The new Starbucks CEO could earn well over $100 million in his first year under a performance-based contract and would not have to move from his home in California to Seattle, the headquarters of the global coffee giant.
Starbucks announced on Tuesday that Niccol would become its chairman and CEOHe succeeds Laxman Narasimhan, who abruptly resigned after just over a year as the company’s top executive. Niccol will become chairman and CEO of Starbucks on September 9.
Niccol is one of the most sought-after business leaders after a successful track record of turning around companies that had gotten into trouble, including Taco Bell and most recently Chipotle.
Niccol took over the top job at the Californian chain in 2018, when Chipotle was acquired by a Series of outbreaks of foodborne illnesses which had made more than 1,000 of its customers sick over the course of several years.
Chipotle’s revenue has nearly doubled since he took office after he drove product innovation while introducing employee benefits, such as a program that Tuition fees for employees Costs at certain schools.
Starbucks relies on Niccol’s revival dwindling sales and to re-establish the company as a point of contact where customers are willing to pay a premium price for the company’s products.
In a filing with the U.S. Securities and Exchange Commission on Wednesday, Starbucks said Niccol, 50, will receive a $10 million cash bonus and a total of $75 million in stock awards when he joins the company. The stock portion of his compensation package will vest over time and is contingent on the meeting of performance goals.
If Starbucks meets these and other goals, his salary could easily exceed $100 million in the first year.
Niccol’s annual base salary will be $1.6 million. He also has the opportunity to receive a cash bonus annually that can be 225% of his base salary and up to a maximum of 450% of his base salary. If he reaches the maximum bonus, that would be approximately $8.8 million.
Beginning in fiscal year 2025, Niccol may receive annual stock awards valued at up to $23 million.
Perhaps equally notable is that Starbucks is not requiring Niccol to move to Starbucks headquarters in Seattle, but says he can stay in Newport Beach, California, where he currently lives and where Chipotle is based.
According to a regulatory filing, Starbucks will help Niccol establish a small branch in Newport Beach and the company will hire an assistant for Niccol at that location.
Niccol will commute to Seattle as needed and will also undertake any other business travel deemed necessary.
Rachel Ruggeri, Starbucks’ chief financial officer, will serve as interim CEO until Niccol arrives in early September.
Starbucks shares rose slightly before the stock market opened on Thursday.