Niccol is also not moving to the Seattle area for the role, with Starbucks arranging a remote office for him in Southern California.
SEATTLE – The incoming Starbucks CEO could earn well over $100 million in his first year with the company under an incentive-laden contract, and he won’t be required to move from his California home to Seattle, home of the global coffee giant.
Starbucks announced Tuesday that Brian Niccol would become its chairman and CEO, taking over from Laxman Narasimhan, who stepped down abruptly after spending a little more than a year as the company’s chief executive. Niccol will become Starbucks chairman and CEO on September 9.
Niccol is among the most in-demand business leaders after establishing a track record of successfully turning around companies that have hit a rough patch, including Taco Bell and most recently Chipotle.
Niccol took the top job at the California chain in 2018 when Chipotle was hit by a series of foodborne illness outbreaks that had affected more than 1,000 of its customers over several years.
Revenue at Chipotle has nearly doubled since his arrival, after he energized product innovation while introducing employee benefits such as a program that pays for employees’ college tuition at certain schools.
Starbucks is counting on Niccol to revive fading sales and re-establish the company as a destination where customers are willing to pay high prices for its products.
In a filing with the Securities and Exchange Commission late Wednesday, Starbucks said the 50-year-old Niccol will receive a cash signing bonus of $10 million and stock awards totaling $75 million when he joins the company. The equity component of his pay package will vest over time and is conditional on meeting performance targets.
If Starbucks meets these and other goals, his salary could easily exceed $100 million in his first year.
Niccol’s annual base salary will be $1.6 million. He will also have an annual cash incentive option with a target of 225% of his base salary and a maximum of 450% of base salary. If he earns the maximum incentive, it would be around $8.8 million.
Beginning in fiscal year 2025, Niccol will be eligible to receive annual stock awards valued at up to $23 million.
Perhaps just as notably, Starbucks is not requiring Niccol to move to Starbucks headquarters in Seattle, saying he can stay in Newport Beach, Calif., where he currently lives and where Chipotle is based.
According to a regulatory filing, Starbucks will help create, with assistance from Niccol, a small remote office in Newport Beach, and the company will hire an assistant for Niccol at that location.
Niccol will commute to Seattle as needed, as well as undertake any other business travel deemed necessary.
Starbucks Chief Financial Officer Rachel Ruggeri will serve as the interim CEO until Niccol arrives in early September.
Shares of Starbucks rose slightly before the market opened on Thursday.