Company executives said the decision was made in part to make its stock more accessible to employees.
Chipotle’s 50-to-1 stock split, proposed by the company in March, has been approved by the company’s shareholders. With the vote, which came during its annual meeting Thursday, Chipotle’s stock will begin trading on a post-split basis June 26. To facilitate the split, shareholders also had to approve an increase in the number of authorized shares. With this approval, Chipotle’s stock split becomes one of the largest in New York Stock Exchange history.
A stock split divides a company’s outstanding share count but doesn’t change its overall market value or capitalization. Such a move is generally seen as making a company’s shares more accessible for investors and employees. It is also a way to avoid a slowdown in buying activity, as record-high prices can deter some investors even though the market value is unchanged.
For Chipotle, shareholders of record as of June 18 will receive 49 additional shares for each share held, which will then be distributed after market close June 25, ahead of the June 26 trading date.
"We believe the stock split will make our stock more accessible to our employees as well as a broader range of investors," CFO Jack Hartung said in a statement. "With this historic decision, we'll be better able to reward our team members and empower them to have ownership in our company."
Chipotle has been trading well above $3,000 since late April and is up over 320% throughout the past five years. Chipotle made its debut on the public market in 2006 at $22 per share.
During a recent interview, Laurie Schalow, chief corporate affairs and food safety officer, reiterated that those prices were simply not attainable for many employees.
“This is going to make it more accessible for our employees, which is really important to us,” Schalow said.
The company also announced a one-time equity grant for all general managers, as well as employees with more than 20 years of service.
Contact Alicia Kelso at [email protected]
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