After being confirmed as CEO, the stock price skyrocketed by 20%, and Starbucks' new CEO Brian Niccol seems to be the "savior" that investors have been waiting for. And this can also be seen from Starbucks' latest announced compensation conditions.
Starbucks announced on Wednesday that it will provide the 50 year old new CEO with a total compensation of approximately $113 million, including a signing bonus of $10 million, $75 million in equity, and an annual long-term equity award of $23 million starting from fiscal year 2025.
In addition, Niccol will receive an annual base salary of $1.6 million and cash bonuses ranging from $3.6 million to $7.2 million, the latter of which is linked to Niccol's performance.
A Starbucks spokesperson stated that Niccol has proven itself to be one of the most capable leaders in the food and beverage industry, creating significant financial returns for the companies it has served over the years. And his salary at Starbucks will be directly linked to the company's performance and the collective success of all stakeholders. Starbucks firmly believes that he will create long-term and continuous value.
Generous conditions
Niccol previously worked for Chipotle, a Mexican tortilla brand. During his six-year tenure at Chipotle, the company's profits increased nearly sevenfold and its stock price rose 800%. This has made Starbucks, whose stock price has fallen by over 20% in the past year, envious.
For this reason, Starbucks is even willing to give up its strict regulations on remote work. After the pandemic, Starbucks founder Howard Schultz briefly returned to take over the company. He required employees to work in the office at least three days a week and stated that remote work was not very effective.
However, Niccol, who was heavily hired, was allowed to work remotely for a period of time. He doesn't need to immediately move to Seattle, where Starbucks headquarters is located, he just needs to go to the company headquarters when necessary. Niccol will continue to live in Newport Beach, California, where Chipotle headquarters is located in the short term.
If Niccol travels to Seattle, Starbucks will also cover all temporary housing expenses during his stay and arrange for a private driver to pick him up. At the same time, Starbucks will also establish a small remote work studio in Newport Beach for Niccol's use.
Even more exaggeratedly, Starbucks claimed that Niccol could use Starbucks' plane to travel between his home and Starbucks headquarters in Seattle, as the headquarters would also reserve a main office for him, which is enough to prove Starbucks' "thoughtfulness" towards Niccol.
From any perspective, the conditions offered by Starbucks far exceed Niccol's treatment at Chipotle. Last year, Niccol's total compensation at Chipotle was approximately $22.5 million, with stock rewards and options accounting for the majority.
Of course, this compensation far exceeds the salary of Niccol's predecessor Laxman Narasimhan. The document shows that Narasimhan's total salary value for the 2023 fiscal year is approximately $14.6 million, and Narasimhan, who lives in the UK, was required to work on-site in Seattle as soon as he took office.