Chipotle says one-third of directors will not run again

Fri Mar 17, 2017 12:47pm EDT
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(Reuters) - Chipotle Mexican Grill Inc (CMG.N: Quote), which has been under pressure from activist shareholder Bill Ackman, on Friday said four of its 12 directors would not stand for re-election at the burrito chain's upcoming shareholder meeting.

John Charlesworth, Patrick Flynn, Darlene Friedman and Stephen Gillett have opted not to be on the ballot for the May 25 election, Chipotle said.

Chipotle's board long has been under fire for being too entrenched and too cozy with management. Shareholders have sought a major corporate overhaul as the chain battles to recover from a string of food safety stumbles in late 2015 that damaged its sales and reputation.

The company said the latest news represents good corporate governance and is not the result any influence from Ackman's New York-based hedge fund, Pershing Square Capital Management LP, which has a 10 percent stake in Chipotle and is its largest shareholder.

"These departures are the product of individual decisions, and are in no way part of our agreement with Pershing Capital and Mr. Ackman," Chipotle spokesman Chris Arnold said in a statement.

Pershing declined to comment.

Friedman is the Denver-based company's longest-serving director, with a 22-year tenure. Charlesworth and Flynn have served on the board for nearly two decades, while Gillett has been a director for about two years.

Chipotle in December appointed four new members to its board, including one from Pershing.

Some investors also are lobbying for a change in Chipotle's board leadership. They want an independent chairman at the company, where founder Steve Ells serves as both chairman and chief executive.   Continued...

Signage for a Chipotle Mexican Grill is seen in Los Angeles, California, United States, April 25, 2016. REUTERS/Lucy Nicholson/File Photo