Starbucks has done something bold by allowing its new CEO Brian Niccol to live in California and providing him with a corporate jet to fly 1600 km away to the Starbucks headquarters in Seattle. The 50-year-old business executive has made a livelihood out of fixing struggling firms. He will receive compensation in the form of an annual base salary to be set at 1.6 million dollars along with cash bonuses potentially totalling as much as 7.2 million dollars tied directly to performance metrics.
Niccol’s appointment comes at a time when Starbucks is facing flailing sales in its two biggest markets – the US and China – under the stewardship of outgoing CEO Laxman Narasimhan. The company is pinning its hopes on Niccol, who has delivered a 773% increase in Chipotle’s stock price while serving as its CEO.
The unconventional commutation agreement is not out of place, as Niccol managed to get this when he was CEO of Chipotle back in 2018. However, not all CEOs are privileged to do this, for example, Amazon’s Andy Jassy and JPMorgan Chase’s Jamie Dimon are among the CEOs who are encouraging their employees to return to work physically.
Starbucks has supported Niccol’s commuting arrangement, arguing that his official workplace will be in Seattle, while the rest of his time will be spent travelling to partners and customers in stores, roasteries and offices globally. The company also had to ensure that his schedule would be beyond the hybrid work model and expectations of other employees of the company.
The circumstances of Niccol’s appointment and his contract indicate the difficulties and prospects that Starbucks is to face in the context of the evolving business environment. Niccol will undoubtedly feel the pressure of a global coffee giant behind him as well as his successful background – he will be expected to act fast and make the right decisions.
