8-KLeadership ChangesRegulation FDExhibits & Filings

STARBUCKS CORP 8-K Report, Executive Changes (Mar 16, 2022)

Filed March 16, 2022For Securities:SBUX

Summary

Starbucks Corporation (SBUX) announced a significant leadership change via an 8-K filing on March 16, 2022, detailing the retirement of President and CEO Kevin R. Johnson, effective April 4, 2022. Following his departure, Johnson will provide transition services until the end of fiscal year 2022, with a reduced salary and bonus opportunity starting June 1, 2022. This transition marks the end of a tenure that saw considerable growth and evolution for the coffee giant. In a move aimed at ensuring an orderly leadership succession, the Board of Directors appointed Starbucks founder and former CEO, Howard Schultz, as Interim President and CEO, also effective April 4, 2022. Schultz, a seasoned leader with extensive experience at Starbucks, will serve without a salary and will not receive additional compensation beyond standard employee benefits, reflecting a commitment to guiding the company through this pivotal period. The filing also disclosed ongoing business arrangements with entities owned by Mr. Schultz for aircraft services and hangar space, with Starbucks anticipating significant payments from these entities.

Key Highlights

  • 1Kevin R. Johnson is retiring as President and CEO and from the Board of Directors, effective April 4, 2022.
  • 2Howard Schultz, Starbucks founder and former CEO, has been appointed as Interim President and CEO, effective April 4, 2022.
  • 3Mr. Johnson will receive reduced base salary and annual bonus opportunity during his transition services period.
  • 4Mr. Schultz will receive a nominal base salary of $1 and participate in standard benefit plans, with no additional compensation for his interim role.
  • 5Starbucks will continue to receive payments for aircraft services and hangar space from entities owned by Mr. Schultz, totaling approximately $7.6 million in fiscal year 2022.
  • 6The company is undertaking an orderly transition with the return of a key founder to lead the company in the interim.

Frequently Asked Questions

The filing states that Kevin R. Johnson notified the board of directors of his decision to retire as president and chief executive officer and as a member of the board, effective April 4, 2022. The specific reasons for his retirement were not detailed in this 8-K filing.

Howard Schultz will receive a base salary of $1 and will be entitled to participate in Starbucks’ benefit plans on the same basis as similarly situated partners. He will not receive any other compensation or benefits for his service as interim president and chief executive officer and as a member of the board.

Yes, Starbucks and entities owned by Mr. Schultz have existing agreements for management services related to his aircraft and a hangar space lease. Starbucks anticipates receiving approximately $6.9 million in fees for aircraft services and approximately $700,000 in rent for hangar space from Mr. Schultz's entities in fiscal year 2022.

Kevin R. Johnson's retirement is effective April 4, 2022. Howard Schultz will assume the role of Interim President and CEO on the same date. Mr. Johnson will continue to provide executive transition services until the end of fiscal year 2022.