What is Starbucks giving its new CEO? $113 million plus option to work remotely

Starbucks has announced a substantial compensation package for its new CEO, Brian Niccol, reflecting the high stakes involved in his hiring. Niccol will receive approximately $113 million in total compensation, which 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. This package is supplemented by a $1.6 million annual salary and a performance-based cash bonus ranging from $3.6 million to $7.2 million.

Niccol replaces Laxman Narasimhan, who stepped down after spending a little more than a year in Starbucks’ top job.

Niccol will become Starbucks’ chairman and CEO on September 9. Until then, Starbucks Chief Financial Officer Rachel Ruggeri be the interim CEO.

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Relocation & perks

In a nod to Niccol’s current residence in Newport Beach, California, Starbucks has agreed to significant perks to ease his transition. Niccol will not be required to relocate to Starbucks’ Seattle headquarters but will commute as needed.

The company will cover the cost of temporary housing and provide a personal chauffeur in Seattle until he secures 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. He will also benefit from Starbucks’ executive physical program but will be restricted from trading in coffee and dairy futures.

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Niccol’s track record & expectations

Starbucks’ decision to offer such an impressive package is largely influenced by Niccol’s successful tenure at Chipotle Mexican Grill, where he led a remarkable 800 per cent increase in stock price and a nearly sevenfold rise in profits over six years.

Starbucks is hopeful that Niccol will replicate this success and drive significant growth for the coffee giant, which recently faced a challenging period under former CEO Laxman Narasimhan, including a 23.9 per cent drop in share price and a $32 billion market cap loss.

Company’s stance on remote work

Starbucks has adjusted its remote work policies since the pandemic. Founder Howard Schultz emphasised the importance of in-office collaboration and mandated 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.

Company statement

A Starbucks spokesperson highlighted 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.