(Corrects stock symbol, paragraph 1)
By Lisa Baertlein
LOS ANGELES Dec 6 Chipotle Mexican Grill Inc
, amid activist pressure to revamp its board and revive
sales following last year's string of food safety lapses, will
"shortly" announce a new slate of directors, founder and
co-chief executive Steve Ells said on Tuesday.
Billionaire investor William Ackman, who took a nearly 10
percent stake in the burrito chain three months ago, wants
several board seats with the aim of beefing up food safety and
marketing, three people familiar with the matter have told
Shares in Chipotle tumbled 7.8 percent to $365.33 on Tuesday
when Ells said he was nervous about meeting full-year targets.
Executives blamed poor customer service and underperforming
restaurants, particularly in the Northeastern United States,
for a slower-than-expected sales recovery.
Shares in Chipotle have lost 40 percent of their value since
Halloween weekend 2015, when the company's food safety problems
began grabbing national headlines.
Chipotle co-CEO and director Monty Moran did not join fellow
executives at Tuesday's Barclays investor conference in New
York, fueling speculation by investors and analysts that he may
be ousted in the shakeup. Moran has been co-CEO since January
2009 and rarely misses a presentation.
Moran oversees operations at Chipotle. The company's
operational challenges "make you wonder about his absence at an
investor meeting," Hedgeye Risk Management analyst Howard Penney
Chipotle spokesman Chris Arnold said company management has
Ells said Chipotle is taking a careful look at existing
directors, with an eye toward what can be strengthened. In
particular, he said the company is assessing long director
tenures and considering new candidates with expertise in areas
such as marketing, crisis management and corporate governance.
Reuters last month reported that Ackman and Chipotle had
signed an agreement to engage in confidential discussions, a
sign that the activist may force change at the burrito chain
without a costly and drawn-out proxy contest.
"We don't have any fundamental differences about the
business," Ells said of Ackman.
Chipotle's board long has been under fire from pension funds
and other shareholders for being insular, entrenched and overly
generous with compensation.
Chipotle investors Amalgamated Bank and CtW in November
urged shareholders to name an independent chairman to replace
Ells as leader of the board.
Five of Chipotle's nine directors have served for more than
18 years. Darlene Friedman, John Charlesworth and Ells are the
longest serving with more than 20 years each.
(Reporting by Lisa Baertlein in Los Angeles; editing by Bill
Trott and Grant McCool)