Starbucks’ interim CEO cashed out more than $341,000 in Chipotle stock following news that the company had named Chipotle CEO Brian Niccol to replace embattled President Lakshman Narasimhan, according to securities filings.
Rachel Ruggeri, the Seattle-based coffee chain’s chief financial officer and interim CEO until Nicol officially takes over on Sept. 9, sold 3,750 shares, realizing a gain of $341,850, according to a filing with the Securities and Exchange Commission.
Ruggeri, who was awarded the stock as part of an executive compensation program over the past two years, sold the shares as part of a so-called 10b5-1 plan, which allows company insiders to avoid insider trading allegations by making pre-arranged transactions.
After news broke that Starbucks had hired Nicol, a respected turnaround guru also known for his successes at Taco Bell and Pizza Hut, Starbucks shares rose 24.5 percent on Tuesday to close at $95.90.
A Starbucks spokesman told The Washington Post that the price increase “triggered a price threshold” in Ruggeri’s plan.
The plan is overseen by a broker and is usually run on a regular basis, and can also set price benchmarks for when shares should be sold.
“Many of our executives whose compensation is tied to company performance have similar plans,” the Starbucks spokesperson added.
As part of the program, Ruggeri sold 3,750 shares on May 22, making $300,000, according to the filing.
“It appears that she and her financial planner had been planning for a variety of contingencies, one of which proved extremely beneficial today,” said Randy Katz, a securities lawyer with the law firm Clark Hill LLP.
No other transactions by the executive were reported Tuesday. In fact, her transactions were filed with the SEC before the company’s management shakeup was posted on the SEC’s website.
“It’s fair to assume that other Starbucks executives have not benefited from the stock price appreciation to the same extent as she has,” Katz added.
Shares of Starbucks, the world’s largest coffee company by store count and sales, took a hit in April after the company reported its first same-store sales decline in nearly three years.
Howard Schultz, who built the chain into a global giant in the 1990s, launched a blistering attack on Narasimhan’s management style on LinkedIn in May.
Since taking over as president last April, Narasimhan has been forced to cut Starbucks’ profit forecasts multiple times.
Starbucks has also been engaged in an extensive unionization campaign since 2021.
