The burrito chain, Chipotle Mexican Grill, Inc. (NYSE:CMG) announced its founder and co-Chief Executive Steve Ells would take back the role of sole CEO, a position he held in the past from 1993 until 2009, following step down of Monty Moran after a run of food safety lapses that hit both its sales and repute.
DENVER, CO-based Chipotle Mexican Grill, (NYSE:CMG) stock surged in early trade, as it long struggled to recuperate from outbreaks of E. coli, salmonella and norovirus linked to its restaurants last year.
“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,” said Neil Flanzraich, one of the directors.
According to the statement, Monty Moran, will retire in 2017, the company said without offering any fine details. Until that period, he will be an adviser.
Meanwhile company said 51-year-old Ells, who remains chairman, would follow a staff incentive program tied to customer experience.
Furthermore it said at an investor conference last week that a food safety program company started following the outcome of the outbreaks had resulted to a drop in the quality of customer service.
To bring back unhappy customers, Chipotle has distributed coupons for free and cut-rate meals, announced new menu items, invested on new technology and set up fresh strategy to enhance service.
Despite all that company’s sales didn’t improve, and the company’s CFO, Jack Hartung, cautioned investors last week that he was “nervous” about reaching full-year targets as company’s same-restaurant sales have dropped for four straight quarters, dropping 21.9% in the latest quarter.
Mr. Ells, who created the company in 1993, was the sole CEO until Moran was brought up to share the top job in 2009.
Moreover Chipotle Mexican Grill, (NYSE:CMG) also announced recently that it would publicize a new set of board members soon.