How Chipotle's Founder Made His Millions
Brett Arends
05/16/07 - 10:26 AM EDT
Fourteen years ago, a 28-year-old chef borrowed money from his dad to open a
taqueria in Denver.
Today, that
taqueria is Chipotle, the hottest restaurant chain in the U.S., and that chef, founder Steve Ells, is doing very well indeed.
How well?
Take a look at the public filings.
Steve Ells has seen his personal fortune soar to nearly $100 million since
Chipotle Mexcan Grill (CMG Quote) came to the stock market just 16 months ago.
That works out at about $1.4 million a week since the company filed to go public.
Not bad. You want guacamole with that?
Ells trained at the Culinary Institute of America in Hyde Park, N.Y., and began his career working at Stars restaurant in San Francisco.
The success shouldn't surprise anyone who has walked past America's hottest restaurant chain. Whenever you go, there's a line stretching to the door.
Chipotle's stock, which went public at $22 in January 2006, doubled on its first day on the market, and it has been all hot sauce since. It just hit a record $83.42 before easing to $81.91. It has jumped $16 in the last couple of weeks alone as the company's latest figures shot out the lights again.
Today it employs 16,000 people, most of them full time, in more than 600 restaurants around the country.
When it comes to Chipotle, there are two kinds of analysts on Wall Street. There are those who are surprised that the company keeps beating expectations. And then there are those who have actually eaten at one of the restaurants.
Unavoidable corporate cheerleading: Jim Cramer has been pounding the tortilla about this stock for a long time.
McDonald's (MCD Quote) took a controlling stake in the company back in 1998 and spun it off last year. It handed out most of the shares to its investors.
As of the last proxy, Ells owned 845,050 so-called B-shares, which have extra votes but otherwise count as regular stock. Value at current market prices: about $69 million.
He's holding options on over another 300,000 shares, with exercise prices ranging from $14.79 to $63.89. Value: Another $14.8 million. This stock is rising so fast that he has made $1.4 million just on the options he was given three months ago.
Then you've got to count 55,000 shares of restricted stock, worth $4.5 million, plus the $5.7 million in shares he has already sold.
Total: $94 million.
"It's definitely been a good run since our IPO a year and a half ago," said spokesman Chris Arnold. "Ultimately, in the restaurant business it's good food that wins, and Chipotle has been on a quest to source better and better ingredients."
Chipotle boasts a policy of "food with integrity" and emphasizes quality, all-natural ingredients. Ells pioneered using only free-range pork and other organic ingredients. That is, say aficionados, the reason why Chipotle burritos taste so good.
It's good to know that, for all the hedge-fund tycoons and corporate bandits out there, the system can still work. You can still make a fortune in America by building a better mousetrap ... or, in Ells' case, a better burrito.
