8-KLeadership ChangesCorporate ChangesOther Events+1

STARBUCKS CORP 8-K Report, Executive Changes (Jun 5, 2018)

Filed June 5, 2018For Securities:SBUX

Summary

Starbucks Corporation (SBUX) filed an 8-K report on June 4, 2018, announcing significant leadership changes. The most impactful event for investors is the retirement of long-time Executive Chairman Howard Schultz, effective June 26, 2018. Mr. Schultz, who has been instrumental in building Starbucks into a global powerhouse, will transition to an honorary role of Founder and Chairman Emeritus and will provide advisory services through October 30, 2018. In conjunction with Schultz's retirement, the Board of Directors has appointed Myron E. Ullman, III as the new Chair of the Board and Mellody Hobson as Vice Chair of the Board. The company also announced the departure of director Craig Weatherup, reducing the Board size to ten members. These changes signal a new chapter for Starbucks' leadership, with a focus on the future direction of the company.

Key Highlights

  • 1Howard Schultz is retiring as Executive Chairman and from the Board of Directors, effective June 26, 2018.
  • 2Mr. Schultz will assume a lifetime honorary role as Founder and Chairman Emeritus.
  • 3He will provide advisory services to Starbucks on select initiatives through October 30, 2018, under specific terms.
  • 4Myron E. Ullman, III has been appointed as the new Chair of the Board.
  • 5Mellody Hobson has been appointed as the Vice Chair of the Board.
  • 6Director Craig Weatherup has departed the Board, reducing its size to ten members.
  • 7The company has amended its Bylaws to clarify the roles and responsibilities of the Chair and Vice Chair of the Board.

Frequently Asked Questions

Howard Schultz's retirement marks the end of an era for Starbucks. He was instrumental in its growth from a small chain to a global coffee giant. While his departure from active leadership is a significant event, his continued role as Founder and Chairman Emeritus and his advisory services for a period suggest a desire for a smooth transition. Investors will be watching to see how the new leadership steers the company's strategic direction and continued growth.

The retirement agreement outlines specific compensation and equity treatment for Mr. Schultz. He will receive a payment of $1,875,000 related to the 2018 bonus plan. His stock options will be fully vested and exercisable for 36 months post-retirement. Notably, unvested time-based restricted stock units will be forfeited, while performance-based restricted stock units will be treated based on achieved performance levels and prorated vesting conditions.

Myron E. Ullman, III, previously the Lead Independent Director, has been appointed as the new Chair of the Board. Mellody Hobson, a current director, will serve as the Vice Chair. This leadership change within the Board is effective upon Mr. Schultz's retirement.

Mr. Schultz will transition to a lifetime honorary role as Founder and Chairman Emeritus. He will also provide advisory services to the Company on selected initiatives until October 30, 2018. While he will not be compensated for the honorary role, he will receive reimbursement for reasonable business expenses incurred during his advisory period and retain health and welfare benefits.