Starbucks is giving executives incentives to follow through on the company’s comeback plan. | Photo by Jonathan Maze.
Starbucks really wants its executives to accomplish the company’s turnaround plan.
The Seattle-based coffee shop giant, which is working to break free from an 18-month sales and traffic slump, has approved $6 million in performance-based stock for executives to encourage them to follow through on the company’s turnaround plan.
The incentives were detailed in a filing on Wednesday. They vest at the end of the 2027 fiscal year, creating a sense of urgency at a company that is overhauling much of the way it operates.
The incentives will pay out only if the company meets certain expense reduction targets. And they are tied to various elements of CEO Brian Niccol’s “Back to Starbucks” plan.
That includes a rollout of the “Green Apron” service program that will add workers to its shops by the end of this summer, along with coffeehouse uplifts, a new food and beverage program and a “reimagined Starbucks Rewards” loyalty program.
(Check out our look inside Starbucks’ remodeled coffee shop.)
The payouts are also dependent upon the company’s stock performance. They will only be paid if Starbucks’ total shareholder return is in the 50th percentile compared with the S&P 500 over that period.
But the incentives show just how intent Starbucks is on engineering its comeback plan. The company’s sales began slowing in late 2023 and have declined every quarter since, its longest such sales slump—outside of the pandemic—since the Great Recession.
The company’s plan is designed to return to its roots as a coffee shop where customers want to stay awhile. It is working to improve service inside the shops. It is planning remodels of stores to make them more comfortable and inviting, including the return of 30,000 seats that were removed from the system coming out of COVID.
Starbucks is also testing new food and beverage platforms, such as fresh-baked croissants and protein cold foam.
Niccol was lured to the chain last year from Chipotle to revive the company, the first time Starbucks had ever hired a CEO with previous restaurant experience. Starbucks since then has reorganized much of the corporate structure, laying off workers in the process, changed its advertising and overhauled the executive team.
(Check out our look at Starbucks’ comeback plan.)
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