Chipotle Mexican Grill Inc. (NYSE: CMG) saw its shares turn south on Wednesday after the burrito chain announced a change in its executive leadership. The company said that its chief marketing officer, Mark Crumpacker, will resign, effective Thursday, March 15.
It’s worth noting that this comes a month after Chipotle hired Taco Bell head Brian Niccol as its new chief executive, replacing founder Steve Ells.
According to the SEC filing:
The agreement entitles Mr. Crumpacker to cash severance totaling 26 weeks of pay at his base salary, and related benefits pertaining to post-employment extension of health insurance benefits, and also allows him a period of 12 months to exercise vested stock-only stock appreciation rights, rather than the 90-day period provided in the award agreements. The agreement further provides that Mr. Crumpacker releases any legal claims against Chipotle, will not disparage Chipotle or interfere with its relationships with customers, suppliers, shareholders or the public, and agrees to hold certain information about Chipotle confidential, subject to exceptions to ensure compliance with applicable law. The agreement also provides that for a one-year period following his resignation, Mr. Crumpacker will not (i) directly or indirectly, own, manage, operate, control, be employed, or engaged in any capacity (whether or not for compensation) by, or render services, advice, or assistance in any capacity to, a business operating fast-casual, quick-service or casual dining restaurants in the continental United States where Chipotle or any of its affiliates conduct business, or (ii) solicit or hire Chipotle’s employees, or induce any of Chipotle’s suppliers, licensees, or other business relations to cease doing business with Chipotle or interfere with the relationship between any such supplier, licensee, or other business relation and Chipotle. The agreement is subject to a customary revocation period by Mr. Crumpacker. Other previously-disclosed agreements entered into with Mr. Crumpacker and providing for post-employment payments or other benefits remain in effect as well.
Over the past year, Chipotle has underperformed the broad markets, with its stock down nearly 20%. However, in just 2018 alone, the company has seen its shares rise about 13%.
Shares of Chipotle were last seen down about 2% at $320.69 on Wednesday, with a consensus analyst price target of $309.42 and a 52-week trading range of $247.52 to $499.00.