Steve Ells has stepped down as CEO of Chipotle Mexican Grill Inc., the company said Wednesday, ending his nearly 25-year tenure at the helm of one of the most revolutionary concepts in restaurant history.
Ells has been named executive chairman, and the company has started a search for a new CEO.
His departure comes as Chipotle struggles to regain its once otherworldly status with consumers following a series of foodborne illness outbreaks in 2015. The company’s unit volumes fell 23 percent in 2016 and have not recovered this year, as many observers expected.
That has cost Chipotle profits and slashed its stock price. The company’s stock, one of the hottest on Wall Street as recently as 2015, when its price peaked at more than $750 per share, fell to below $290 per share by Tuesday.
“I am incredibly proud of Chipotle and our people — and grateful to our loyal customers — and while we are continuing to make progress, it is clear that we need to move faster to make improvements,” Ells said in a statement. “Simply put, we need to execute better to ensure our future success.
“The board and I are committed to bringing in an experienced leader with a passion for driving excellence across every aspect of our business.”
Ells founded the Denver-based chain in 1993. The company received a major investment from McDonald’s in 1998 that helped it grow in subsequent years.
Chipotle was taken public in a 2006 IPO, when its stock doubled from its initial offering price of $22 per share.
Even after recent declines, $1,000 worth of Chipotle’s stock bought at the IPO would be worth nearly $13,000 today. The company eventually became one of the most highly regarded fast-casual chains in the country, with more than 2,300 locations.
Chipotle also led the push toward better sourcing of food products and the use of freshly prepared ingredients.
But efforts to regain customers following the foodborne illness outbreaks have not worked, and Ells said the company would be better off with a different CEO. He will focus on innovation once a successor is named.
“Bringing in a new CEO is the right thing to do for all of our shareholders,” Ells said. “It will allow me to focus on my strengths, which include bringing innovation to the way we source and prepare our food.”
Chipotle’s stock was halted Wednesday morning on the news. The company has retained an executive recruiting firm, Spencer Stuart, to lead the search.
“Steve is a visionary leader and one of the most successful restaurateurs in history,” said Neil W. Flanzraich, Chipotle’s lead independent director, in a statement. “Steve made the decision, and the board agreed, that now is the time to identify a new CEO who can reinvigorate the brand and help the company achieve its potential.”