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Starbucks has awarded its new chief executive, Brian Niccol, cash and stock worth a potential $100 million, one of the largest hiring packages in U.S. corporate history and four times larger than the hiring deal offered to his ousted predecessor.
If paid in full, the package, revealed in a regulatory filing on Wednesday, would make Nicholas One of the highest-paid CEOs in the United States, the contract would be worth $113 million if he meets the goals Starbucks has set for him.
Starbucks named Niccol as its fourth boss in less than three years on Tuesday after the surprise ouster of CEO Laxman Narasimhan, the former chief executive of Reckitt Benckiser.
Niccol will join Starbucks next month from burrito chain Chipotle Mexican Grill, where he led a turnaround of its business and reputation following a series of food safety issues since 2018. Chipotle’s stock has gained nearly 800 percent during his tenure.
For starters, Niccol will receive a $10 million cash bonus up front and another $75 million in equity grants designed to be paid out over time, to compensate him for the bonuses and unvested stock he left behind at Chipotle.
Annually, Niccol will earn a salary of $1.6 million plus a target cash bonus of approximately $3.6 million, depending on Starbucks’ performance. This is in addition to a long-term equity grant with an annual target value of $23 million, to be paid out over several years.
“The board’s willingness to pay such a high price is a testament to the faith they have in Niccol,” said Ben Silverman, vice president of research at Verity, a research firm. “But he will have to prove he is worth it because his annual compensation is about 75 percent higher than his predecessor’s.”
Last year, Niccol’s total salary at Chipotle It was 22.5 million dollarswhile the value of its unrealized gains from prior equity incentives was more than $82 million, according to a regulatory filing.
Starbucks’ package comes with an unusual perk: Niccol would not have to move to its Seattle headquarters, according to the document. Instead, the company will set up a “small remote office” in Newport Beach, California, the city to which Niccol had moved. excited Chipotle’s Denver headquarters, plus pay for an attendant of your choice.
Only five other executives received pay packages worth more than $100 million in 2023, according to a Equilar June Reporta payment data company, one of the largest U.S. companies by revenue. Such deals are particularly rare outside the financial and technology sectors.
Niccol’s target annual compensation would be 83 percent higher than the average target for other S&P 500 restaurant groups, including Chipotle, Darden, Yum Brands and McDonald’s, said Courtney Yu, director of research at Equilar.
“Brian Niccol has proven to be one of the most effective leaders in our industry, generating significant financial returns over many years,” Starbucks said, adding that his compensation was “directly tied to the performance of the company and the shared success of all of our stakeholders.”
When Starbucks hired Narasimhan from UK-based consumer products group Reckitt in 2022, they offered him a position package valued at more than $28 million. This included a base salary of $1.3 million, annual cash bonuses worth up to $2.6 million and annual stock awards with a target value of $13.6 million.
In addition, Starbucks agreed to pay Narasimhan a signing bonus of $1.6 million in cash and $9.25 million in equity to compensate him for the incentives he forwent upon leaving Reckitt.
Starbucks did not detail the terms of Narasimhan’s severance package.