Good morning. Chipotle Mexican Grill’s board of directors officially appointed Scott Boatwright as chief executive officer on Monday. Boatwright had been serving in an interim role following the abrupt departure of former CEO Brian Niccol, who left in August to take the top job at Starbucks. As he makes plans for Chipotle’s next steps, Boatwright is likely to look to CFO Adam Rymer, who was recently promoted to the C-suite, as a strategic partner.
Boatwright, who was selected after “a robust and thorough process,” was previously chief operating officer and chief restaurant officer at Chipotle, a fast-casual restaurant chain, which he joined from Arby’s in 2017.
“I am passionate about our menu and energized by our people, and believe that I, along with our esteemed bench of tenured leaders, will deliver on our priorities and achieve our long-term growth goals,” Boatwright said in a statement.
He was the most logical choice for CEO “given his instrumental role in leading Chipotle’s efforts to improve operations, integrate new technology, reduce employee turnover, and bolster customer satisfaction,” William Blair analyst Sharon Zackfia published in a note on Monday.
With Jack Hartung, the former longtime finance chief, remaining at Chipotle in a new role and Rymer in place as CFO, “we remain confident in Chipotle’s prospects given the depth of its management bench,” Zackfia writes.
Rymer, a 15-year Chipotle veteran, began his role as CFO on Oct. 1, previously serving as VP of finance. After Niccol announced his departure from the company this past summer, Hartung, who joined the company as CFO in 2002, scrapped his plans to retire on March 31. Hartung started his new role, indefinitely, as president and chief strategy officer on Oct. 1.
Boatwright, Rymer, and Hartung have all been involved in developing Chipotle’s strategy. Five key factors include running restaurants with a people-accountable culture, amplifying technology and innovation, developing and retaining diverse talent at every level, improving overall guest engagement, and accelerating new restaurant openings, Boatwright said during Chipotle’s Q3 earnings call on Oct. 29.
William Blair reiterated its outperform rating on Chipotle. The firm says a strong line of sight exists on 20%-plus EPS growth in both 2024 and 2025, followed by a sustainable mid- to high-teens EPS growth over the next 10 years. However, William Blair analysts also note that some risks include exposure to avocado costs, ongoing pressure from wage inflation, “intense competition,” and economic sensitivity.
Speaking of intense competition, after customers complained about Chipotle’s inconsistent portion sizes earlier this year, the company made sure that all its stores’ scoop sizes were up to par, and it paid the price, Fortune reported.
“The benefit of last year’s menu price increase was more than offset by inflation across several items, most notably avocados and dairy, as well as higher usage as we focused on ensuring consistent and generous portions,” Rymer said during the Q3 earnings call.
Boatwright said on the call the company remains committed to doling out generous portions despite the higher costs. And it plans to offset some of the costs through “efficiencies and innovation” in its supply chain over the next several quarters, Rymer said.
Chipotle will seemingly need to find the right recipe to balance portion size with costs.
Sheryl Estrada
sheryl.estrada@fortune.com
The following sections of CFO Daily were curated by Greg McKenna.
Leaderboard
Cathy W. Liles was promoted to CFO of Old Point Financial Corporation (Nasdaq: OPOF), as well as EVP and CFO of Old Point National Bank, effective immediately. She has served as the Virginia bank’s interim CFO since July after joining the company in May as SVP and chief accounting officer. She previously held the roles of SVP and chief accounting officer at American National Bankshares and also served as SVP and CFO for Carter Bank & Trust.
James Richardson was appointed CFO and chief accounting officer of Inspired Entertainment (Nasdaq: INSE), a gaming technology company, effective Jan. 1. He arrives from Manchester Airports Group, where he served as group commercial finance director. He previously was the global finance director for William Hill’s online betting and gaming business and has held senior financial roles at DFC Global and Global Payments.
Big Deal
What is power, and how do you measure it? Those are the questions Fortune asked while assembling its debut list of the 100 Most Powerful People in Business. While perhaps a vague concept, it’s certainly something hard won and easily lost, Lee Clifford writes, and never static.
Fortune’s editors scored candidates on a variety of metrics, including the size of the business the person runs and the health of that business. The team also judged contenders on the scale of their innovations, influence, and impact, along with considering one’s place in the arc of their career.
The list includes leaders from 40 industries spread across 16 countries. There are serial entrepreneurs like Elon Musk, whose bet on Donald Trump appears to have paid off big. Meanwhile, most chief executives would likely take a call from Nvidia CEO Jensen Huang, whose company sits at the heart of the AI boom, ahead of the president.
In the end, Clifford writes, the people on the list all share a vital trait: Their words, deeds, and wealth shape what others around them think and do.
Going deeper
“Future of Finance” is a new limited podcast series from the Wharton School at the University of Pennsylvania hosted by Itay Goldstein, the chair of the school’s finance department. He’s joined on the first episode by Hyun Song Shin, economic adviser and head of research at the Bank for International Settlements, and Loretta Mester, the former president and CEO of the Federal Reserve Bank of Cleveland. They discuss the collapse of Silicon Valley Bank, Credit Suisse, and other small to mid-level banks in 2023, analyzing regulatory gaps and possible protections for the banking system.
Overheard
“We often end up overestimating what happens in the short run, and we end up significantly underestimating what happens in the long run. I think that is extremely true here.”
— Zig Serafin, CEO of management-software company Qualtrics, said at the Fortune Global Forum conference in New York City on Monday while comparing AI to the Industrial Revolution.
