Updated from 1:58 p.m. with comments from a CtW analyst.
Chipotle (CMG) just can't seem to catch a break.
Mere days after announcing a massive earnings miss and seeing a new burger concept open to harsh reviews, two small investment firms -- Amalgamated Bank and CtW Investment Group -- said they jointly filed a shareholder proposal against Chipotle to remove founder and co-CEO Steve Ells as chairman and replace him with an independent director, according to Reuters. The firms work with union-sponsored pension funds. CtW Investment Group previously tangled with Chipotle on corporate governance issues in April.
"We think it's the right time to clean house. It's past time for Chipotle's board to grow up so that it reflects the size of the company," CtW Investment Group lead analyst Derrick Wortes said in a phone interview.
Wortes said CtW would like someone from outside the company with "solid" risk management skills to replace Ells. Asked whether activist investor Bill Ackman -- who owns about 9.9% of Chipotle's shares through his firm Pershing Square -- fits that description, Wortes said that a person with a longer-term view of the business may be a better fit.
Chipotle didn't immediately respond to requests for comment.
After a dreadful run of sales and earnings following health scare issues last year, the two investment firms certainly have reason to question Ells' standing as chairman. For starters, Ells welcomed back long-time friend Mark Crumpacker as chief marketing officer with open arms in September after Crumpacker was arrested and charged with cocaine possession in July. Few other publicly traded companies would have been as kind in dealing with the issue.