When Starbucks Corp. tapped Brian Niccol as chief executive officer in 2024, it cited the “critical need for a transformative leader” in justifying the hire. If performance significantly improves, stock payouts mean the corner-office switch could cost the company $130 million.
That figure includes estimated exit payments to outgoing CEO Laxman Narasimhan as well as so-called “make whole” awards of cash and stock sufficient to entice Niccol to leave his job running Chipotle Mexican Grill Inc. Starbucks deemed the payments “necessary” to recruit Niccol. But some observers balked.
“The price of the transition is staggering,” concluded proxy-advisory firm Glass Lewis, in a February report that criticized the company’s succession planning and urged shareholders to vote against its executive compensation plan. “Shareholders should be critical of the costly nature of a CEO transition.” Bloomberg’s Matthew Boyle reports. (Source: Bloomberg)
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