Chipotle CEO steps aside, food scares and bad PR cloud his tenure

By Business Leaders FOXBusiness

Chipotle on the hunt for new CEO

FBN's Cheryl Casone on Chipotle's search for a new CEO.

Chipotle’s (CMG) CEO Steve Ells will step aside from his role of CEO and chairman, transitioning into the role of executive chairman with a focus on product innovation. This after several years of food scares, e-coli breakouts and public relations snafus.

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Chipotle shares rose nearly 4% in morning trading.

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“Bringing in a new CEO is the right thing to do for all our stakeholders. It will allow me to focus on my strengths, which include bringing innovation to the way we source and prepare our food,” Ells said in a statement.

Once the board identifies a new CEO he will begin his new role.

The board has formed a search committee comprised of directors Robin Hickenlooper and Ali Namvar, as well as Ells, to identify a new leader. According to the company’s press release, they will search for a leader “with demonstrated turnaround expertise to help address the challenges facing the company, improve execution, build customer trust, and drive sales.”

Chipotle has dealt with a great deal of controversies. Most recently, actor Jeremy Jordan alleged that eating at Chipotle sent him to the hospital. Chipotle formally responded, noting that they “couldn’t confirm any link to Chipotle.” They also said they had attempted to get in touch with Jeremy directly.

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In July, Chipotle had to temporarily close a Virginia restaurant after a sick employee reportedly caused some patrons to get the norovirus. Before that, the company had E. coli outbreaks in Seattle and Boston, as well as norovirus illnesses in Simi-Valley, California, and a salmonella outbreak in Minnesota.

In August of 2013, Bloomberg reported that the company’s meat was not actually completely "antibiotic-free,” as it claimed. A Chipotle spokesman told Bloomberg that they do allow beef producers to use antibiotics to treat disease but won’t allow them to routinely use antibiotics to prevent diseases and promote faster growth. Chipotle later retracted that statement, but two years later, it admitted that it has allowed its farmers to occasionally use "antibiotics" during a pork shortage, as previously reported by FOX Business

FOX Business also previously reported that Chipotle’s "Farewell to GMOs" claims aren’t entirely accurate. At the time, Chris Arnold, a Chipotle spokesman, told FOX Business that they have "always been clear that our soft drinks contained GMO ingredients, and that the animals from which our meat comes consume GMO feed. But, that does not mean that our meat is GMO, any more than people would be genetically modified if they eat GMO foods,” he said.

Chipotle’s shares have lost 24% this year.

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