Starbucks offered incoming CEO and Chair Brian Niccol a pay bump and hefty one-time awards to lure him from his prior role as chief executive at Chipotle Mexican Grill.
Niccol officially takes the reins at the embattled coffee chain on Sept. 9. As CEO, he'll be tasked with turning around the company's slumping sales, improving customers' experience inside stores and figuring out what to do with its struggling China business. It's a big undertaking — for which he will be well compensated.
Starbucks disclosed Niccol's incoming pay plan in a filing on Wednesday. The majority of his compensation package is made up of equity that vests over time, and is based on company performance targets and other metrics. In his first year, his pay package could be worth as much as $116.8 million if the company hits its targets and it fully vests.
Niccol will be paid a base salary of $1.6 million annually, with the opportunity to earn up to $7.2 million more in cash. He'll also be eligible for annual equity awards worth up to $23 million.
And for leaving Chipotle, Niccol will receive a $10 million cash bonus and $75 million in equity to make up for what he's forfeiting with his departure from the burrito chain. The equity will vest over a three-to-four-year period, based on company performance and Niccol's tenure.
"Brian Niccol has proven himself to be one of the most effective leaders in our industry, generating significant financial returns over many years," Starbucks said in a statement. "His compensation at Starbucks is tied directly to the company's performance and the shared success of all our stakeholders. We're confident in his ability to deliver long-term, enduring value for our partners, customers and shareholders."
At Chipotle, Niccol collected a $1.3 million base salary last year, with a total compensation of $22.5 million. Stock awards and options accounted for the bulk of his earnings, but he also took home a cash bonus of $5.2 million.
During his tenure at Chipotle, the stock climbed 773%, fattening the value of his overall compensation.
Niccol's pay package is also more generous than that of his ousted predecessor, Laxman Narasimhan. His base salary was $1.3 million, with possible cash bonuses of up to $5.85 million and equity awards of $13.6 million, according to filings. In fiscal 2023, Narasimhan's compensation was valued at $14.6 million, largely from stock awards.
Unlike Narasimhan, who was previously based in the U.K., Niccol won't be required to relocate to Starbucks' headquarters in Seattle.
— CNBC's Kate Rogers contributed to this report
