Chipotle’s board of directors proposed a 50-for-one split of its common stock that, if approved, would be one of the biggest stock splits in New York Stock Exchange history, according to the restaurant company. It would also mark the chain’s first stock split in its 30-year history.
The stock split is subject to shareholder approval at its annual meeting on June 6. If approved, shareholders of record as of June 18, 2024, will receive 49 additional shares for each share held, which will be distributed after market close on June 25. Chipotle's shares are expected to begin trading on a post-split basis at the market open on June 26.
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.
"This is the first stock split in Chipotle's 30-year history, and we believe this will make our stock more accessible to employees as well as a broader range of investors," CFO Jack Hartung said in a statement. "This split comes at a time when our stock is experiencing an all-time high driven by record revenues, profits, and growth."
Chipotle’s shares spiked to $2,798.34 following the announcement Tuesday. Prices are up nearly 75% year-over-year and over 320% throughout the past five years. Chipotle first went public in 2006 at $22 per share.
In conjunction with this proposal, Chipotle also announced a special one-time equity grant for all restaurant general managers as well as crew members with more than 20 years of service.
"We want to thank our general managers and tenured crew members for their hard work and dedication to Chipotle by providing a one-time equity grant as an additional incentive to continue delivering outstanding results and share in the financial success of our company," Chairman/CEO Brian Niccol said in a statement.
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