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Incoming Starbucks CEO could make well in excess of US$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 of the coffee chain, 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 September 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 food-borne 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 US Securities and Exchange Commission late Wednesday, Starbucks said that the 50-year-old Niccol will receive a cash signing bonus of US$10 million and equity awards totalling US$75 million once he joins the company. 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 US$100 million in his first year.
Niccol’s annual base salary will be US$1.6 million. He’ll also have an annual cash incentive opportunity at a target of 225 per cent of his base salary and a maximum of 450 per cent of base salary. If he achieves the maximum incentive, it would be about US$8.8 million.
Starting in fiscal 2025, Niccol will be eligible to receive annual equity awards worth up to US$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.
AP
English (US) ·