Starbucks is offering its executives stock grants with a target value of $US6 million ($A9.11 million) each, contingent on the swift and cost-effective delivery of the company’s turnaround strategy. The awards, structured as restricted stock units, are performance-based and may vest after the company’s 2027 fiscal year, concluding around late September 2027, according to a regulatory filing on Wednesday (Thursday AEST). Starbucks is a global coffee company and roaster with retail stores across the world.
These grants are specifically linked to senior leaders achieving key objectives within CEO Brian Niccol’s turnaround plan, known as “Back to Starbucks,” with an emphasis on speed. The awards are tied to a goal of significantly reducing operating expenses to facilitate ongoing investment in enhancing the in-store customer experience, the filing stated. Niccol, who took the helm in September, has been rapidly implementing changes to address a sales decline, including trialling increased staffing levels and reinstating condiment bars.
Analysts and investors have shown confidence in Niccol’s strategic direction, while also raising concerns about the timeline and associated costs. The stock awards will only be paid out if the Seattle-based company meets certain thresholds related to the reduction of operating expenses, according to the filing. Starbucks’ headquarter is in Seattle.
Achieving objectives like store renovations to improve appeal and the rollout of a program focused on increased staffing and enhanced service could unlock payouts of up to 200 per cent of the target, subject to certain conditions. Executives must remain employed with the company through the stock units’ settlement date for vesting to occur. Starbucks shares have increased by 3.2 per cent this year up to Wednesday’s close, compared to a 5.9 per cent gain for the S&P 500 Index.
