Starbucks paid millions to executives to work just part of the year in 2022. But its interim CEO who steered the company's overhaul received $1.
Interim CEO Howard Schultz was paid a symbolic salary of $1 to come in and overhaul Starbucks’ operations, according to federal securities filings.
His replacement, however, was given $8.8 million in incentives to take the position. Laxman Narasimhan, who became “CEO elect” in October and will take over the full-time job later this year, was given a $1.6 million sign-on bonus plus $7.2 million in stock awards.
Starbucks’ complex CEO change last year resulted in millions paid for executives who were only with the company part of the year. Kevin Johnson, who retired as CEO in March, was paid $16.7 million in salary and stock awards.
Rachel Gonzalez, the general counsel who followed Johnson out the door following Schultz’s arrival, was given $7.6 million upon her departure. That $7.6 million included $2.3 million in severance and another $4.8 million in cash. Gonzalez' total compensation was $11.7 million in the 2022 fiscal year, which ended Oct. 2.
Starbucks is traditionally one of the more lucrative jobs in the restaurant industry, which is to be expected given its size as the world’s second-largest restaurant chain and one of the country’s most well-known brands. Johnson was paid $20.4 million in 2021, for instance, which made him one of the industry’s top-paid executives.
Last year proved particularly complex for the Seattle-based coffee giant, given Schultz’s return coupled with the departure of several top executives and the rearrangement of its corporate functions in subsequent months.
Schultz, for his part, received only a symbolic salary and was not paid any stock options or other awards, according to SEC filings. But he was paid $374,557 in “other compensation,” most of which involved the use of the company plane—presumably as part of his tour of Starbucks locations in the months after his arrival.
Narasimhan was named Schultz’s successor in September. The former Reckitt CEO is spending several months working under Schultz as CEO elect until he officially takes over the full-time job April 1, one year after Schultz’s return.
Sign-on bonuses are certainly common for these kinds of positions and boards of directors will traditionally give stock awards to new CEOs and other top executives as an incentive to drive the share price higher.
John Culver, who stepped aside as Starbucks’ chief operating officer last year and served as an advisor to Schultz through the end of 2022, was paid $7.1 million last year.
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