Starbucks has recently made headlines by offering their incoming CEO and Chair, Brian Niccol, an incredibly lucrative pay package to entice him away from his previous position at Chipotle Mexican Grill. Niccol is set to take over the reins at Starbucks on September 9th, and his responsibilities will include reviving the company’s sales, enhancing the customer experience, and addressing the struggling China operations.
Niccol’s compensation package, as disclosed by Starbucks in a recent filing, is quite impressive. The majority of his pay is in the form of equity that will vest over time based on the company’s performance and other metrics. In his first year, if Starbucks meets its targets, Niccol could earn up to a staggering $116.8 million. This includes a base salary of $1.6 million annually, with the potential to earn an additional $7.2 million in cash and equity awards worth up to $23 million.
Prior to joining Starbucks, Niccol served as CEO of Chipotle, where he earned a base salary of $1.3 million and had a total compensation of $22.5 million in the previous year. Most of his earnings at Chipotle came from stock awards and options, in addition to a cash bonus of $5.2 million. Niccol’s compensation package at Starbucks is significantly more generous than that of his predecessor at Chipotle, Laxman Narasimhan, whose base salary, cash bonuses, and equity awards were considerably lower.
Performance and Value
Starbucks has justified Niccol’s compensation by emphasizing his track record of delivering significant financial returns and value to shareholders. The company believes that his pay should be directly linked to Starbucks’ performance and the success of all stakeholders involved. Furthermore, Starbucks expressed confidence in Niccol’s ability to drive long-term value for partners, customers, and shareholders.
While Brian Niccol’s compensation package at Starbucks is undeniably substantial, it reflects the company’s confidence in his leadership abilities and potential to drive financial success. The emphasis on performance-based compensation aligns with Starbucks’ commitment to delivering value to all stakeholders. Only time will tell if Niccol’s appointment as CEO will lead to the desired outcomes for the embattled coffee chain.