Activist investor Bill Ackman is likely to lower executive compensation and shake up the c-suite at Chipotle.

That’s according to Wednesday note from a team of Morgan Stanley analysts, after Pershing Square, founded by Ackman, revealed a 9.9% stake purchased at $1.2 billion, in the fast casual chain a day earlier—sending shares of Chipotle soaring.

Shares of the company have fallen about 42% since August 2015—when the once darling company’s series of food safety disasters, involving E. Coli, norovirus, and salmonella, first began. Despite aggressive marketing tactics including burrito giveaways and free guacamole, the company’s second quarter comparable sales still fell 23.6%—its third quarter in a row of declines.

But Ackman saw an opportunity in the ailing company—and the team of Morgan Stanley analysts led by John Glass highlighted five changes Ackman is likely to make in a bid to realize his investment:

  1. Change how compensation is handed out. Morgan Stanley noted that inside ownership of Chipotle stock is still relatively low—meaning theoretically, if executive packages included a higher percentage of stock, the c-suite would be more incentivized to boost performance. Chipotle shareholders previously slammed executives for their large pay packages in 2014, when the two co-CEOs earned a combined $49.5 million in the prior year. Their most recent compensation figures were less spectacular.
  2. Adding a wider range of executives, with expertise in marketing, cost control, and IT.
  3. A focus on expanding margins, since Chipotle “has been slow to adapt its cost structure to the reality of lower average unit volumes.”
  4. Ackman could also mean the end of new concepts such Chipotle’s new burger chain, or the beginning of aggressive investments. The concept in its current state is “lackluster,” the firm wrote.
  5. Limit adding new locations to protect returns and increase available free cash flow.

 

Though the firm, which has placed the equivalent of a “hold” rating on the stock, warned that activism’s traditional tools for restaurants, “spin offs, refranchising, asset sales and cost cuts,” won’t boost the stock in the short term.

“We see no quick fix to what Chipotle really needs,” the team wrote. “But the presence of a large and vocal investor may provide management more incentive to hasten their turnaround efforts, which appear to have stalled, and could cause the shorts to cover, at least for now.”

Ackman has had a mixed report card when it comes to activist investing. He was successful with General Growth Properties, but failed miserably with retailers such as Borders and J.C. Penney.