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Company drops co-CEO model


The food safety crisis that took the wind out of the sails of formerly high-flying Chipotle Mexican Grill has finally taken a toll on the chain’s executive suite.

The chain announced that Monty Moran has stepped down as co-CEO and from his board seat, effective immediately. Chipotle founder Steve Ells, currently co-CEO, will be the sole chief executive. He will also remain chairman.

“This approach has proven to be a very successful formula, but as the company grew, operations became more complicated and less consistent,” said Neil Flanzraich, lead director of Chipotle’s board. “Given the ongoing challenges facing the company, the board felt strongly that it was best for Steve to resume leadership of the company going forward.”

Chipotle is also planning to overhaul its board, where the median tenure is 17 years and four of the seven outside directors were appointed when the company was still private, the New York Times reported. The board has also been criticized for its lack of diversity.

Chipotle has struggled with sluggish traffic since a norovirus outbreak last year. Same-store sales dropped 21.9% in its most recent quarter. And last week, the company said that roughly half of its stores had failed to deliver the customer experience it expects, a part of the business that was overseen by Moran.

Ells has indicated that he will pursue employee incentives that are more closely tied to the guest experience. Chipotle now pays its starting employees above the federal minimum wage and provides benefits including paid vacation time, paid sick leave, and tuition reimbursement to all employees.

The company also provides stock to its general managers upon achieving “restaurateur” status. The restaurateur program, which recognizes the company’s elite restaurant managers and provides a pipeline for its future leaders, is a cornerstone of Chipotle’s field operations.

In recent years, however, achieving the status has become increasingly complex and Ells plans to re-work the program by placing an emphasis on the guest experience and making the path to restaurateur more intuitive and accessible to more general managers.

“It’s incredibly important to me that we create an excellent dining experience in all of our restaurants. That starts with having great restaurant teams. To that end, I will evolve our Restaurateur program to ensure that even more of our best employees succeed and thrive at the company,” Ells said. “While our plans will take some time to implement, we will act with a sense of urgency toward all of the changes we are pursuing.”

Ells also recommitted to the company’s quest to serve better ingredients, announcing a reimagined company mission. The new company mission to “Ensure that better food, prepared from whole, unprocessed ingredients is accessible to everyone” is the next step in the evolution of Chipotle’s mission-driven business. Chipotle’s previous mission was to “Change the way people think about and eat fast food.”

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