INSUBCONTINENT EXCLUSIVE:
If Starbucks meets those targets and other goals, his pay could easily surpass $100 million in his first year (Photo: Reuters)3 min read
Last Updated : Aug 16 2024 | 6:55 AM IST
Incoming Starbucks CEO could make well in excess of $100 million in his first year with the
company under an incentive-laden contract, and he will not be required to relocate from his home in California to Seattle, the home of the
global coffee giant.
Starbucks announced on Tuesday that Brian Niccol would become its chairman and CEO, taking over from Laxman
Narasimhan, who stepped down abruptly after spending a little more than a year as the company's top executive
Niccol will become Starbucks' chairman and CEO on Sept 9.
Niccol is among the mostly highly sought after corporate executives after
establishing a track record of success in turning around companies that have hit a rough patch, including Taco Bell and, most recently,
Chipotle.
Niccol took the top job at the California chain in 2018 when Chipotle was being roiled by a series of foodborne illness
outbreaks that had sickened more than 1,000 of its customers over several years.
Revenue at Chipotle has nearly doubled since his arrival
after he energised product innovation and at the same time, instituted employee benefits like a programme that pays employees' college
tuition costs at certain schools.
Starbucks is counting on Niccol to revive fading sales and re-establish the company as a destination
where customers are willing to pay premium prices for its products.
In a filing with the Securities and Exchange Commission late
Wednesday, Starbucks said that the 50-year-old Niccol will receive a cash bonus of $10 million as well as $75 million in equity to make up
for what is being forfeited by his abrupt departure from Chipotle
The equity component of his pay package will vest over time and is contingent on meeting performance targets.
If Starbucks meets those
targets and other goals, his pay could easily surpass $100 million in his first year.
Niccol's annual base salary will be $1.6 million
He'll also have an annual cash incentive opportunity at a target of 225% of his base salary and a maximum of 450% of base salary
If he achieves the maximum incentive, it would be about $8.8 million.
Starting in fiscal 2025, Niccol will be eligible to receive annual
equity awards worth up to $23 million.
Perhaps just as notable, Starbucks is not requiring that Niccol relocate to Starbucks headquarters
in Seattle, saying he can remain in Newport Beach, California, where he currently lives and where Chipotle is based.
According to a
regulatory filing, Starbucks will help create, with assistance from Niccol, a small remote office in Newport Beach and the company will hire
an assistant for Niccol at that location.
Niccol will commute to Seattle as needed, as well as embark on any other business travel that's
deemed necessary.
Starbucks Chief Financial Officer Rachel Ruggeri is serving as the interim CEO until Niccol arrives in early
September.
Shares of Starbucks dipped slightly Thursday afternoon after spiking 20% when Niccol's appointment was announced earlier this
week.(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is
auto-generated from a syndicated feed.)First Published: Aug 16 2024 | 6:54 AMIST
