01—Abstract
Summary
Summary of the 8-K filed March 4, 2025. Cited figures are marked; the original filing is the authoritative source.
On March 4, 2025, Starbucks announced that Cathy R.
Smith will join as executive vice president, chief financial officer, and principal financial and accounting officer, effective on a date yet to be determined. Smith most recently served as EVP, CFO and treasurer at Nordstrom (since 2023), and previously held CFO roles at Target, Express Scripts, Walmart International, GameStop, Centex, Kennametal, Textron, and Raytheon. The same day, the company disclosed that Rachel Ruggeri is leaving the CFO role, with her separation qualifying as a "without cause" termination under the Executive Severance and Change in Control Plan.
Smith's offer letter, dated February 27, 2025, sets a base salary of $925,000a and a target annual cash incentive of 125% of base, prorated for fiscal 2025. To offset roughly $15 million in forfeited awards from Nordstrom, she receives a $5 million cash signing bonus (split 50/50 over one and twelve months) and equity grants with target values of $6.4 million (replacement grant) and $4.5 million (fiscal 2025 annual grant). Both equity grants are 60% performance-based and 40% time-based RSUs.
Her compensation is described as consistent with that paid to the prior CFO. For investors, the transition is a leadership change at a critical point in the "Back to Starbucks" turnaround led by CEO Brian Niccol, who framed Smith as a turnaround and retail finance specialist. The filing does not disclose an effective date or any change to financial guidance, so the near-term impact will depend on the timing of Smith's start and the continuity of finance leadership during the handover.
02—Key points
Key Highlights
- Cathy R. Smith, former Nordstrom EVP and CFO, named as Starbucks' new CFO and principal financial and accounting officer; effective date to be determined.
- Rachel Ruggeri is departing as CFO; her exit qualifies as a 'without cause' separation under the Executive Severance and Change in Control Plan.
- Smith's base salary is $925,000 with a 125% target annual cash incentive, prorated for fiscal 2025.
- Smith receives a $5 million cash signing bonus to offset roughly $15 million in forfeited awards from her prior employer, paid 50% after one month and 50% after twelve months.
- Equity package includes a $6.4 million replacement grant and a $4.5 million fiscal 2025 annual grant, each 60% performance-based and 40% time-based RSUs.
- Equity grants continue vesting if Smith is terminated without cause, a protective term for the new CFO.
- CEO Brian Niccol framed the appointment as supporting the 'Back to Starbucks' plan, with Smith described as bringing turnaround and retail experience.
03—Questions
Frequently Asked Questions
Who is replacing Rachel Ruggeri as Starbucks' CFO?
Cathy R. Smith, currently executive vice president, chief financial officer and treasurer at Nordstrom, has been named to succeed Ruggeri as EVP, CFO and principal financial and accounting officer. Her start date has not yet been determined.
When will the CFO transition take effect?
The filing states that both appointments are effective on a date to be determined. The Brian Niccol letter says Smith will start 'in the next month,' suggesting the transition is expected in the near term, though no specific date is given.
What compensation is Smith receiving?
Smith's offer letter provides a $925,000 base salary and a 125% target annual cash incentive, prorated for fiscal 2025. She also receives a $5 million cash signing bonus, a $6.4 million replacement equity grant, and a $4.5 million fiscal 2025 annual equity grant. The equity awards are 60% performance-based and 40% time-based RSUs.
Why is Starbucks paying a signing bonus and replacement awards?
Smith forfeits roughly $15 million in cash incentives and equity awards at Nordstrom when she leaves. The signing bonus and replacement grants are intended to compensate for those forfeited amounts and to induce her to join Starbucks.
Does Ruggeri's departure involve severance?
The filing states that Ruggeri's separation meets the 'without cause' provisions of the Executive Severance and Change in Control Plan for all plan benefits. The filing does not quantify the severance amount.
04—Continue