8-KLeadership ChangesRegulation FDExhibits & Filings

STARBUCKS CORP 8-K Report, Executive Changes (Sep 1, 2022)

Filed September 1, 2022For Securities:SBUX

Summary

Starbucks Corporation (SBUX) has announced a significant leadership transition via an 8-K filing on September 1, 2022. The company has appointed Laxman Narasimhan as Chief Executive Officer-Elect, effective October 1, 2022, with a planned transition to Chief Executive Officer and a Board seat by April 1, 2023. Mr. Narasimhan brings extensive global leadership experience from his tenure as CEO of Reckitt Benckiser Group Plc and various senior roles at PepsiCo, along with a strong consulting background from McKinsey & Company. This appointment marks a pivotal moment for Starbucks as it seeks to navigate its next phase of growth and innovation. Investors should note the comprehensive compensation package designed to attract Mr. Narasimhan, including a substantial base salary, incentive opportunities, signing bonus, and equity awards, reflecting the company's commitment to securing top-tier executive talent. The filing also details employment terms, restrictive covenants, and severance provisions, providing transparency into the agreement.

Key Highlights

  • 1Appointment of Laxman Narasimhan as CEO-Elect, effective October 1, 2022.
  • 2Planned transition to CEO and Board appointment by April 1, 2023.
  • 3Laxman Narasimhan's extensive global executive experience at Reckitt Benckiser and PepsiCo.
  • 4Significant compensation package for Mr. Narasimhan, including base salary, incentives, signing bonus, and equity awards.
  • 5Details on restrictive covenants, including non-competition and non-solicitation clauses.
  • 6Severance provisions outlined for various termination scenarios.

Frequently Asked Questions

Laxman Narasimhan, age 55, is the newly appointed CEO-Elect of Starbucks. He most recently served as the Chief Executive Officer of Reckitt Benckiser Group Plc, a global consumer health, hygiene, and nutrition company. Prior to Reckitt, he held significant leadership positions at PepsiCo, including Group Chief Commercial Officer and CEO roles for various international regions. He also has extensive experience from his 19-year tenure at McKinsey & Company.

Mr. Narasimhan is expected to start with Starbucks on October 1, 2022, as CEO-Elect, reporting to the interim CEO. He is slated to be appointed Chief Executive Officer and join the Board of Directors on or before April 1, 2023.

Mr. Narasimhan's compensation includes an initial base salary of $1,300,000, an annual cash incentive target of 200% of his base salary, and annual equity awards targeted at $13,600,000 starting in fiscal year 2023. He also received a cash signing bonus of $1,600,000 and a replacement equity grant valued at $9,250,000 to compensate for forfeited awards from his previous employer.

Yes, the agreement includes a cash signing bonus to compensate for forfeited incentives from his prior employer. Severance provisions are detailed, including payments and equity considerations under specific termination scenarios, such as if he is not appointed CEO by April 1, 2023. He is also subject to restrictive covenants, including non-competition and non-solicitation for eighteen months post-termination.