Starbucks CEO Kevin Johnson is retiring after five years on the job.
Howard Schultz will return to take the helm of the company he elevated into a global brand. Schultz will serve as interim CEO, while the company searches for a long term successor. This will be his third tenure as the coffee giant’s chief executive.
Shares of the company rose 5% in premarket trading on the news.
The company announced the leadership transition ahead of its annual shareholder meeting.
“A year ago, I reported to the Board that as the global pandemic neared an end, I would be considering retirement from Starbucks. I feel this is a natural bookend to my 13 years with the company,” Kevin Johnson said in a statement. “As I make this transition, we are very fortunate to have a founder who is able to step in on an interim basis, giving the Board time to further explore potential candidates and make the right long-term succession decision for the company.”
Johnson joined the board in 2009 after working as CEO of Juniper Networks, and became a member of the leadership team in 2015 as president and COO. In 2017, Johnson was named President and CEO, succeeding Schultz.
In addition to steering the company through the pandemic, Johnson used his expertise as a former tech executive throughout his tenure to push Starbucks into the digital age, revamping its loyalty program and updating its store footprint to reflect the different ways consumers buy their coffee now. He also pushed the chain’s expansion in China, which is its second-largest market.
In his time as head of the company, shares of Starbucks rose nearly 50%, including Wednesday’s premarket gains.
Starbucks says it intends to select a permanent successor by this fall.
“We’re not going to hire over Zoom, I can tell you that,” Mellody Hobson, chair of Starbucks’ board and co-CEO of Ariel Investments, said on CNBC’s “Squawk Box.”
Schultz, in a statement, said he had no plans to return to the company. He was previously CEO from 1986 to 2000, and again from 2008 to 2017.
“When you love something, you have a deep sense of responsibility to help when called. Although I did not plan to return to Starbucks, I know the company must transform once again to meet a new and exciting future where all of our stakeholders mutually flourish ,” Schultz said in a statement. “With the backdrop of COVID recovery and global unrest, its critical we set the table for a courageous reimagining and reinvention of the future Starbucks experience for our partners and customers.”
Schultz’s salary as interim chief executive will be $1, the company said. Hobson said the company will lean on “his excellent and his brilliance” throughout the transition, but denied he would stay longer as the company’s next full-time chief executive.
“We have a great slate of candidates. People want this job, and we’re fully confident we’ll have a new leader in the fall,” she said “… He’s not going to stay for three years. … We get him until the fall, full stop. Trust me.”
The CEO shift came amid growing efforts among its employees to unionize. In a move that may have signaled his return to the company, Schultz appeared at Buffalo, New York-area cafes ahead of union elections, along with other top Starbucks executives, to dissuade baristas from voting in favor of unionizing.
To date, roughly 140 Starbucks stores in 26 states have petitioned the National Labor Relations Board to unionize, according to organizers Starbucks Workers United. Six locations so far have voted in favor of a union.
On Tuesday, a group of 75 investors in Starbucks sent a letter to Hobson and Johnson urging the company to adopt a policy of neutrality for all current and future attempts of its workers to organize.
This week, the National Labor Relations Board filed a complaint over accusations Starbucks retaliated against two employees in Phoenix who were seeking to unionize their store location.
This is breaking news. Check back for updates.
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