Starbucks next ceo Laxman Narasimhan
With a $1.3 million annual salary, Starbucks chooses Laxman Narsimhan as its new CEO.
The multinational coffee giant Starbucks has appointed Indian-born Laxman Narasimhan as its new CEO, succeeding Howard Schultz, who will serve as the organization’s interim CEO through April 2023. On October 1, 2022, Narasimhan must start by moving from London to Seattle, where the company is based.
According to a regulatory filing, Narasimhan’s base remuneration will be $1.3 million per year. To make up for the incentives he will lose by leaving Reckitt Benckiser, he will also receive a replacement equity award with a target value of $9.25 million and a cash signing bonus of $1.5 million. He will also be qualified for annual equity awards totaling $13.6 million beginning in the fiscal year 2023.
“Starbucks’ dedication to improving mankind through connection and compassion has long set the company apart, creating a unique, internationally acclaimed brand that has revolutionised how people interact over coffee. I feel honoured to be joining this storied business at such a critical time, as our investments in partner and customer experiences have given us the opportunity to reinvent ourselves in order to meet the ever-changing demands we face today and position us for an even brighter future, said Narasimhan.
Less than 1% of the company’s shares gained in after-hours trading, barely registering a change. Since Schultz took over as temporary CEO, they are currently down by 24 percent.
Ashish Sinha, portfolio manager of Reckitt shareholder Gabelli, said “He took a really balanced approach to strategy… He didn’t go in all guns blazing – he took a very scientific way to get things right.”
During the transition period, according to Starbucks, Mr. Narasimhan will spend time with Schultz and the management team, working as a barista, getting to know the staff, and touring manufacturing facilities and coffee farms.
While it surprises us that Starbucks chose a replacement from outside the discretionary industry, Andrew Charles of Cowen wrote in a note that he is confident Mr. Narasimhan’s experience as the CEO of a publicly traded multinational corporation and his background in beverages at PepsiCo will benefit Starbucks in the future.
Less than 1% was gained by the coffee chain’s shares in after-hours trading. Since Schultz’s appointment as temporary CEO, they are down 24%.