8-KLeadership ChangesExhibits & Filings

STARBUCKS CORP 8-K Report, Executive Changes (Apr 5, 2022)

Filed April 5, 2022For Securities:SBUX

Summary

Starbucks Corporation (SBUX) filed an 8-K on April 4, 2022, to report a change in executive leadership. Specifically, Rachel Gonzalez is transitioning from her role as Executive Vice President and General Counsel, effective April 4, 2022. She will remain with the company in an advisory capacity until her departure on May 20, 2022. This transition is accompanied by a Separation Agreement, outlining the terms of Ms. Gonzalez's departure. The agreement details her continued employment as an advisor at 50% of her base salary and specifies severance payments, a prorated bonus, and a significant cash payment in recognition of unvested equity. Investors should note the financial impact of this separation package and the potential implications of a change in General Counsel on the company's legal and compliance functions.

Key Highlights

  • 1Rachel Gonzalez is transitioning from her role as Executive Vice President and General Counsel.
  • 2Ms. Gonzalez will serve in an advisory capacity from April 4, 2022, until her departure on May 20, 2022.
  • 3She will receive an annualized salary of $380,625 (50% of her current base salary) during her advisory period.
  • 4The Separation Agreement includes $2,283,750 in severance pay.
  • 5Ms. Gonzalez will receive a prorated bonus of $470,553 for fiscal year 2022.
  • 6A cash payment of $4,801,720 is being made to recognize equity grants scheduled to vest after her separation.
  • 7The agreement also covers COBRA continuation coverage for 18 months and $20,000 for attorneys' fees.

Frequently Asked Questions

The 8-K filing states that the change is in connection with new executive leadership. While the specific reasons for the change are not detailed, the company has decided to transition Ms. Gonzalez from her role.

Starbucks will incur significant costs related to Ms. Gonzalez's departure. These include $2,283,750 in severance, a $470,553 prorated bonus, and a $4,801,720 payment for equity. Additionally, there are costs for COBRA continuation coverage and attorneys' fees, as well as a reduced salary during her advisory period.

Ms. Gonzalez will serve in an advisory capacity until May 20, 2022, and the Separation Agreement reaffirms her existing duties and responsibilities under her Confidentiality, Non-Solicitation, Non-Competition and Inventions Agreement, except as specifically amended.

The total disclosed cash payments to Ms. Gonzalez under the Separation Agreement amount to $7,555,973 ($2,283,750 severance + $470,553 prorated bonus + $4,801,720 equity recognition payment), in addition to other benefits like COBRA coverage and attorneys' fees.