Starbucks (NASDAQ: SBUX) may begin to pay US employees in stock if its plans in the UK are any indication. Starbucks shares have gone from $8 in March 2009 to $33 recently. The company sharply cuts costs and 12,000 workers as the recession wore on. Starbucks sales have increased substantially in the last year but it still benefits from its lower cost base.
The most immediate concern Starbucks faces are the increases in the prices of sugar and coffee which has hit record levels in the last four months.
According to the Observer:
The Seattle-based firm’s 6,700 UK staff are eligible for the shares award, which replaces a more complicated option scheme that was seen to have deterred workers of its shopworkers from taking part.
The “restricted stock units” will be handed out in January, with 50% of the award vesting at the end of the first year and the remainder released in chunks of 25% over the next two years
There is no reason to believe that the same program will not be used in the US to retain its relatively low-paid workers over a two-year period.
Douglas A. McIntyre
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