Brian Niccol could make at least $113 million as the new CEO of Starbucks, even if he works remotely from a Southern California office 1,000 miles away from the coffee giant’s Seattle headquarters.
Nicol, who was poached this week from his position as chief executive officer at Chipotle Mexican Grill Inc., will be allowed to work in Newport Beach, California, an upscale coastal area south of Los Angeles, the company said in a securities filing.
Meanwhile, the 49-year-old executive will be paid a base salary of $1.6 million plus an annual bonus that could be two to four times that amount, according to company filings with the Securities and Exchange Commission.
Starbucks also awarded Nicol a $10 million signing-on bonus and $23 million in annual stock awards to be distributed starting next year, according to the filing.
Nicol will also receive a $75 million stock grant over three years as compensation for his departure from Chipotle, where he made $22.5 million last year.
According to the SEC filing, if Nicol decides to relocate to Seattle, Starbucks will reimburse him for relocation expenses and cover up to three months of temporary housing costs.
Nicole, who has been credited with helping turn Chipotle around, will also be provided with chauffeur services at the company’s expense if he relocates.
His first day as CEO will be on September 9, according to the filing.
Last March, then-CEO Howard Schultz called for Starbucks employees to come into the office at least three days a week, a move that was met with protests from staff across the company.
“Brian Niccol has delivered significant financial returns over the years and has proven himself to be one of the most effective leaders in our industry,” Starbucks said in a statement.
“His compensation at Starbucks is directly tied to the company’s performance and the shared success of all stakeholders.”
Starbucks shares soared 25% on Monday after the company announced Nicol’s hiring, adding $20 billion to the company’s market capitalization.
Starbucks Chief Financial Officer Rachel Ruggeri, who will serve as interim CEO until Nicol permanently takes over next month, cashed out $341,000 in company stock upon hearing of the changes, according to an SEC filing.
Nicol will succeed Lakshman Narasimhan, who took over as CEO in March 2023 with a view to “reforming” the world’s largest coffee chain but served in the role for just a year and a half.
Since then, the stock has continued to fall, losing nearly a quarter of its value.
Nicol will inherit a company that is under pressure from activist investor Elliott Investment Management to turn things around.
Starbucks is also being hampered by increased competition and weak demand from U.S. and Chinese consumers.
Nicol’s appointment is a big win for Starbucks: Chipotle’s annual sales have soared since she joined the company in 2018, and its stock price has more than tripled over the past five years.
Starbucks had been under pressure from Elliott, which had a $2 billion stake in the company.
The hedge fund had recommended Starbucks expand its board of directors and appoint Elliott executive Jesse Cohn to the board, but had not called for replacing the CEO.
A source familiar with Starbucks told Reuters that Schultz had been pressuring directors to resolve the company’s problems without giving activist investors seats on the board.
Chipotle announced that its board of directors has appointed Chief Operating Officer Scott Boatright as interim CEO.
Nicole, an engineering major from the University of Miami, joined Chipotle in 2018 from Taco Bell and helped the company overcome outbreaks of Salmonella and E. coli at several restaurants.
With post wire
