On Friday, Starbucks Corporation’s stock price increased after it hired former Chipotle Mexican Grill CEO Brian Niccol to replace Laxman Narasimhan.
The famous coffee shop’s stock price rose by 0.53% to $94.81 per share on August 16. Also, it is expected to inch up by 0.14% to $94.94 apiece in the after-hours session.
Analysts said that Niccol, as its new CEO, can generate at least $113.00 million despite working remotely out of a Southern California office.
According to a company filing, the newly appointed executive would be paid a base salary of $1.60 million, including an annual bonus. They also gave Niccol a $10.00 million signing bonus and yearly stock awards worth $23.00 million.
Moreover, the new Starbucks CEO will receive $75.00 million in equity, spread over three years, as compensation for his departure from Chipotle, where he earned $22.50 million last year.
Meanwhile, Narasimhan, who was assigned as its CEO in March 2023 to reinvent the coffee chain, only lasted a year and a half. Also, the corporation’s stock has continued to plummet since then, losing almost a quarter of its value.
Conversely, Starbucks has been pressured by more aggressive competition and easing demand from consumers in the US and China.
Brian Niccol to Handle Starbucks Mobile App Issue
New Starbucks CEO Brian Niccol will be tasked with fixing the coffee chain’s operational issues. According to Howard Schultz, its mobile app is its weakest area.
Mobile orders account for around one-third of the company’s total sales and are more complicated and time-consuming.
Investors and executives said that operational issues contributed to its lagging sales in recent quarters. Other factors that also caused declining sales include weakening consumers and boycotts, adversely affecting its brand.
Furthermore, Niccol’s fix for the mobile app problem can potentially solve its existing issues when he pursues his role as Starbucks’ CEO.
