Brian Niccol, who previously worked at Chipotle, has become one of the highest-paid bosses in the US by joining Starbucks as its fourth CEO in less than three years. This move came after the unexpected removal of Laxman Narasimhan from the position.
Starbucks has provided Brian Niccol with a compensation package of over $100 million, a substantial amount in corporate history. This deal is four times larger than what was offered to his predecessor.
If Niccol achieves the set targets, he stands to receive $113 million from Starbucks, making him one of the top-earning CEOs in America. His appointment follows the sudden departure of Laxman Narasimhan, who previously served as the CEO of Reckitt Benckiser.
Having led the successful revival of Chipotle Mexican Grill, Niccol will be joining Starbucks next month. His compensation includes a $10 million cash bonus upfront, $75 million in equity grants, and a competitive salary and bonuses based on Starbuck’s performance.
Despite his high compensation, Niccol will need to prove his worth to Starbucks. His pay is significantly higher than that of his predecessor, highlighting the board’s confidence in his abilities.
In his previous role at Chipotle, Niccol earned a total of $22.5 million in 2020, with unrealized gains from equity incentive grants totaling over $82 million. The unique perk offered by Starbucks is the option for Niccol to work from a remote office in Newport Beach, California, with the company covering the cost of an assistant of his choice.
In 2023, only five executives were granted pay packages exceeding $100 million, as reported by Equilar, a firm specializing in pay data, which analyzed the top US companies by revenue. These types of contracts are rare, particularly outside of the financial and technology industries.
According to Courtney Yu, director of research at Equilar, Niccol’s potential annual compensation would surpass the median target by 83% in comparison to other S&P 500 restaurant groups like Chipotle, Darden, Yum Brands, and McDonald’s. Starbucks praised Niccol for his effective leadership and his ability to generate significant financial returns over several years, indicating that his pay is closely linked to the company’s performance and the success of its stakeholders.
When Starbucks recruited Narasimhan from Reckitt, a UK-based consumer products company, in 2022, his compensation package totaled over $28 million. This package included a base salary of $1.3 million, annual cash bonuses of up to $2.6 million, and annual equity awards valued at $13.6 million. Starbucks also provided Narasimhan with a signing bonus of $1.6 million in cash and $9.25 million in equity to compensate for incentives he relinquished by leaving Reckitt. The terms of Narasimhan’s severance payment were not disclosed by Starbucks.
