Restaurant chain Chipotle Mexican Grill has become a golden standard when it comes to stock growth in recent years. However, the company is concerned that the high share prices are preventing its workers from owning a part of Chipotle.
According to Chipotle’s CFO Jack Hartung, the company is planning a 50-to-1 stock split in hopes of making the shares more affordable for its employees.
“We think it’ll be easier for our employees to be shareholders,” Hartung said via The Wall Street Journal. “And that means, yes, it’s easier for them to buy the stock if they want, but it’s also easier for us to give them the right amount of stock.”
As part of their reward program, Chipotle has been giving top-performing employees packages of restricted stock units. However, with the Chipotle stock trading at more than $3K per share this year, handing out these kinds of rewards became challenging.
Chipotle also hopes that the stock split could indirectly improve the quality of its service. Having a stake in the company would encourage staff to stick around for longer and perform at their best.
The 50-to-1 stock split is expected to be proposed to shareholders on June 6. If approved, Chipotle stockholders would receive 50 new shares for every share they previously owned.
Following the news of stock split plans, Chipotle stock jumped 1.39% on Monday and closed at $3,199.10 per share. The share has been 42.51% up year-to-date.