Brian Niccol has not yet donned the costume of CEO of Starbucks and he already finds himself embroiled in a controversy that is gaining ground on social networks and in the press. The controversy concerns the salary and in-kind benefits deemed excessive granted to the former boss of the restaurant chain Chipotle Mexican Grill.
A juicy contract that could earn Brian Niccol the tidy sum of $113 million in just one year of work. This remuneration is four times higher than that of his predecessor, Laxman Narasimhan, who received $28 million in 2022. And 5,300 times higher than the median annual salary of Starbucks France employees, which is around €21,300.
The previous Chipotle
Announced on Tuesday, August 13, the appointment of the former CEO of Taco Bell quickly made headlines. Initially, it was the performances achieved by Chipotle under his presidency that were the most commented on. And for good reason, before his arrival at the helm of Chipotle in 2018, the restaurant company was mired in what the American daily newspaper Financial Times described as “a public relations disaster”: hundreds of customers fell ill after eating its food, and Chipotle was fined $25 million.
Then came Brian Niccol, who managed to restore the company’s reputation, increase its profits sevenfold, and increase its share price by more than 800%. All this while increasing the salary scale and granting numerous social benefits to employees. A record that made the fifty-year-old attractive to struggling multinationals in the food sector. Our colleagues at Forbes have notably detected several similarities between the situations of Chipotle in 2018 and Starbucks in 2024.
Salary, bonuses… Brian Niccol’s advantages
First, sales fell by an average of 4% per coffee shop Starbucks in the first quarter of this year. In addition, in some countries, footfall has fallen significantly. This is particularly the case in China, where its 7,306 stores experienced an 11% drop in revenue in the last quarter, and an even more pronounced 14% decline in comparable sales. Thus, for several months the American giant has been looking for a strategy to improve its economic health. Which comes at a price.
And Brian Niccol’s is at least high. The day after his appointment was announced, THE Financial Times reveals the details of the contract signed between the Californian and the Washington company. The annual salary of the new CEO of Starbucks, who will take office on September 9, has for example been set at 1.6 million dollars, and will be accompanied by a 10 million dollar arrival bonus. In addition, 75 million in the form of shares will also be paid to him “over time”. In this way, the Financial Timesto “compensate for unvested bonuses and stock upon leaving Chipotle.”
Historic compensation
But that’s not all, the now nicknamed “$113 million man” could receive in addition to his annual salary a bonus of $3.6 million based on his performance. A bonus that is added to “a long-term stock grant” worth $23 million annually, paid over several years. And to many benefits in kind. Among them a private jet allowing him to travel back and forth between his Californian home and the Starbucks headquarters based in Seattle.
Ben Silverman, vice president of research at analyst firm Verity, said: “The Starbucks board’s willingness to pay such a high price is a testament to the confidence they have in Niccol.” He warned, speaking to the Financial Times : “He will have to prove that he is worth it, however, because his annual compensation is around 75% higher than that of his predecessor.”