Starbucks’ new CEO could earn more than $100 million in his first year at the company thanks to a bonus-laden contract and won’t have to relocate from his hometown of California to Seattle, home of the global coffee giant.
Starbucks announced Tuesday that Niccol would become chairman and CEOwho took over from Laxman Narasimhan, who abruptly stepped down after just over a year as the company’s top executive. Niccol will become Starbucks chairman and CEO on September 9.
Niccol is one of the most sought-after executives in business, having built a track record of successfully turning around struggling companies, including Taco Bell and, most recently, Chipotle.
Niccol took the top job at the California chain in 2018 when Chipotle was struggling due to a series of outbreaks of foodborne illnesses who had made more than 1,000 of her customers sick over the course of several years.
Chipotle’s revenue has nearly doubled since his arrival, after he boosted product innovation while also instituting employee benefits, including a program that pays workers tuition fees of employees costs at certain schools.
Starbucks counts on Niccol to breathe new life into declining sales and re-establish the company as a destination where customers are willing to pay a premium for its products.
In a filing with the Securities and Exchange Commission on Wednesday night, Starbucks said Niccol, 50, will receive a $10 million cash signing bonus and stock awards totaling $75 million upon joining the company. The stock component of his compensation package will vest over time and is contingent on meeting performance targets.
If Starbucks achieves these and other goals, its salary could easily exceed $100 million in its first year.
Niccol’s annual base salary will be $1.6 million. He will also have an annual cash incentive opportunity with a target of 225% of his base salary and a maximum of 450% of his base salary. If he achieves the maximum incentive, it would be approximately $8.8 million.
Beginning in fiscal 2025, Niccol will be eligible for annual stock awards worth up to $23 million.
Perhaps just as notable, Starbucks is not requiring Niccol to move to its Seattle headquarters. He is allowed to remain in Newport Beach, California, where he currently lives and where Chipotle is located.
According to a regulatory filing, Starbucks, with Niccol’s help, will set up a small remote office in Newport Beach and will hire an assistant for Niccol at that location.
Niccol travels to Seattle as needed and also arranges other business travel as deemed necessary.
Starbucks CFO Rachel Ruggeri will serve as interim CEO until Niccol arrives in early September.
Starbucks shares rose slightly ahead of market open on Thursday.