By Lisa Baertlein
LOS ANGELES (Reuters) - Chipotle Mexican Grill Inc (N:MGG), under activist pressure to revamp its board, expects to make an announcement shortly about a new slate of directors, the burrito chain's founder and co-chief executive said on Tuesday.
Billionaire investor William Ackman, who took a nearly 10 percent stake in the beleaguered burrito chain three months ago, wants multiple board seats with the aim of beefing up food safety and marketing, three people familiar with the matter have told Reuters.
The company also said its sales recovery is lagging and that it is working to improve service at underperforming restaurants, particularly in the Northeast.
In pre-market trading on Tuesday shares in Chipotle were down 7 percent at $368.23.
Chipotle is taking a careful look at existing directors, with an eye toward what can be strengthened, co-CEO Steve Ells said. In particular, he said the company is considering long director tenures and candidates with expertise in areas such as marketing, crisis management and corporate governance.
Reuters last month reported that Ackman and Chipotle had signed an agreement to engage in confidential discussions, a sign that the activist may be able to force change at the burrito chain without a costly and drawn-out proxy contest.
"We don't have any fundamental differences about the business," Ells said of Ackman.
The company's board long has been under fire from pension funds and other shareholders for being too insular, for the level of executive compensation, and for a handful of members having served more than 15 years.
Chipotle investors Amalgamated Bank and CtW separately have urged shareholders to name an independent chairman to replace Ells as leader of the board.