January 27, 2025
Starbucks’ board opened the corporate coffers to ensure its new CEO, Brian Niccol, hit the ground running. Niccol, tasked with revitalizing the coffee giant amid flagging sales and internal strife , is set to earn $10 million in bonuses for just six months on the job.
The board’s investment underscores the urgency of Niccol’s mission to reverse course at a company battling employee discontent and heightened competition.
His strategy? A back-to-basics approach focused on improving the customer experience while streamlining processes for baristas.
The early returns suggest Niccol is making progress, but the board’s hefty incentives signal they’re betting big on his ability to deliver sustained results.
An SEC filing seen by Fortune reveals Niccol's sign-on bonus to join the brand, jumping ship from Chipotle , included a signing bonus of $10 million.
The first $5 million of the package has already been awarded on the one-month anniversary of his start date. The rest will be paid in March, on the six-month anniversary of his joining the team.
As well as motivating Niccol to stay up to and beyond the six-month mark, the filing covers the loss of any golden-handcuff agreement Niccol may have had with his former employer.
The filing reads the bonus was "intended to replace the sum of (i) the estimated earned value of Mr. Niccol’s cash incentive opportunity, which he forfeited when he departed his previous employer and (ii) the estimated value of the equity awards granted by his previous employer that would have vested within the six months following his departure."
Starbucks's 2025 proxy statement also states that Niccol's incoming salary package includes a base salary of $1.6 million.
However, that base salary sets the annual incentive bonus target at up to 450% at the maximum end, meaning a further bonus of up to $7.2 million may be awarded.
It's clear the board at Starbucks had set its eyes on Niccol to replace former CEO Laxman Narasimhan.
In a filing the week before last, lead board director Mellody Hobson announced she would not be standing for reelection at the board's 2025 shareholder meeting.
In her letter to Starbucks' chief legal officer, Brad Lerman, Hobson reveals the company's "dogged pursuit" of Niccol as its successor.
"With Brian Niccol firmly at the helm (after a dogged pursuit!), I am confident Starbucks is in excellent hands," Hobson writes. "For this reason, I now feel comfortable stepping away from the board and do not plan to stand for re-election. I believe it is important for Brian to have a lead director who can sit alongside him for years to come—my twenty years is already a long time."
Securing Niccol to lead Starbucks' next phase also meant compensating the boss for any awards he lost out on because of the move.
In addition to signing bonus, annual incentive bonus, and salary, Niccol's compensation package is boosted by a further $75 million to $80 million in replacement equity grants.
The proxy statement reads that this, again, is to compensate for the equity rewards Niccol forfeited when he left his former employer.
The range of up to $5 million on top is due to the share price boost Niccol gave to the company when he joined, the statement reads: "This $80,000,000 maximum value cap was triggered due to the 24% increase in our stock price on the announcement of Mr. Niccol’s hiring."
In addition, Starbucks also guaranteed it would open a remote office (Niccol is based in California, while Starbucks is headquartered in Seattle) and fly the CEO between his primary city of residence and headquarters on a private aircraft.
Moreover, Niccol was awarded up to $250,000 in personal non-commuting travel per year.
Perhaps unsurprisingly—but notably given the recent focus on CEO security following the murder of United Healthcare CEO Brian Thompson—Niccol's compensation package also includes personal security and a chauffeur around Seattle.
"Given Mr. Niccol’s CEO role, the enhanced media attention that Mr. Niccol and Starbucks are subject to, and the current threat landscape, the security study for Mr. Niccol recommended that Mr. Niccol use private aviation for all air travel, whether for personal, commuting, or business purposes," the proxy statement adds.
Starbucks did not immediately respond to Fortune 's request for comment.
