Chipotle’s annual shareholder meeting on May 11 was set to be a doozy. Angry activists and investors were poised to unload on the restaurant chain’s co-CEOs, Steve Ells and Monty Moran.
Just two weeks prior, Chipotle had reported a $26.4 million quarterly loss—its first in a decade as a public company—following a high-profile E. coli outbreak and several subsequent food-safety incidents. Nearly one-third of restaurant sales had disappeared, and the stock had sunk by 30%. An attempt to shake up the company’s board of directors was almost certain, reports said. Its “failures,” as one major investment adviser had phrased it, “damaged the brand and erased billions in shareowner value.” Ten billion dollars since its peak, to be precise.
I arrive at Denver’s Grand Hyatt hotel shortly before 8 a.m. The meeting space, a windowless conference room, is surprisingly small and awkwardly intimate, with just three rows of nine chairs facing a cloth-draped table. Apparently, this is standard for Chipotle’s annual meetings, as is the fact that the proceedings are closed to the press. (I find my way inside by showing that a mutual fund in my 401(k) includes Chipotle shares.) As board member Kimbal Musk strides to the front row, he surveys the tiny room and jokes to another director about how this setting pales in comparison to the elaborate events that his brother, Elon, throws for Tesla’s shareholder meetings.
Ells and Moran march in minutes later and take their seats at the table. “Good morning,” Ells says, coffee in hand. Moran quickly runs through the agenda and other formalities. He soon opens the floor to questions. One of Chipotle’s harshest critics, CtW Investment Group’s Michael Pryce-Jones, stands and berates the company’s CEOs for nearly two minutes. “You’ve gone from a beloved brand to one that’s been unprecedentedly abandoned,” he scolds. Comparing their recent blunders with Volkswagen’s emissions scandal and BP’s Deepwater Horizon oil spill, he implores the board to “seriously consider resignations.”
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