Steve Ells has had a hard year. As the founder, chairman, and CEO of Chipotle, he’s shouldered the bulk of the blame after the burrito chain's E. Coli and Norovirus outbreaks left some 60 customers sick across roughly a dozen states. Now, after spending months trying to get the cast-casual food chain back on its feet, Ells is reportedly being asked to step down from his post by at least two of the company’s shareholders.
According to Eater, shareholders Amalgamated Bank and CtW Investment Group have filed a proposal that would remove Ells as chairman of the board, claiming the company’s current leadership poses “a direct risk to shareholders and the public at large” in a statement. Despite the harsh words, Ells would maintain his role as co-CEO of the company, and a new “independent director” would be brought in to serve as chairman.
This kind of scrambling and in-fighting isn’t exactly new for Chipotle. Ever since the company’s food-safety issues began in 2015, Chipotle’s board has been looking for ways to rectify the situation and get back on track. The company has tried free food, heartfelt apologies, mobile ordering apps, and even more free food, but could a shakeup at the top really the final solution?
So far, those burrito giveaways have set Chipotle back a whopping $70 million, without leading to any kind of real revenue. According to Derrick Wortes, the lead analyst at CtW Investment Group, making some leadership changes is a necessary step toward right-sizing the ship.
“The company’s recent earnings confirm that Chipotle is missing key ingredients for a successful turnaround,” Wortes wrote in a statement to Eater. “An independent board chair is an essential part of curing the company’s governance and strategic failures that have become more apparent since last year’s foodborne illness crisis.”
Though much of the controversy surrounding Chipotle has been related to its food, the company’s higher-ups have occasions been drawn into the fray. In April, news broke that an investor was hoping to shake up Chipotle’s board in the hopes of adding more diversity in race and gender (companies still tend to be run by a lot of rich old white dudes…), and in July a top executive at the burrito chain was indicted in connection to a large cocaine bust in New York City.