Starbucks CEO Narasimhan plans to ‘reinvent’ the company
Mar 24, 2023, 5:22 PM
Outgoing Starbucks CEO Howard Shultz looks on as Laxman Narasimhan takes over. (Getty Images)
(Getty Images)
Starbucks’ new CEO, Laxman Narasimhan, held his first shareholder meeting Thursday and offered proposals to reinvent the company.
“We strive to be a different kind of company, and that is unchanged. But we now operate in a different kind of world,” Narasimhan said.
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Starbucks announced a $450 million strategy to grow the number of stores and focus on new consumer behavior. The company invested more than $1 billion in wages and training, bringing the average hourly pay at Starbucks to nearly $17.50 per hour nationally and with a range of $15 to $23 per hour.
Narasimhan took over for Howard Shultz just a week ago. He said he would work as a barista in a store for a half day each month.
“We have limitless potential, but we need to address what limits us. Our performance is strong, but our health needs to be stronger,” Narasimhan said.
Starbucks reports that continued investment in partner wages and store operations will be priorities.
Narasimhan’s proposals included a CEO succession plan and an assessment of the company’s union practices. He also recommended voting against all shareholder-introduced proposals.
The company saw a 47% stock price increase since the Q2 FY22 earnings call through the Q1 FY23 earnings call. It also had a market cap growth of approximately $40 billion. The company also delivered 50% in Total Shareholder Return in this time period, far outpacing the S&P 500.
The company was also named the most dominant restaurant brand with McDonald’s by Brand Finance.
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Narasimhan avoided addressing the company’s union troubles which led to protests before the meeting. Starbucks Workers United has accused Starbucks of hundreds of unfair labor practices. Charges were filed with the National Labor Relations Board both by the union and Starbucks.
The company said it was the union that had failed to negotiate in good faith.
