Bloomberg News
Chipotle Mexican Grill Inc.’s Mark Crumpacker, one of the beleaguered company’s top four executives, was placed on administrative leave following reports that he was linked to a cocaine bust in New York.
Crumpacker, who was named marketing head in 2009 and more recently took the title chief creative and development officer, was among more than a dozen people facing charges linked to alleged cocaine purchases over the last year, according to the New York Daily News. The executive’s duties have been transferred to other senior managers, Chipotle said in a statement Thursday.
“We know very little about these charges,” Chris Arnold, a spokesman for the Denver-based company, said in an email. “Due to the nature of this situation, Mark has been placed on administrative leave. We made this decision in order to remain focused on the operation of our business and to allow Mark to focus on these personal matters.”
The report comes as Chipotle struggles to bounce back from a string of E. Coli and norovirus outbreaks, with Crumpacker, whose compensation was $4.28 million last year, leading the marketing effort to restore the company’s image. Earlier this week, he helped unveil a new loyalty program called Chiptopia Summer Rewards, aiming to get customers to come back.
Eighteen “repeat customers” of a Lower East Side-based cocaine operation were indicted for allegedly purchasing the drug at locations ranging from delis, pharmacies, restaurants, bars, apartments, hotels and workplaces, Manhattan District Attorney Cyrus Vance Jr. and New York City Police Commissioner William Bratton announced Thursday.
The ring was allegedly run by three men, who used livery services to deliver more than $75,000 worth of drugs to customers throughout the city, according to prosecutors.
Some of the names of the “repeat customers” were blacked out of the indictment because they had not yet been arraigned. The New York City Police Department referred questions to Vance’s office. Emily Tuttle, a spokesperson for the district attorney, declined to comment when asked about Crumpacker.
The repeat customers were all charged with criminal possession of a controlled substance in the seventh degree, a misdemeanor that carries no more than one year in prison.
Before taking over Chipotle’s marketing in 2009, Crumpacker was an executive at brand adviser Sequence LLC, which he co-founded in 2002. Chipotle has used the firm to help with its Food With Integrity campaign.
Crumpacker has a bachelor’s of fine arts from the Art College of Design in Pasadena, California. He also attended the University of Colorado.
Crumpacker had a salary of $532,000 last year, and his compensation included additional stock awards worth $3.61 million.
Chipotle’s same-store sales plunged 30 percent in the first quarter of this year, and the chain posted its first-ever loss as a public company. Chipotle is scheduled to report second-quarter results on July 21.
Chipotle shares fell 0.8 percent to $399.56 at 11:13 a.m. in New York after the company’s statement was released late Thursday. Crumpacker’s absence and the negative press surrounding the situation could hinder Chipotle’s bid to recover from the food-safety crisis, said Brian Vaccaro, an analyst at Raymond James.
“This news creates some headline risk that could temporarily negatively impact same-store sales trends,” Vaccaro said.
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