Starbucks welcomes Brian Niccol with a lush package even as Howard Schultz’s shadow remains

Starbucks (NASDAQ:SBUX) disclosed some of the terms of its compensation arrangement with incoming CEO Brian Niccol in an SEC filing late on Wednesday.

During Niccol’s employment with the company, he will receive an initial base salary of $1,600,000 per year, and an annual cash incentive opportunity at a target of 225% of base salary and a maximum of 450% of base salary, which will be prorated for fiscal year 2024. Beginning in Starbucks’ (SBUX) fiscal year 2025, Niccol will be eligible to receive annual equity awards with a target value of $23,000,000, pursuant to the terms of the shareholder approved equity plans. In his first year of employment, if the company hits its targets, Niccol’s pay package could be worth as much $116.8 million.

Niccol will receive a cash signing bonus of $10,000,000, in consideration for cash incentive opportunities that are being forfeited from his current employer and equity that would have invested at Chipotle (CMG).

Niccol will not be required to relocate to Starbucks’ (SBUX) headquarters in Seattle, but has agreed to commute from his residence to the company’s headquarters as is required to perform his duties and responsibilities. Starbucks (SBUX) is setting up a small remote office in Newport Beach to assist Niccol.

Even after the high-profile hiring of Brian Niccol, Starbucks (SBUX) could still feel the presence of ex-CEO (three times) Howard Schultz. Notably, Schultz is still the company’s largest individual shareholder and sits in the position as chairman emeritus for life. He is also allowed to attend and observe board meetings, according to the Financial Times. Reports indicated that Schultz met with Niccol before he was hired, but activist investors Elliott Investment Management and Starboard Value were not notified ahead of the announcement.

Starbucks (SBUX) fell 2.09% on Wednesday, but are still up more than 20% for the week.