business

Chipotle Seeks a New CEO Who Can Restore Buzz for a Damaged Brand

  • Panera, Domino’s, Taco Bell executives could be contenders
  • ‘Industry agnostics’ need not apply, analyst Ramakrishnan says
Nick Setyan, Wedbush analyst, and Bloomberg Intelligence’s Michael Halen, discuss management changes at Chipotle.

Who wants to take on the toughest job in the restaurant industry?

That’s the question facing Chipotle Mexican Grill Inc. as the company searches for a new chief executive officer to replace Steve Ells, who said last month he will be stepping down. His successor will inherit a brand that’s been badly tarnished by a food-safety crisis, and will face intense pressure to mount a turnaround, which has proved elusive in the more than two years since the foodborne-illness issues burst into public view.

Chipotle’s shares are set to finish 2017 down for a third straight year. Bill Ackman, whose Pershing Square Capital is the chain’s largest holder, hasn’t commented on who should lead the company. The billionaire investor backed a shake-up of the board last year that saw four directors step down. Two of the new additions -- Robin Hickenlooper and Ali Namvar -- are leading the CEO search.

Ells, who founded the Denver-based company in 1993, is staying on as chairman, which raises questions about how much autonomy the CEO will have to set a new course.

Another key challenge will be bringing some buzz back to the brand, which was built on making fast food with better ingredients. Executive recruiters and restaurant analysts have said that Chipotle needs a leader who understands its food culture and has the operational experience to effectively manage more than 2,300 eateries.

“With a lot of businesses, you can get an industry agnostic, but restaurants are different,” said Umesh Ramakrishnan, founding partner of executive recruiter Kingsley Gate Partners. “If you don’t know the industry, margins can dry up real fast.”

Here’s a look at five possible candidates.

Ron Shaich

Shaich, 63, the outspoken founder of Panera Bread Co., sold the business to JAB Holdings earlier this year and announced he would step down as CEO on Jan. 1. Shaich, who also co-founded Au Bon Pain, is credited with boosting same-store sales at Panera by investing in technology and cleaning up the chain’s menu. Chipotle has lagged on digital initiatives, and Shaich shares a vision for healthier fast food with Ells.

J. Patrick Doyle

Doyle, 54, has spent 20 years at Domino’s Pizza Inc. and has been CEO of the chain since 2010. Domino’s has been a restaurant-industry standout, embracing technology to make ordering easier and boost sales. The shares closed 2010 at $15.95 and now trade at about $190. The company has posted double-digit increases in same-store sales in the U.S. in each of the past two years.

Cheryl Bachelder

Bachelder, 61, a veteran of Domino’s and KFC, led the fried chicken chain Popeyes for about 10 years before leaving in March when it was purchased by Burger King parent Restaurant Brands International Inc. She oversaw the expansion of the chain to almost 2,700 locations. Between 2011 and 2016, same-store sales in the U.S. climbed an average of 4.5 percent over the past six years.

Brian Niccol

Niccol, 42, has been CEO of the Mexican-themed chain Taco Bell since 2015, overseeing more than 6,500 restaurants. Chipotle has knocked its rival’s food for being overly processed, but Niccol has kept sales humming with buzzy limited-time only items and an embrace of digital ordering that has connected with younger diners. Under his leadership, Taco Bell has also had a knack for social-media marketing, which could be key as Chipotle tries to lure diners back to its restaurants.

Lucy Brady

Brady joined McDonald’s Corp. in September 2016 after 19 years at Boston Consulting Group. She’s been serving as senior vice president for corporate strategy, business development and innovation at the burger chain, with operates more than 14,000 restaurants in the U.S. Brady replaced Chris Kempczinski, who had the job for about a year before taking over U.S. operations. McDonald’s was an early investor in Chipotle, and industry observers have said it could benefit from some the the operational efficiency and supply-chain experience McDonald’s is known for.

— With assistance by Matthew Boyle

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