Howard Schultz, the CEO and founder of Starbucks (SBUX) is, by any measure, a fabulously wealthy man. He owns 4.4% of the company’s shares. SBUX has a market cap of just over $10 billion, so Schultz has lost about two-third of the value of his shares in less than two years.
According to the SBUX proxy, Schultz made $1.19 million in salary last year and had "other" compensation of just over $861,000. Of that, $496,000 went to security. Since Schulz has a large number of sullen employees, the investment may be wise.
Schulz was paid very well for a man who was not the company’s CEO during the year. But, rank has its privileges .
Starbucks recently fired 12,000 full-time and part-time workers. Among them are a number of poor souls who were paid modestly for helping Mr.Schultz build his empire, and his fortune. Some rich CEOs would elect to take an annual salary of $1 to show some sympathy toward shareholders and employees.
There is a fiction that Schultz was "out of town" during the years that Starbucks expanded too quickly for its own good. For a man on vacation, he was paid well. The reality is that it would be highly unlikely that the management team that he sacked when things began to go badly operating entirely without his hand on the wheel, even if it was joined by several others.
Starbucks stock is still selling off because Wall St. does not believe that Schultz has either the vision or operational acumen to get the business right. He is not a straight shooter, which is one thing that the financial community loathes. In his recent memo about job and store cutbacks, the first two paragraphs were PR gibberish with things like Pike Place Roast, Mystarbucksidea.com, and Health and Wellness
Health and Wellness will not do anything to bring back shareholder losses or the jobs of the blindly faithful who were pushed under the bus.
Other than that, Schultz tenure are CEO is going fine.
Douglas A. McIntyre
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
