Starbucks has appointed Brian Niccol as its new CEO, replacing Laxman Narasimhan, who left the position after a brief 17-month tenure. Niccol's appointment is notable not only for the leadership change but also for the impressive compensation package he's set to receive.
Niccol's total compensation package from Starbucks is substantial, amounting to approximately $113 million. This package includes a $10 million sign-on bonus, a $75 million equity grant, and an additional grant starting in fiscal year 2025 that could be worth $23 million annually. Alongside these figures, Niccol will earn an annual salary of $1.6 million, with potential annual cash bonuses ranging between $3.6 million and $7.2 million, contingent on performance.
According to a filing with the United States Securities and Exchange Commission, Niccol’s initial base salary will be $1.6 million per year, with an annual cash incentive opportunity targeting 225% of his base salary, and up to 450% of base salary based on performance. Starting in fiscal year 2025, he will be eligible for annual equity awards with a target value of $23 million, aligned with the company's shareholder-approved equity plans.
In a unique arrangement, Niccol will not need to relocate to Starbucks' headquarters in Seattle. Instead, he will commute from his current residence. The company will cover any temporary housing costs he may incur and provide a personal chauffeur for his time in Seattle. Additionally, Starbucks will set up a small remote office for him in Newport Beach, ensuring he can work efficiently from there when not at the Seattle headquarters. Niccol will also have access to Starbucks' executive physical program and the company's plane for travel between his home, remote office, and headquarters.
A spokesperson for Starbucks expressed strong confidence in Niccol’s leadership capabilities. "Brian Niccol has proven himself to be one of the most effective leaders in our industry, generating significant financial returns over many years. His compensation at Starbucks is tied directly to the company’s performance and the shared success of all our stakeholders. We’re confident in his ability to deliver long-term, enduring value for our partners, customers, and shareholders," the spokesperson stated.
Niccol’s compensation package reflects not only his anticipated role but also the need to compensate for the lucrative position he is leaving behind at Chipotle. During his tenure at Chipotle, Niccol was instrumental in achieving an 800% increase in the company’s stock price and nearly sevenfold growth in profits. Starbucks' board hopes he will replicate this success at Starbucks, which has faced recent challenges and a significant decline in share price under Narasimhan’s leadership.
Narasinghan’s brief stint as CEO saw a 23.9% drop in Starbucks' share price, resulting in a Rs 32 billion decrease in market capitalization. With Niccol at the helm, Starbucks aims to reverse these trends and bolster its financial performance and market position.
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