Chipotle Mexican Grill announced Nov. 29 that chairman and chief executive officer Steve Ells -- also the founder of the company in 1993 -- will become executive chairman following the completion of a search to identify a new CEO.
The company said its board has formed a search committee comprised of directors Robin Hickenlooper and Ali Namvar, as well as Ells, to identify a new leader with demonstrated turnaround expertise to help address the challenges facing the company, improve execution, build customer trust and drive sales.
Chipotle has been trying to recuperate from a significant nationwide foodborne illness outbreak that occurred in 2015 but continues to cause the company to struggle in the marketplace. Its 2016 annual report showed that net income fell from $475,602 in 2015 to $22,938 in 2016. Chipotle’s financial picture has improved somewhat in 2017. During the first three quarters, net income was $132,360, up from $6,963 during the same period in 2016 but still much lower than the net income of $407,728 posted in the first three quarters of 2015.
"Bringing in a new CEO is the right thing to do for all our stakeholders. It will allow me to focus on my strengths, which include bringing innovation to the way we source and prepare our food,” Ells said. “It will ultimately improve our ability to provide our guests with delicious food that is prepared with high-quality ingredients that are raised responsibly and served in a way that is accessible to everyone. I am confident that this will allow us to deliver value for our shareholders and provide rewarding opportunities for our employees.”
He continued, “Chipotle has vast unrealized potential. As we work hard to restore our brand, I believe we can capitalize on opportunities -- including in areas such as the digital experience, menu innovation, delivery, catering and domestic and international expansion -- to deliver significant growth."
While the company continues to make progress, Ells said “it is clear that we need to move faster to make improvements.”
"Simply put, we need to execute better to ensure our future success,” he added.
Ells said he and the board are committed to bringing in an experienced leader with a passion for “driving excellence across every aspect of our business, including the customer experience, operations, marketing, technology, food safety and training."
Chipotle lead independent director Neil Flanzraich said, "Steve is a visionary leader and one of the most successful restaurateurs in history, having grown Chipotle from a single restaurant in Colorado to more than 2,350 restaurants today. Steve made the decision -- and the board agreed -- that now is the right time to identify a new CEO who can reinvigorate the brand and help the company achieve its potential. We are committed to recruiting a world-class CEO for this incredible opportunity."