Billionaire Howard Schultz returns to Starbucks on $1 salary

The company is marking a change in leadership as chief executive Kevin Johnson steps down on Monday

FILE - In this March 22, 2017 file photo, Starbucks CEO Howard Schultz speaks at the Starbucks annual shareholders meeting in Seattle. Schultz says the company will now allow people to use bathrooms at its coffee shops even if they don’t buy anything, as it continues to take a closer look at its operations following the arrest of two black men at a Philadelphia shop. Schulz discussed the new policy while he spoke at the Atlantic Council in Washington, Thursday, May 10, 2018. Schultz said the company previously had a “loose policy” that only paying customers be allowed to use bathrooms, but that it was up to each store manager to decide. (AP Photo/Elaine Thompson, File)
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Billionaire businessman Howard Schultz, 68, returns to Starbucks on Monday as the company’s interim chief executive on a salary of $1.

The change in leadership comes as Kevin Johnson retires from his role as president and chief executive of the Seattle-based company.

“Schultz is volunteering his time as interim CEO to Starbucks and will receive $1 of compensation,” the company said in a statement on its website.

Launched in 1971, Starbucks is the world’s largest coffee house chain with more than 34,000 shops in 83 markets.

Mr Schultz, who has a net worth of about $4.3 billion, estimates by Forbes magazine show, first joined Starbucks in 1982 and was chief executive from 1986 to 2000, during which he grew the company globally and took it public on the Nasdaq. He returned to the company in 2008 as chief executive and stepped down in 2017, when he was replaced by Mr Johnson.

“I am returning to the company to work with all of you to design our next Starbucks — an evolution of our company deep with purpose, where we each have agency and where we work together to create a positive impact in the world,” Mr Schultz said in a letter to employees that was published on the company’s website on Monday.

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Schultz is volunteering his time as interim CEO to Starbucks and will receive $1 of compensation
Starbucks

“Our vision is to once again reimagine a first-of-a-kind for-purpose company, in which the value we create for each of us as partners, for each of us as customers, for our communities, for the planet, for shareholders — comes because our company is designed to share success with each of us and for the collective success of all our stakeholders.”

Starbucks will suspend its stock repurchasing programme, effective immediately, Mr Schultz said in the letter.

“This will allow us to invest more into our people and our stores — the only way to create long-term value for all stakeholders,” he said.

Mr Schultz is rejoining Starbucks amid a difficult year for the global coffee house chain, which faces rising costs amid a growing unionisation push across the US and a resurgent Covid-19 virus in its key growth market of China, Bloomberg reported.

The stock is down 22 per cent this year, valuing the company at $105bn, said Bloomberg.

In December, Starbucks employees voted to join a union at a store in Buffalo, New York, but rejected the union at a second location in the city, marking a major milestone for labour rights in the company, Reuters reported.

“Our company, like many companies, is facing new realities in a changed world. Pinched supply chains, the decimation caused by Covid, heightened tensions and political unrest, a racial reckoning and a rising generation which seeks a new accountability for business,” Mr Schultz said in his letter to employees.

Mr Schultz will also rejoin Starbucks’s board and handle day-to-day management as well as help to find a new chief executive, the company said, adding that it expects the search to be completed by the autumn.

Updated: April 04, 2022, 10:26 AM
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