Starbucks recently announced a significant pay raise and one-time awards for incoming CEO and Chair Brian Niccol, in an attempt to entice him away from his previous position at Chipotle Mexican Grill. This move comes at a crucial time for Starbucks, as Niccol will be taking over the reins on September 9th and will be faced with the daunting task of reviving the company’s dwindling sales, enhancing the customer experience in stores, and addressing the challenges in its China business.
The details of Niccol’s compensation package were disclosed in a recent filing by Starbucks. A substantial portion of his pay is in the form of equity that will vest over time, depending on the company’s performance and various metrics. In his first year alone, Niccol’s total pay could reach a staggering $116.8 million if all targets are met and the equity fully vests. This includes a base salary of $1.6 million per year, with the potential to earn an additional $7.2 million in cash and up to $23 million in annual equity awards.
Prior to joining Starbucks, Niccol served as the CEO of Chipotle, where he had a base salary of $1.3 million and a total compensation of $22.5 million. The majority of his earnings at Chipotle came from stock awards and options, supplemented by a cash bonus of $5.2 million. During his tenure, the stock price of Chipotle surged by 773%, significantly boosting the overall value of his compensation package.
Niccol’s pay package at Starbucks is markedly more generous than that of his predecessor, Laxman Narasimhan, who was recently ousted. Narasimhan had a base salary of $1.3 million, with the possibility of cash bonuses up to $5.85 million and equity awards of $13.6 million. In contrast, Niccol’s compensation is considerably higher, indicating the value that Starbucks places on his leadership and expertise.
Starbucks has offered Brian Niccol a substantial pay raise and attractive incentives to secure his services as the new CEO and Chair. The company’s decision to reward Niccol handsomely reflects its confidence in his ability to deliver positive results and drive long-term value for stakeholders. While the size of Niccol’s compensation package may raise eyebrows, the company is betting on his proven track record and leadership skills to lead Starbucks into a new era of growth and success.