide good customer service.
Of course, big changes at the board-level are probably just a piece of Chipotle's strategy to rebound this year, but hopefully it has at least a few more changes to its menu coming, too. If so, we'd like to again suggest adding a menu hack of sorts called Nacho Bowls.
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