Understanding settlement agreements is important to see the complete picture of the corporate governance landscape.
When the news broke in September 2016 that billionaire William A. Ackman had taken a 9.9% stake in Chipotle Mexican Grill, the stock of the burrito restaurant chain increased by nearly the same percentage in early trading. Pershing Square Capital Management, the hedge fund led by Ackman, revealed that it would hold discussions with Chipotle over a wide range of issues—from governance to operations—thus signalling the launch of an activist campaign.
In December of the same year, Ackman reached a settlement with Chipotle: he agreed to refrain from commenting publicly on the firm and to keep his ownership stake to a maximum of 12.9% for t
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