Starbucks has made a bold move by offering incoming CEO and Chair Brian Niccol a substantial increase in compensation in order to entice him away from his previous position as chief executive at Chipotle Mexican Grill. Niccol is set to officially begin his new role at the coffee giant on September 9th, with the challenging task of revitalizing Starbucks’ flagging sales, enhancing the overall customer experience, and addressing the challenges facing the company’s China business.
In a filing released on Wednesday, Starbucks revealed the details of Niccol’s pay plan, which primarily consists of equity that will vest over time based on specific company performance targets and metrics. If the company achieves its goals in his first year, Niccol’s total pay package could soar to a staggering $116.8 million, including a base salary of $1.6 million annually, the opportunity to earn up to $7.2 million in cash bonuses, and potential annual equity awards of up to $23 million.
As an added incentive for leaving Chipotle, Niccol will receive a $10 million cash bonus and $75 million in equity to compensate for what he is giving up by departing from his previous position. The equity portion of this compensation will vest over a three-year period, contingent upon company performance and Niccol’s tenure within the organization.
Starbucks expressed confidence in Niccol’s leadership abilities, citing his track record of delivering significant financial returns during his time at Chipotle. The company emphasized that Niccol’s compensation is directly tied to Starbucks’ performance and the success of all stakeholders involved, including partners, customers, and shareholders.
Niccol’s pay package at Chipotle far surpassed that of his predecessor, Laxman Narasimhan, with a base salary of $1.3 million and total compensation of $22.5 million. Stock awards and options comprised a large portion of his earnings, in addition to a cash bonus of $5.2 million. Under Niccol’s leadership, Chipotle’s stock skyrocketed by 773%, significantly boosting the overall value of his compensation package.
Unlike his predecessor Narasimhan, who was based in the U.K., Niccol will not be mandated to relocate to Starbucks’ headquarters in Seattle, affording him greater flexibility and convenience in his new role as CEO and Chair.
Starbucks’ decision to offer Brian Niccol a substantial pay increase and attractive one-time incentives underscores the company’s commitment to securing top talent and driving long-term growth and success. Niccol’s proven track record and ambitious goals for Starbucks position him as a key player in the company’s ongoing efforts to revitalize and reinvigorate its brand and offerings.
Leave a Reply