Starbucks CEO could make $100M while working remotely

When Starbucks named Brian Niccol its new chairman and CEO, the company hoped he could revive fading sales and re-establish the coffee giant as a destination where customers are willing to pay premium prices. However, employees probably won’t see the top guy around the headquarters often because he doesn’t plan on moving to Seattle, at least at first.

“I am excited to join Starbucks and grateful for the opportunity to help steward this incredible company alongside hundreds of thousands of devoted partners,” Niccol said on the day he was hired.

However, the former head of Chipotle Mexican Grill will not need to move to the company’s Seattle headquarters when he begins work on Sept. 9. Instead, he will commute to the home office and travel as necessary, according to a company filing on Wednesday reported by Bloomberg. Niccol will stay in Newport Beach, California, Chipotle headquarters, and have a remote office approximately 1,000 miles from Seattle.

Background: Starbucks CEO replaced by Brian Niccol, a fixer who revived Chipotle when the chain was in distress

Most Starbucks corporate employees have to be in the office three days a week.

“I don’t think that as a new CEO, I would necessarily support the idea of continuing a policy that I am not adhering to because I do think that corporations take the message and take the culture from the top,” Mike Lewis, fill-in host on KIRO Newsradio’s “Gee & Ursula,” said.

The option to work remotely is becoming more common for CEOs and was a crucial part of Starbucks’s recruitment package for Niccol. He could make well in excess of $100 million in his first year with the company under an incentive-laden contract, according to a financial filing Wednesday. The cash bonus and the stock award are meant to replace the compensation he’s forfeiting by leaving Chipotle.

“I also really don’t understand why the wealthiest people in our corporate structure also get the most perks,” Lewis said. “It seems odd that you would provide a car to somebody with millions and millions of dollars in comp, but the richer you are, the more free stuff you get.”

The last two quarters have shown declining profits for Starbucks. However, when executives announced Niccol was joining the company, shares rose 24% ending the day at $95.90. After Niccol started at Chipotle in 2018, the company’s annual sales skyrocketed and its stock has more than tripled within the last five years.

“At the end of the day, what he’s going to get judged on is that stock price, and while he was Chipotle, he drove the stock up 800% with a sevenfold increase in profits,” KIRO’s Andrew Lanier explained. “So, maybe he can do that here.”

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Lewis also commented on the stock value.

“Linking Niccol’s compensation to stock value means that you’re going to make decisions, sometimes good decisions, and sometimes bad decisions, short-term decisions, because your annual compensation,” Lewis said. “Your money is essentially tied up in that stock value. So you do a couple of layoffs, you spike the stock value, you sell a bunch of stock.”

Niccol will succeed Laxman Narasimhan, who is stepping down immediately from the position that he has held since 2022, with CFO Rachel Ruggeri serving as interim CEO.

It’s not immediately clear how Niccol’s arrival will impact the ongoing unionization effort at Starbucks. Schultz opposed unionization, but under Narasimhan the company pivoted, saying it would restart labor talks with the aim of reaching contract agreements this year. Workers at more than 475 U.S. Starbucks stores have voted to unionize since 2021.

Contributing: Dee-Ann Durbin, The Associated Press

Bill Kaczaraba is a content editor at MyNorthwest. You can read his stories here. Follow Bill on X, formerly known as Twitter, here and email him here.