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Starbucks New CEO Makes $96 Million

Douglas A. McIntyre

Published: January 25, 2025 8:15 am

Last Updated: January 27, 2025 10:32 am

he Starbucks Corp. (NASDAQ: SBUX) CEO Brian Niccol has only been with the company since September 9 of last year. Since the coffee shop operator released its most recent quarterly earnings report on October 22, there is absolutely no way to measure his effectiveness. The only comment he made at the time was to acknowledge Starbucks problems and offer vague solutions. “Our fourth quarter performance makes it clear that we need to fundamentally change our strategy so we can get back to grow and that’s exactly what we are doing with our ‘Back to Starbucks’ plan.” Despite his very short tenure, Starbucks announced his first pay package at $96 million.

Granted, most of his pay package was for the value of the stock and options he held at Chipotle Mexican Grill Inc. (NYSE: GMG), where he had been CEO previous to his move to Starbucks. It is an acknowledgment of how important it was to the Starbucks board to get him as the company’s leader. The board sweetened his deal by offering him the opportunity to work part-time from where he lived in Newport Beach, Calif., to Starbucks Seattle headquarters. This required the company to provide him with a private jet. The arrangement is highly unusual.

Niccol has a long way to go before he can justify his package, at least to inventors. Starbucks stock rallied when he joined, but has been flat since then. Financial results will need to surge. In the most recently reported quarter, comparable store sales dropped 7%. Revenue declined 3% to $9.1 billion. Earnings fell 24% to $0.80 per share. Starbucks posted troubling losses in its two largest markets. Comparable store sales dropped 6% in the United States and 14% in China.

So far, Niccol has focused on repairing the U.S. operations. He released a letter to customers and investors in which he listed what Starbucks turned around would look like. He said store workers needed to be “empowered” to offer customers better service, and “reestablish” Starbucks as a “community coffee house.”

Niccol released another document about his plans recently. It made clear he planned to cut the number of Starbucks employees in March. Also said his goal was to reduce the time customers have to wait to get drinks and food at its locations down to four minutes. He summed up his strategy by writing Starbucks has to become, “a welcoming coffeehouse where people gather and where we serve the finest coffee, handcrafted by our skilled baristas.”

He has a lot of ground to cover to get a big paycheck again next year.

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