Starbucks piles whipped cream atop CEO pay problem
Few financial decisions are as vibes-driven as CEO pay. How much is too much is mostly a question of who’s counting and what it’s measured against. Starbucks, for example, is paying new boss Brian Niccol a potential $145 million package that, at first glance, seems like the boardroom equivalent of a venti caramel ribbon crunch Frappuccino.
Niccol faces the difficult job of turning around a $100 billion coffee chain stuck in a sales slump. Unsurprisingly, his compensation, opens new tab is generous. It starts with an $8.8 million shot of cash if he and the company exceed specific performance targets. He also gets $85 million just for joining, mostly replacing stock awards he surrenders by quitting as CEO of Chipotle Mexican Grill.
Then there’s a share-based bonus: $23 million annually if he hits his targets. If he does really well, Starbucks could triple 60% of that amount, taking the sum to $51 million, assuming the awards are structured like this year’s long-term executive bonuses, which are amplified if goals like sustainability and talent retention are met, based on the company’s annual proxy filing. His replacement stock award could also multiply in certain circumstances.
Would such a windfall really be so sickening? A barista might say so. The sum is roughly 10,000 times more than the median Starbucks employee earns. Unlike most of his subordinates, Niccol also gets to work from a remote office in sunny Newport Beach, California.