Fourth Starbucks CEO in three years gets €100 million work-from-home package

Starbucks has announced that Brian Niccol, currently CEO of Chipotle, will take over as Chairman and CEO starting 9th September 2024, with a pay packet estimated to be worth a total of $113 million (€102 million).

The incoming CEO, who has a stellar track record in managing turnarounds at both Chipotle and Taco Bell before that, will also be able to work from his home in south California – a similar arrangement to the one he was able to negotiate for his current role.

This leadership change follows the abrupt departure of Laxman Narasimhan, who stepped down from his role as CEO and board member with immediate effect. Rachel Ruggeri, Starbucks’ Chief Financial Officer, will serve as interim CEO until Mr Niccol assumes his position.

Mr Niccol’s appointment is seen as a strategic move by Starbucks to revitalise the company amidst challenges such as declining sales in its core North American market and rising competition.

Under Mr Niccol’s leadership at Chipotle since 2018, the company experienced significant growth, with revenues nearly doubling, profits increasing sevenfold, and stock prices surging by almost 800 per cent.

His success at Chipotle was attributed to a focus on people and culture, menu innovation, operational excellence, and digital transformation – achievements that make him a highly anticipated leader for Starbucks, which is currently navigating a pivotal moment in its history.

Mr Niccol’s approach to leadership has been praised for its emphasis on culture and employee engagement, areas where Starbucks has faced challenges, particularly with ongoing unionisation efforts by its staff.

At Chipotle, Mr Niccol successfully managed similar challenges and is expected to bring a collaborative approach to Starbucks. Investors will also be anticipating a repeat of his success in revitalising brands, as he achieved with the introduction of popular menu items and creative marketing campaigns at Taco Bell and Chipotle.

Howard Schultz, Starbucks’ Founder, Chairman Emeritus, and three-time ‘boomerang CEO’, expressed confidence in Mr Niccol’s ability to lead the company, describing him as “the leader Starbucks needs at this crucial juncture”.

The Starbucks Founder’s words are all the more significant after an open letter sharply criticising the firm’s management earlier this year.

Mr Niccol himself expressed excitement about joining Starbucks, emphasising his admiration for the company’s brand, culture, and mission. He highlighted his commitment to enhancing the Starbucks experience for both customers and partners while staying true to the company’s core values.

The appointment was welcomed by markets, with Starbucks achieving its best-ever trading day with a 24 per cent jump in its share price. Over the last five years, it had lost 20 per cent of its value, even as the benchmark S&P index rose by 80 per cent.

The long decline in Starbucks’ share price led to activist shareholder action by private equity firm Elliott Investment Management, which holds a $2 billion stake in the company and had been gunning for Mr Narasimhan’s removal.