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Howard Schultz returns to lead Starbucks on interim basis

Long-time Starbucks CEO Howard Schultz is returning to lead the company on an interim basis after the coffee giant’s current chief executive announced his retirement.

Kevin Johnson said he will retire next month after five years as president and CEO and 13 years at Starbucks. Johnson, a former executive at Microsoft and Juniper Networks, succeeded Schultz as CEO in 2017.

Starbucks made the announcement last Wednesday ahead of its annual meeting.

In an open letter to Starbucks’ employees, Johnson, 61, said he told the company’s board last year that he was considering retirement. His most obvious successor had been Roz Brewer, the company’s chief operating officer, but Brewer left the company in February 2021 to become the top executive at Walgreens.

Starbucks said its board has been engaged in “continuous CEO succession planning” since last year and expects to name a permanent CEO by this fall. While Schultz leads the company, he will get $1 in compensation. Schultz, 68, is also rejoining Starbucks’ board.

Some observers expressed surprise that the board would name Schultz instead of a new permanent CEO.

“It’s curious that they were not able to find a successor within a year,” said Timothy Hubbard, assistant professor of management at the University of Notre Dame’s Mendoza College of Business. “For a company the size and stature of Starbucks not to have a solid succession plan is surprising.”

Andrew Charles, an analyst with Cowen, said Schultz’s return to the board signals he wants greater say in Starbucks’ future strategy.

Workers at Starbucks stores – including five in Buffalo, New York, and one in Mesa, Arizona – have voted to unionise since late last year. As of Wednesday, 140 stores in 27 states have petitioned the National Labor Relations Board to hold union elections, according to Workers United, the union organising the Starbucks campaign.

When Schultz bought Starbucks in 1987, it had unionised workers at six stores and a roasting plant. One of his first acts as CEO was to lead an effort to decertify the union. Starbucks has fought multiple unionisation efforts since then.

“I was convinced that under my leadership, employees would come to realise that I would listen to their concerns. If they had faith in me and my motives, they wouldn’t need a union,” Schultz wrote in his 1997 memoir “Pour Your Heart Into It.”

In a statement, Workers United noted that Schultz visited Buffalo late last year to try to convinced employees to vote against the union.

“We encourage Howard Schultz to put union-busting behind him and embrace Starbucks’ unionised future,” the union said.

Schultz is credited with growing Starbucks into the global behemoth it has become. When he bought the chain in 1987, it had 11 stores and 100 employees. Four years later, when Starbucks went public, the chain had grown to more than 100 stores. Starbucks now has more than 34,000 stores worldwide.

Schultz stepped down as CEO in 2000 and became the company’s chairman. But he returned as CEO in 2008, when the company was struggling in the recession. He stepped down again in 2017 and became the company’s chairman emeritus in 2018.

Schultz spent 2019 testing the waters for a possible run for president as an independent. But he announced in the fall of that year that he had decided against it.

In a statement issued by Starbucks, Schultz said he had not planned to return to the company, but wants to help it transform again as the pandemic recedes.

“When you love something, you have a deep sense of responsibility to help when called,” Schultz said.


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