In a surprise announcement Tuesday morning, Starbucks announced that Chipotle CEO Brian Niccol is the coffee giant’s new CEO, replacing Laxman Narasimhan. Niccol will begin his new role on Sept. 9. Starbucks CFO Rachel Ruggeri will serve as interim CEO until then.

Chipotle, the popular fast-casual restaurant chain, also announced Tuesday that Niccol, CEO since 2018, will leave the company on August 31. Scott Boatwright, who joined Chipotle in 2017 and serves as chief operating officer, has been named interim CEO. The board will also conduct an external search for a CEO in the spirit of good corporate governance, Chipotle confirmed in an email.

Hartung has agreed to take on a new role at the company as president of strategy, finance and supply chain for an indefinite period. Adam Rymer, vice president of finance and future CFO, will be among those reporting to Hartung.

As Chipotle’s CFO since 2002, Hartung knows the company inside out, even knowing how to appreciate its special spices. Last year, as Chipotle, founded by Steve Ells, celebrated its 30th anniversary, I spoke with Hartung about his first impressions of the company.

“I’d be lying if I said I knew we’d be exactly where we are today,” he told me. “But I was optimistic when I joined Chipotle. It kind of blew my mind that you have a young chef who started this fast-casual restaurant company based on what fine-dining restaurants do.”

When he first tried a chipotle burrito, he enjoyed the ingredients, like rice. “I used to think rice was kind of bland and didn’t have much flavor,” Hartung told me. “But not if you cook it right. If you cook it so it’s not too starchy and not too sticky, and you season it properly with the right amount of citrus and cilantro, it’s delicious.”

“In good hands”

Chipotle reported its second-quarter results on July 24. Total revenue rose 18.2% year over year to $3 billion, and comparable restaurant sales rose 11.1%. During the quarter, Chipotle opened 52 new company-owned restaurants. Following the announcement of Niccol’s departure on Tuesday morning, Chipotle’s shares, which trade under the ticker symbol CMG, were down about 8% at market close.

Chipotle is “both in a good place and in good hands” with Boatwright serving as interim CEO and Hartung postponing his retirement and staying in his new role, Nick Setyan, an equity analyst at Wedbush Securities, wrote in a note Tuesday. “We credit both leaders, in addition to Brian Niccol, for CMG’s turnaround.”

Michael Halen, senior consumer analyst at Bloomberg Intelligence, and contributing analyst Amir Islam wrote in a note that Chipotle appears well positioned to weather Niccol’s departure. Assets reported.

Hartung and Niccol were “an important part of the leadership team that is credited with creating immense shareholder value,” Scott W. Simmons, co-managing director of executive search firm Crist Kolder Associates, told me. “The board certainly does not want to lose Niccol and Hartung in quick succession,” Simmons said.

“I think Chipotle needs a CEO with extensive QSR (quick service restaurant) experience and a proven track record of driving sustainable growth, which is so difficult to achieve in the QSR space,” Simmons added. “I think it would be a mistake to hire a CEO who wants to deviate too much from the current strategy.”

And for now, Hartung will continue to help shape Chipotle’s strategy.

Sheryl Estrada
[email protected]

The following sections of CFO Daily were curated by Greg McKenna.

Leaderboard

Elias Olmeta was named CFO of MeridianLink, a software provider for financial institutions and consumer reporting agencies, effective August 26. He succeeds current CFO Larry Katz, who has been promoted to president of the company. Olmeta was most recently CFO of Mitchell International, a SaaS provider for the automotive and insurance industries, and currently serves on the board of directors of AutoCanada, Canada’s largest auto dealer group.

Chris Sands was named CFO of digital payments company InvoiceCloud. Sands previously served in the same role at digital healthcare company IntelyCare and MineralTree, another software and payments company.

Big deal

The value of global private equity and venture capital deals totaled $369.51 billion in the first half of 2024, up 26% year-on-year, according to data from S&P Global Market Intelligence. Despite recession fears and concerns about high interest rates, deal value in July totaled $59.26 billion, up 33% and 44% year-on-year and 2022, respectively.

The largest deal in July was Sixth Street Partners’ agreement to take reinsurer Enstar Group private for $5.1 billion. Overall, the technology, media and telecommunications sector was the most active, with 380 private equity transactions.

Further information

“Salary budgets for raises will decline in 2025,” says a new report from compensation software provider Payscale. U.S. employers are planning a 3.5% raise next year, 10 basis points lower than last year, according to the annual survey of over 1,500 clients. The report found that base salary increases remain above the 3% mark that averaged before the COVID-19 pandemic.

Overheard

“Starbucks’ decision to replace CEO Laxman Narasimhan with Brian Niccol is, in our view, a no-brainer. Niccol was responsible for Chipotle’s robust turnaround and is arguably the most successful CEO of a publicly traded restaurant in the U.S.”

— Michael Halen, senior consumer analyst at Bloomberg Intelligence, and contributing analyst Amir Islam wrote in a note shortly after Niccol’s hiring: Assets reported.