New Starbucks boss Brian Niccol comes under fire over plans to commute 1,000 miles in corporate jet

23 August 2024, 07:48

By EJ Ward

Starbucks' newly appointed chief executive, Brian Niccol, is facing significant criticism over the company’s decision to allow him to commute approximately 1,000 miles (1,600km) by private jet.

The world's largest coffeehouse chain has come under fire on social media, with many users questioning the decision in light of Starbucks' other sustainability initiatives, such as its ban on plastic straws.

According to Mr Niccol’s job offer, he will not be required to relocate from his family home in Newport Beach, California, to the company’s headquarters in Seattle, Washington, when he assumes his new role on September 9. Instead, the agreement states: "You agree to commute from your residence to the company's headquarters (and engage in other business travel) as is required to perform your duties and responsibilities."

Starbucks has also committed to providing Mr Niccol with a "small remote office in Newport Beach," which will be maintained at the company’s expense. Additionally, the 50-year-old will be allowed to use the corporate aircraft for "business related travel," including travel between his residence and the company’s headquarters, as well as for personal travel, up to a value of $250,000 (£191,500) annually, according to the offer letter.

A spokesperson for Starbucks told CNBC earlier this week that Mr Niccol will be expected to work from the Seattle office at least three days per week, in line with the company’s hybrid work policies.

The news has sparked a wave of criticism online, with many accusing the company of hypocrisy. Some users have even called for a boycott of Starbucks, while others have declared they will no longer be patrons of the chain.

One individual wrote on X, formerly known as Twitter: "How can anyone justify a 1,000-mile #commute by private jet? Makes #Starbucks sustainability policy look like greenwashing."

Another commented: "Seriously? New CEO Brian Niccol to take a 1,000-mile private jet commute? In an age where the richest are proven primary contributors to environmental damage? I imagine you have lost a few customers through this - you've certainly lost me."

A third user added: "The new Starbucks CEO is 'supercommuting' 1,000 miles to Seattle on a private jet to work, so don't be too harsh on that waitress who gave you a plastic straw when you didn't want one."

Beyond environmental concerns, others have focused on Mr Niccol’s wages in his new role, where he stands to make well over $100 million (£76.6 million) in his first year. Starbucks has disclosed that Mr Niccol will receive a cash signing bonus of $10 million (£7.6 million) and $75 million (£57.5 million) in equity to compensate for his abrupt departure as chief executive of Chipotle. His annual base salary will be $1.6 million (£1.2 million), with the potential to earn an estimated bonus of up to $8.8 million (£6.7 million), and Starbucks shares worth up to $23 million (£17.6 million) per year from 2025.

Former US labour secretary Robert Reich voiced his concerns on X, stating: "How come we never talk about CEO pay when we talk about rising prices?"

Another user criticised the disparity, writing: "Starbucks would like its customers to pay hyper prices only to use paper straws to save the environment while the CEO flies 1,600km x 3 days a week on a private jet."

Earlier this month, Starbucks announced that Mr Niccol would be replacing Laxman Narasimhan as chief executive, a move that led to a more than 20% rise in the company’s share price. The company hopes Mr Niccol, who is regarded as one of the most sought-after corporate leaders due to his track record of turning around struggling firms, will be able to revive declining sales and re-establish Starbucks as a brand for which customers are willing to pay premium prices.

However, compared to his role at Chipotle, Mr Niccol faces significantly larger and more complex challenges at Starbucks, which operates 38,000 stores worldwide. He will need to find ways to entice inflation-weary customers back into stores for the company’s expensive beverages.

Nancy Tengler, chief executive of Laffer Tengler Investments, which holds shares in both Starbucks and Chipotle, remarked: "I will pay nine dollars (£6.90) for a burrito, I'm not sure I'm going to pay nine dollars for a cup of Venti shaken espresso."

In response to the criticism, a Starbucks spokesperson said: "Brian Niccol has proven himself to be one of the most effective leaders in our industry, generating significant financial returns over many years. 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. Brian's primary office and the majority of his time will be spent in our Seattle Support Center or out visiting partners and customers in our stores, roasteries, roasting facilities and offices around the world. Brian's schedule will meet or exceed the hybrid work guidelines and workplace expectations we have for all partners. He will also have a residence in Seattle."