Brian Niccol could earn at least $113 million as the new CEO of Starbucks — even as he works remotely out of an office in Southern California that’s 1,000 miles away from the coffee giant’s Seattle headquarters.
Niccol, lured this week from the helm of Chipotle Mexican Grill, will be allowed to work out of Newport Beach, Calif., a posh coastal enclave that’s located south of Los Angeles, the company revealed in securities filings.
Meanwhile, the 49-year-old executive be paid a base salary of $1.6 million as well as an annual bonus that could reach between two and four times that amount, according to a company filing with the Securities and Exchange Commission.
Starbucks also gave Niccol a $10 million signing bonus and annual stock awards valued at $23 million, which will be distributed beginning next year, filings show.
Niccol will also receive a $75 million equity grant to be paid out over three years as compensation for his departure from Chipotle, where last year he earned $22.5 million.
If Niccol does decide to move to Seattle, Starbucks will reimburse him for relocation expenses and cover up to three months of temporary housing costs, according to the SEC filing.
Niccol, who was credited with reviving Chipotle, will also be provided the services of a driver at company expense should he relocate.
His first day on the job as CEO will be Sept. 9, according to the filing.
In March of last year, then-CEO Howard Schultz called back Starbucks employees to the office at least three days a week — a move that was met with protest from corporate staffers.
“Brian Niccol has proven himself to be one of the most effective leaders in our industry, generating significant financial returns over many years,” Starbucks said in a statement.
“His compensation at Starbucks is tied directly to the company’s performance and the shared success of all our stakeholders.”
Shares of Starbucks soared 25% on Monday after the company announced Niccol’s hire, boosting the company’s market capitalization by $20 billion.
Rachel Ruggeri, Starbucks’ chief financial officer who will be its interim CEO until Niccol officially takes the reins next month, cashed in more than $341,000 in company stock on news of the change, according to an SEC filing.
Niccol replaces Laxman Narasimhan, whose tenure only lasted a year-and-a-half after he was originally brought in as CEO in March 2023 to engineer a “reinvention” of the world’s biggest coffee chain.
Since then, the stock has continued to falter, losing nearly one-quarter of its value.
Niccol inherits a company that is under pressure by activist investor Elliott Investment Management to improve its business.
Starbucks has also been hamstrung by increased competition and slower demand from consumers in the US and China.
Niccol’s appointment is a coup for Starbucks, as Chipotle’s annual sales have surged since he joined in 2018, and the stock has more than tripled over the last five years.
Starbucks had been under pressure from Elliott, which had built a $2 billion stake.
The hedge fund had suggested Starbucks expand its board and make Elliott executive Jesse Cohn a director, though it was not demanding a CEO change.
Sources familiar with Starbucks told Reuters that Schultz had been pressing board members to try and solve the company’s issues without offering a board seat to the activist investor.
Chipotle said its board had appointed Scott Boatwright, chief operating officer, as interim CEO.
Niccol, who has an engineering major from Miami University, joined Chipotle in 2018 from Taco Bell and helped the company overcome salmonella and E.coli outbreaks at several outlets.
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