Starbucks CEO's Compensation Is 10K Times a Barista's

In a Few Months, CEO of Starbucks Collected $96M

Since Brian Niccol was hired at Starbucks in September, it's hard to argue his compensation hasn't been grand. A new company securities filing shows that the chief executive and chairman has collected about $96 million, the Wall Street Journal reports, most of which was in bonuses and stock awards as incentives to accept the job. The company said that amount is 10,000 times what Starbucks' median US employee, a part-time barista, made last year: $14,674 in wages and stocks, the company said. Niccol's package breaks down this way:

• Compensation: $61,538 in salary, a $5 million bonus, and $90 million in stock awards. The stocks piece largely is tied to shares he forfeited when he left Chipotle Mexican Grill for Starbucks. Another $5 million bonus is due Niccols in February.
• Expenses: $72,398 for air travel, $143,567 for temporary housing, and almost $700,000 for security modifications to Niccol's home. He lives in California and commutes to Starbucks' Seattle office on a corporate jet, a perk he won in negotiations. The company said he's also traveling to areas where stores most need his intervention.

The filing puts a rough price tag on Starbucks' decision to change bosses last year, Restaurant Business Magazine points out. Laxman Narasimhan, who did not hold the title of chairman, collected $21.5 million to leave, including $14.4 million in stock awards and $5.9 million in other compensation—$4.2 million of which was a severance payment. He's to receive another $4.2 million in cash severance 18 months after his departure date, the filing says. Niccols was given a mandate to make changes in the chain of coffee shops, and he's said he expects to announce job cuts in March, per the Journal.

New Starbucks CEO Makes 10,000 Times the Pay of Workers

Yes, Brian Niccol, the CEO of Starbucks, makes about 10,000 times more than the median Starbucks employee. Niccol's compensation package includes a large portion of stock awards, a sign-on bonus, and other perks.?

The pay for Starbucks CEO Brian Niccol, who formerly was with Chipotle Mexican Grill, is one of the biggest compensation packages in corporate America.

According to his employment letter, new Starbucks CEO Brian Niccol gets a private office about a thousand miles from the company’s Seattle headquarters and a private jet to take him back and forth.

Perhaps the compensation formula that will trouble store workers the most is that Niccol’s compensation is about 10,000 times the median pay of a Starbucks worker. The SEC requires public companies to disclose this every year. The exact ratio will not be posted until Starbucks issues its 2024 proxy. Reuters provided the current ratio estimate.

Starbucks workers are among the lowest paid in America. According to Glassdoor, baristas can make as little as $15 an hour.

One must ask what store employees think about the Niccol pay package. Investors may believe that it will increase the price of the stock, but that does not put money into the pockets of Starbucks’ lowest-paid people. Part of the company’s turnaround is to make stores operate more efficiently.

Some Starbucks workers have started a union, and the company agreed to bargain with them earlier this year. These conversations will become more complicated when the CEO makes so much and many workers make so little.

Unpopular opinion: I personally think Starbucks is overrated.

Good thing I don’t support Starbucks. There drinks are not good and way overpriced.

I think that amount is beyond ridiculous! To earn that kind of salary, he would have to bring in, for the company, at least 10 times that amount over 4 months for it to make sense on the books, and I sure bet he didn't.

Is this payment commensurate with revenue under the reviewed period? Otherwise it's just corporate image laundering.

If they are a publicly traded company, they should be accountable to their shareholders.

But, if you ask me, this doesn't seem logical. Rewards should be measured by performance. It sends the wrong message to reward someone on the basis of a resume. If he purchased the company, then he should be allowed to glean financial benefit as he sees fit, but that is not the case here.

Really, it amazes me how liberally biased companies like Starbucks and Chipotle continue to make it in the marketplace. If they can afford such bonuses, it makes sense why young people continue to complain that dedication to such companies fails to gain them a living wage.

CEOs that completely ruin a company still get multiple millions in pay packages on their way out the door after they've set the company on fire. So no, it's not from anything that they did. It's not for any quality that they bring to the table. This is just how they're ruining everything for everyone else.

Even though he makes more than 10,000 baristas, his first order of business will probably be saying the $20 California wage is too onerous, and for everyone else, benefits are too generous.

Corporate CEOs are paid way, way too much.

The greed in the US has gotten completely out of control.

It's outrageous. A CEO should not make that much while their employees get minimum wage and are treated poorly by corporate and customers. But they can’t pay their worker a fair wage.

Sometimes you have to pay close attention to know the business of a business.

For example, McDonald's is not a fast food business but real estate. Starbucks is not a coffee shop but a bank.

Starbucks may sell over 8 million cups a day, but what actually makes them a bank?

If you go to pay for your coffee, the cashier tells you, "You know you can earn rewards for free coffee if you use the Starbucks app." Then you download the app to start earning rewards.

This is where Starbucks becomes a bank.

Instead of paying with cash or a credit card, you can add money to your Starbucks account, allowing you to pay with the app on your phone.

Over 41% of Starbucks customers keep chunks of money in the app, and by the end of 2019, users collectively kept over $1.5 billion in their accounts. Customers will, of course, exchange the money for coffee at some point, but in the meantime, Starbucks has a $1.5 billion loan.

They can choose to invest the money in stocks, build more stores, or do as they please with the money. Unlike a bank, though, they don't have to follow regulations, and they basically have $1.5 billion with zero interest from their customers; thus Starbucks has more money than 85% of the bank's out there.

Something interesting: here in Southeast Asia, Starbucks has literally no chance of competing with local roasters and even chains, yet it maintains a relatively good place in the market.

For a foreigner, it has one benefit: all the staff are trained to speak English, which has been surprisingly helpful on a few occasions.

For locals, the appeal is entirely based on image: it’s a western chain and therefore part of a fancy rich person aesthetic, despite being worse and more expensive than any local options. and for me If it has 400 calories and whipped cream, its not coffee; it's a milkshake.

Whoever invented the Starbucks marketing is obviously a "genius.". We all line up for the $6 coffee. It’s just a regular coffee with a flavor shot and sugar, which makes the company around 91.6% profit per unit sold. That’s how and why they can have a CEO make unlimited income.

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