One of Chipotle's (CMG) harshest critics is done pleading its case for change in the company's board room to the slow acting executives at the burrito giant, and has opted now to go directly to a well-known activist investor for help.
In an open letter to Pershing Square's Bill Ackman -- which owns a 9.9% of Chipotle's outstanding shares -- investment firm CtW Investment Group highlighted several changes it would like to see in the company's C-Suite. First is the recruitment of at least two new, independent directors (preferably to replace existing directors, says CtW) and the separation of the CEO and chairman jobs .
The open letter to Ackman arrives a day after Chipotle announced that founder Steve Ells would assume the role of CEO and that long-time co-CEO Monty Moran would leave the company. Ells will now directly oversee restaurant operations, strategic initiatives, and innovation projects. He will continue to retain the role of chairman.
"After announcing the phase-out of Chipotle's co-CEO structure, it seems Chipotle recognizes it's time for governance reform," CtW Investment Group lead analyst Derrick Wortes says. "However, the company has already indicated it won't take all necessary steps to ensure strong, independent board oversight," Wortes adds. In November, Wortes bluntly said it was time to "clean house" with respect to Chipotle's board.
Ells continued to assert on a conference call with analysts Monday that changes to Chipotle's board were coming soon, although he hasn't detailed those changes and if that includes giving up his chairman role.