In a report from Wall Street Journal, Chipotle Mexican Grill, Inc. (NYSE:CMG) and Bill Ackman are discussing a board position where the hedge fund billionaire would have a voice in the burrito chain’s boardroom. Talks between the two parties are ongoing but may not result in an agreement.
A few days ago, Ackman stated that he has an “extremely constructive relationship, with the company since he took almost 10 percent stake in September. An agreement between the two could spark investor confidence. Investors are still skeptical about Chipotle due to the cratering sales from the E. coli outbreak a year back. “The food-safety crisis really exposed shortcomings in Chipotle’s management and governance, said Jeff Gramm, an investor who owns $8 million in shares.
CtW Investment Group addressed shareholders in a letter asking them to “withhold support” for the reelection of two directors during the annual shareholders’ meeting back in May. The members ended up staying on the board for at least one more year, Chipotle has not made any announcements about new candidates.
“The dialogue we’ve had so far with Pershing has talked about driving long-term shareholder value, talks about recovering the business model and from what they’ve said so far, they believe Chipotle is a special brand and we’re going through a tough time right now and they want, just like everyone else, to see us recover our sales, recover our business and if we do that we’re going to get back to our previous stock price and add shareholder value from there,” Jack Hartung, Chipotle’s CFO said on CNBC’s “Mad Money” on last week.