Chipotle Mexican Grill is searching for a new CEO following the resignation from the post of founder Steve Ells, who has served in that role since the brand’s inception.
The troubled fast casual said Ells will shift to the post of executive chairman once a successor has been found. He remains a significant shareholder.
Chipotle said that the change in leadership was Ells' decision.
Ells is serving on the three-director committee that was formed by the board to find a replacement. Also participating in that ad hoc group are Ali Namvar, a board representative of activist investor Pershing Square, and Robin Hickenlooper, a Colorado businesswoman and the wife of Gov. John Hickenlooper.
The move has been expected by Chipotle watchers for some time. Ells and his executive team drew fire for how they responded to a series of foodborne-illness outbreaks in late 2015 and early 2016. In the midst of the crises, Ells went on “Today” to apologize to the public for the incidents and pledged to make Chipotle the safest dining option in the business. Later that same day, a unit in Seattle was closed by health officials.
The chain continued to suffer one publicity crisis after another. Marketing officer Mark Crumpacker was arrested for buying cocaine from a drug-delivery service under investigation by authorities in New York City. He accepted a plea deal that allowed him to keep working and avoid jail.
In April, the company acknowledged that customer information had been stolen from its computer systems.
Two weeks ago, TV star Jeremy Jordan publicly asserted that he'd almost died after eating at a Chipotle, though the chain refuted the allegation.
Late last year, as Chipotle’s financial results showed the brand was still suffering from a lack of public trust, co-CEO Monty Moran parted with the company, leaving Ells as the sole holder of the office.
Ells, a Culinary Institute of America graduate, conceived the idea for Chipotle while cooking at Stars, Jeremiah Tower’s celebrated San Francisco restaurant. On breaks, he watched customers queue up at a local burrito joint, where they’d pay $5 for a meal that cost the place relatively little.
He decided to try his own burrito venture in Colorado, using financing from his family. The place became a hit, attracting the attention of McDonald’s, which at the time was searching for a new franchising vehicle. It bought control of Chipotle, but attempts to franchise the concept did not go well. Under pressure from shareholders to fix its core business, McDonald’s spun off Chipotle to shareholders, who enjoyed a near-vertical climb in the value of their holdings.
The brand had been a sales and profit standout until a series of E. coli outbreaks was traced to Chipotle units in the Pacific Northwest. Other incidences of food poisoning would subsequently be traced to the chain.
Afterward, Ells acknowledged that the crisis underscored more fundamental problems for the brand, particularly in service and operations.
Speculation he would step down was ratcheted up by the recent announcement that celebrity chef Richard Blais would assume leadership of Tasty Made, Chipotle’s new burger concept. Ells had been personally involved in the launch of the fast-casual venture.
Meanwhile, Chipotle revealed that its turnaround had slowed.