Starbucks has recently made a bold move by appointing Brian Niccol, the former CEO of Chipotle Mexican Grill, as the new CEO and Chair. This decision has been accompanied by a significant increase in Niccol’s compensation package to entice him to join the embattled coffee chain.
Starbucks has disclosed that the majority of Niccol’s pay will come from equity that will vest over time, contingent on company performance targets and other metrics. In his first year, Niccol’s total compensation package could reach a staggering $116.8 million if the company meets its targets and the equity fully vests.
Niccol will receive a base salary of $1.6 million annually, with the potential to earn an additional $7.2 million in cash bonuses. On top of that, he will also be eligible for annual equity awards valued at up to $23 million. In addition, to compensate for his departure from Chipotle, Niccol will receive a $10 million cash bonus and $75 million in equity, which will vest over a three-to-four-year period.
Niccol’s compensation package at Starbucks far surpasses that of his predecessor at Chipotle, Laxman Narasimhan. While Narasimhan had a base salary of $1.3 million, Niccol’s base salary is significantly higher at $1.6 million. Moreover, Niccol’s potential cash bonuses of up to $7.2 million far exceed Narasimhan’s possible bonuses of $5.85 million.
During his time at Chipotle, Niccol oversaw a remarkable increase in the company’s stock value, which climbed by an impressive 773%. This growth in stock value contributed to Niccol’s total compensation of $22.5 million last year, with stock awards and options accounting for the bulk of his earnings.
Starbucks has high hopes for Brian Niccol’s ability to lead the company to success, given his track record at Chipotle. His generous compensation package reflects the company’s confidence in his leadership skills and his potential to drive long-term value for Starbucks stakeholders. As Niccol officially assumes his role as CEO on September 9, all eyes will be on him to deliver on the high expectations set by his compensation package.