Starbucks has made a bold move to attract a new CEO, offering a substantial compensation package worth approximately $113 million to Brian Niccol. This hefty sum highlights the high stakes involved in his hiring, as the coffee giant seeks to regain momentum after a challenging period under former CEO Laxman Narasimhan.
Niccol’s compensation breakdown includes a $10 million sign-on bonus, a $75 million equity grant, and an additional annual grant potentially worth $23 million starting in fiscal 2025. On top of this, he will receive a $1.6 million annual salary and a performance-based cash bonus ranging from $3.6 million to $7.2 million.
To ease Niccol’s transition from his current residence in Newport Beach, California, Starbucks has agreed to significant perks. Niccol won’t be required to relocate to Starbucks’ Seattle headquarters, instead commuting as needed. The company will cover the cost of temporary housing and provide a personal chauffeur in Seattle until he finds permanent accommodations. Additionally, Starbucks will set up a small remote office in Newport Beach and offer Niccol use of its corporate jet for travel between his home and headquarters.
Starbucks’ decision to offer such an impressive package is largely influenced by Niccol’s successful tenure at Chipotle Mexican Grill. During his leadership at Chipotle, the company saw a remarkable 800 per cent increase in stock price and a nearly sevenfold rise in profits over six years. Starbucks is hopeful that Niccol can replicate this success and drive significant growth for the coffee giant.
In recent years, Starbucks has faced challenges under Narasimhan, including a 23.9 per cent drop in share price and a $32 billion market cap loss. The company is now looking to Niccol to bring fresh leadership and turn things around.
Since the pandemic, Starbucks has adjusted its remote work policies. Founder Howard Schultz has emphasized the importance of in-office collaboration, mandating that employees within commuting distance return to the office at least three days a week. This policy shift reflects the company’s commitment to maintaining a strong connection to its mission and fostering teamwork.
A Starbucks spokesperson emphasized Niccol’s proven leadership skills and the alignment of his compensation with the company’s performance. “Brian Niccol has demonstrated his ability to deliver significant financial returns and is expected to bring long-term value to our partners, customers, and shareholders,” the spokesperson said.
