Chipotle Mexican Grill Inc said founder and co-Chief Executive Steve Ells would become sole CEO, a position he held from 1993 until 2009, after Monty Moran stepped down following a series of food safety lapses that hit its sales and reputation.
The burrito chain, whose shares were up 3 percent in early trade, has been struggling to recover from outbreaks of E. coli, salmonella and norovirus linked to its restaurants last year.
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"Given the ongoing challenges facing the company, the board felt strongly that it was best for Steve to resume leadership of the company going forward," Neil Flanzraich, the company's lead director, said in a statement on Monday. [Bw93l1rYa]
Moran, 50, will retire in 2017, the company said without providing details. Until then, he will be an adviser.
Chipotle said 51-year-old Ells, who remains chairman, would pursue a staff incentive program tied to customer experience.
The company said at an investor conference last week that a food safety program it had put in place in the aftermath of the outbreaks had led to a drop in the quality of customer service.
To lure back customers, Chipotle has issued coupons for free and discounted meals, introduced new menu items, spent on new technology and laid out plans to improve service.
Sales have remained weak, though, and the company's chief financial officer, Jack Hartung, told investors last week that he was "nervous" about meeting full-year targets.
Chipotle's same-restaurant sales have fallen for four straight quarters, dropping 21.9 percent in the latest quarter.
Ells, who founded the company in 1993, was the sole CEO until Moran was promoted to share the top job in 2009.
Chipotle said last week it would announce a new slate of board members soon.
Billionaire investor William Ackman, who took a nearly 10 percent stake in the company three months ago, wants several board seats with the aim of improving up food safety and marketing, sources have told Reuters.
Chipotle's shares, which traded as high as $758.61 last August, have lost about 23 percent of their value since the start of the year, closing at $370 on Friday.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Anil D'Silva and Ted Kerr)