CEO Schultz and other Starbucks top managers won't get raises in 2009

Starbucks' compensation committee decided that most of Howard Schultz's pay should be directly tied to increasing the company's share price, which currently trades at less than $9 compared with a high of $20.68 about one year ago. Schultz will not participate in the executive management bonus plan in fiscal 2009. Top executives didn't receive a bonus payout under its 2008 plans either. Read "Starbucks CEO to forgo 2009 raise and bonus"

Comments

[Hbear214]

Awe.... would Howie's bonus have been more or less that the price of the 3rd jet and the Hawaii trip??? What a sacrifice! Good Partners are losing jobs, benefits, customers, hours, and faith due to the upper management blind and arrogant decisions that are being made daily and laid at their feet. These are their choices, the ramifications should be shouldered by them as well. There is no redemption in these choices for the company, nor in these execs while the people who helped afford them their lifestyle are lied to and manipulated.

[hbear214]

Awe... what a huge sacrifice on behalf of the over paid, out of touch ego manics in charge of this company. While the Partners on whose backs these peoples lifestyles were funded are losing hours, stores, jobs, benefits, customers , and faith, they will forego bonuses. These guys are responsible for the decisions that put this company in trouble, it's about time the ramifications be laid at their feet as well. Was the new (3rd)jet and the Hawaii trip more or less than the bonus would have been? The upper management of this company continues to behave shamefully, and arrogantly, all the while the Partners are being manipulated and lied to. There is no redemption for this company or them in that.

[Nerfebarista]

alright, I'm no starbucks cheerleader, though i do love my job, but you assholes need to keep the bitching to a minimum. This is getting retarded. Everyone has something negative to say no matter what the topic is and It's getting annoying.

This topic is showing us that "some" of the upper managment is being held accountable. This is a good thing. If the fatcats cant bring home the extra money, they will either bail out or actually look at what's happening to the company. To me that is a win/win situation.

[Will]

At least they have the recession to blame...

[CamSpi]

sucks that we're in a situation like this. we're going to succeed again. i hope its sooner rather than later.

[lattegal]

No bonus or raise for 2009...so does that mean they will bonus off of 2008? They did get a 45+ million dollar NEW plane when they already have 2. Baristas aren't able to use the plane just the top executives. So to me...they did get a bonus. Seriously!

[GlenFeliz Regular]

Wow, no bonus! I guess flying around the Hawaiian Islands over the holidays to dine with Lance Armstrong was enough of a bonus.

[BusyBean]

I think Howie should show his commitment to the company by accepting a $1 salary, as Steve Jobs does every year, and just live off of stock options. That way, the success of his plan for the company would truly reflect on how much money he makes.

I agree, I think if the top executives really showed how much they cared about this corporation they would take a lower salary (or in Howard's case, no salary). It's not like these individuals cannot afford it for a couple of years.

I'm sure if I had the money they have in my possession and continued to live the same way I am now, I could get by for a couple of decades!

[scootes]

i seems that only two years ago this company was in the top three to work for but not anymore. i find it amazing that executives can "justify" there salaries when the company is not preforming as expected. if a low paying barista doesn't acheive their requirements then they get fired, right? to all those who have left for greater oppurtunites, BRAVO and KUDOS for your choice to get out. i think that the execs should have to do like the european banks and if the results aren't there then they have to pay a fine to the company and the stock holders(which are employees as well). if all the numbers are so bad then why would they even think they deserved a raise or bonus? arrogant and self involved is not the way to run a company unless you are trying to run it into the ground. i know this is cliche but "time to wake up and smell the coffee guys in seattle"!!!!! big ben parliment

[Me]

Even though I don't think it is a huge sacrifice to cut down to just below 10 million a year, I do think it is a step into the right direction.

I personally would have loved it if Howard Schultz would have announced he puts his salary for the next year into a trust account. If he gets the company up again (some targets for earnings, stock price etc. would have to be set) he gets it at the end of the year (no need for a bonus since he is the biggest shareholder and would profit from a better stock price).
If not, it goes to charity as long as the company is still earning money. If not even this, it stays in the company to pay for baristas salaries.
Lead by example, Howard! You wouldn't feel hunger skipping one year's income. Baristas sure do if they have to skip just one paycheck.

That said, you are at least on track into the right direction, Mr. Schultz.

[lattegal]

Just remember that this has been announced right before the stockholders meeting. Last year the meeting was in March so if it's the same time this year then the meeting is right around the corner. The stockholders aren't going to be happy that the stock continues to go down when other companies have remained steady. Plus we aren't really happy with a 45 million dollar plane.

[PHXMGR]

Sweet God- who even needs a bonus when you get 10 million a year???

[mickey]

anybody with ifnormation on layoffs?

[Josey]

Yes. There are alot of them. Everywhere. Most aren't even layoffs yet, but rather "weeks without hours". I know many baristas who are now on their third week without hours. I feel sorry for the SM's and ASM's, they're the ones who have to do the extra (salaried, mind you) work.

[Cut out the Heart]

It is hard to be anything less then pessimistic regarding this announcement. The one thing I can give kudos to Howard for and that is being a master PR guy. He knows when to say the right thing but if you were to take a look at all his "do gooder" announcements, they usualy have a life cycle of 30 minutes. Most of what he says is only designed to make him look good but really have no substance. I would be the first to praise him if he would make a "real" sacrifice but to say I fell sorry for him not getting a raise and foregoing a bonus, well that is not going to happen. When he comes out and does something of real substance, I will be his biggest fan. Until then, spare me your personal pity party Howard.

[bucked]

ME,
BTW, Howard is not the largest stockholder.

[scootes]

is it true that controling shares of the company stock are held by magic johnson? why would you give up controling interest in your own company? calgone take me away!

[Me]

Bucked, as far as I know he is the single largest private stockholder. There are bigger institutional stockholders, but no private person. Please correct me if I'm wrong (or yahoo, to be exact).
see:
http://finance.yahoo.com/q/mh?s=SBUX

[burned bean]

It is crazy to read about how much money we are talking about for each of these individuals- The Director level positions received a $40 thousand dollar raise in 2008? Seriously. That is a salary for many people, its employment for a couple of good baristas. BTW, the more highly satisfied Baristas behind the counter translate to more frequent and enjoyable customer transactions. Invest you labor budget were your customers will really be impacted by it- That is how you build a business; greedy suits.

[NJ_newbie]

I agree with the whole $1 salary thing. I understand the need to maintain the 'quality of life' that you're used to, but I've had to cut back due to the current financial situation, it's not fun or easy, but I do it because I have no choice.

Maybe $1 is ridiculous or unfair, fine. But how about $25,000? That's more than what the average barista makes in a year...how bout they try to function on that much.

[BOSTON STARBUCKS REBEL]

Did anybody read about the "Proposed Stock Option Exchange Program" that was posted on the Portal Yesterday?

[rockstar]

I started with starbucks late last year with hopes of finally working with/for a company that genuinely cares for their employees. I had/have aspirations to climb to the top, but i havent even been certified and its been well over 90 days since ive been employeed, i do not have time to taste coffees to learn more and to become a "coffee master", i had to learn on the "fly" about the new tea lattes because we dont have to learn about them, i only get scheduled 15-20hrs a weeek at my store and hardly ever get to see my manager, its just frustrating, i'm no complaining, i'm just voicing my concerns...

[Melody]

I think we have a hint of what's coming 'round the bend now at Starbucks ... layoffs:

Layoffs expected at Starbucks

Another big round of layoffs is expected at Starbucks, possibly as many as 1,000 corporate employees as well as district managers and field employees, Diane Daggatt, a managing director at McAdams Wright Ragen in Seattle, wrote in an e-mail to the brokerage's customers today.

I guess I should've put this in an open thread - Webmaster, maybe this round of layoffs is worth its own new thread?

[Melody]

One more interesting thing that I just noticed - This article about no raises apparently only pertains to the top 4 executive:

http://seattletimes.nwsource.com/html/businesstechnology/2008661590_starbucks23.html

There are a lot more than 4 big executives at the SSC! Call me crazy, but I think if my baristas are expected to tighten their belts and do twice as much with half the resources, then more than just the top 4 dogs should forgo raises in 2009. I can think of a few others that I would include.

[Hulagrrrl]

Howard should take a cue from Steve Jobs and feature a $1 salary. I don't feel any compassion or relief knowing that the top level executives who are probably making - at the very least - $250-$500K a year AND UPWARDS won't get a bonus. Big deal. I make a substantial amount more at another company doing the same job I was doing at Starbucks. Open your eyes Howie and get in touch with REALITY - Starbucks DOES NOT pay market salaries.

[Not so bitter bean]

Hey Everyone,

I agree with Nerfebarista, Stop complaining all the time. It shows your education level when you complain the way you do. There is nothing wrong with having an interlectual discussion about the pro's and con's but get real. For the bonus discussion and salery pay for upper management - If I where in thier position and I built this multi-million dollar company, I would be making a lot of money too. they earned it. I am happy that they decided to not take a bonus and I respect them for it, but lets not blame it all on they upper management and Mr. Shultz. Lets be realistic. By for now!

re: Not so bitter bean -

Funny...you are commenting on the education level of people who are complaining and then you write "There is nothing wrong with having an INTERLECTUAL discussion..."

It's INTELLECTUAL...just thought it was funny. :)

[Not so bitter bean]

ouch....thank you for catching my mistake.. i never proof read and i should...it is funny

[spence]

Not So Bitter Bean,
I wish more people on this site thought like you do. The constant negativity and complaining has grown old.
Fellow Baristas: You are never going to earn much money as a barista. I'm working here in my 50's and earned much much more 25 YEARS AGO. But this works for me now.
Seriously, if you want more money, get a college degree in something useful.

[AliCat]

25000? I'm a shift downtown in a major city and I work around 38 hours a week (or used to - now more like 30) and last year I made around 13000... unless my W2 is lying to me...

Howard does not need to take a pay increase. He makes his money by using Starbucks as a vehicle to increase value in the other companies that he has an investment in: Kinetix, Pinkberry, Good. That's where he's going to make his next billion.

[(former)asmgirl]

In response to Josey's post about asm and sm "salaried" pay- as an sm I worked enough hors that if you divided my salary by the hours I worked, I made less than my shift before they got their tips per hour and less than my baristas after they got their tips per hour. Salary is nice as a bottom line, but if you are working harder and longer than everyone else in the building for less than they are, it makes it really hard to stay motivated.

[CoffeeAddictInWI]

When the bucks were rolling in; times were really good and everyone could afford to drink the Co. Cool-aid - Howard was a geneous and the Co. could afford to preach its agenda and even produce a movie, talk about world peace and social justice. Now that times are tough, you find out what people a are really made of. Howard SHOULD take a $1 annual salary and live or die on stock options. And besides; how long could a business model that sells coffee for $4 a cup really go on? God Bless all!

[NJ_newbie]

AliCat,

That's exactly what I mean, I'm just a regular barista, makin $7.75/hr, 9.75 with tips on a GOOD week, so I'm in the same boat. So $25,000 is more than what the average barista (and shift lead) makes in a year.

So it's not like it would be the same as us peons.

[JoeJava]

Whether you like Howard or not, it would be nice if the newspapers correctly reported his 2008 pay.

The papers reported that Schultz earned almost $9.7 million in salary and other compensation, down from $10.6 million in 2007.

If you read their SEC filings, you'll see his actual salary was about $1.2 million last year. The rest of the $9.7 total was the value of stock options that like all other partners stock options are way UNDER WATER and might never have any value! You can argue whether ANY CEO should be paid a million dollars a year, but don't try to claim that he took home $9.7 million in 2008 pay because it just ain't true.

They recently filed their Proxy statement (I think its on the Investor Relations page) and you can see that none of the top execs got bonuses last year because none of the targets were met.

What do other companies this size pay their CEOs is a better question to ask. Is $1.2 million more or less than most companies this size?

Or you might argue that shareholders should have the right to approve CEO salaries like they do in the UK. Those are more legitimate arguments than slamming him for a phony news story that incorrectly reportes he received $9.7 million in pay last year.

You might love him or hate him because of his business decisions, but get your facts straight before you cry about overpaid execs. Do you really think the company would be in a much better place if he left SBUX?

If so, who can you point to today that understands coffee, customer service, and quality better than Howard?

Go ahead and tell me. I'm still waiting...

[Frank]

Howard Schultz is not getting a raise...lol. What does a guy with over $1 Billion need a raise? The only reason he even came back is because his big ego thought he could stop the company from going under......bye bye.

[Shift Soup]

Due to the 'good of my district' I was bounced between 2 stores and 3 managers. Because I spent less than 3 months with each one, my 6 month shift review sucked. I lost out on my raise, which would have meant a lot to my family, because I was the good guy who let myself get uprooted constantly, in order to help. How is it fair that those at the top, those who dont need it, take from those of us who so desperately do? Tell me one thing those up top have done to help us lately? The last time they helped was by canceling the 2006 Leadership Conference to us lowly wage slaves could get a raise. Thanks Howie!

[CoffeeAddictinWI]

If Howard is worth One Billion Dollars - consider this: If you place each of the one billion one-dollar bills end to end - how far would it stretch? End to end they stretch 97,656 miles. That's nearly four times around the world.

Now, does Howard really need to be concerned about a wage freeze?

[Infoman]

BIG cuts in the HR department in Seattle. Hear there's only going to be a couple people left after next week

[Joshua Kerr]

My sincerest hope is that this message finds Mr.Shultz personally. I am not an sbux employee, or even a regular coffee patron. I am a husband, father, and actual believer of Mr. Schultz' supposed "vision" for this company. My wife started working for sbux 3.5 years ago. She was hired as an assistant manager, but was told that she would spend 90days as a shift supervisor to learn the ropes first. After the 90 days was passed her manager Lawrence was let go for using mistake coupons. The new manager Allen kept Trulena performing all the duties of an asst mgr while demonstrating he had no intention of promoting her. I finally convinced my wife to transfer to another store. After 2yrs, she was finally promoted to the position she was hired for, and had been performing all the duties of. Last summer, we had a death in the family and had to move to Amarillo. Since being instated as asst mgr at the Georgia st location, my wife has been continually sabotaged and berated by her new manager Janine. When Trulena got to the store Janine set the stage for her as a passive aggressive gossip war due to recent management changes, and expressed her desire to "team with my wife and retake the reigns" . Janine's first "team" act was to humiliate and ostracize my wife as follows: My wife notified her of a partner sharing a negative opinion of Janine with a customer- Janine demanded it be put on paper-Janine showed the paper to the partner and then took the partner's word against my wife. Then after my wife started noticing that there was an issue balancing the labor, the real war started. Apparently, managers are required to work certain shifts, Janine has been writing herself in for these shifts without actually being there. My wife, to avoid overtime, has been clocking out and staying an average of 5 hours a week to support her partners. Janine deleted a clock out for hours that my wife was in the store working, and when my wife entered the clock out back in was written up for time clock violation, a terminable offense. She was not let go, but was sternly warned for claiming less time than she had actually worked that day to avoid overtime. Yesterday, my wife was robbed at gunpoint. The assailant told her to give him the money or he would begin shooting her partners. She gave him the money and a state trooper who was having coffee there chased after the assailant. The customer behind him called 911 on her cell and so my wife went to call Janine. After the police and her manager had been notified she called me, her husband for support. I rushed to the scene and got there 25minutes before Janine. At 10:PM last night Janine called my home to tell my wife that she had chosen to call her loved ones rather than the police and thank god so-and-so was there. To me this is the straw that broke my back. Mr Shultz would have me belive that this company is based on dignity and respect, "Filling souls one cup at a time". So today we wait for the next round "souls laid off one family at a time" and I want to say the reason people pay 5 dollars for a cup of coffee isn't because the drink is exotic, it's because they were part of a family. By firing and closing and removing benefits, you are not helping your shareholders, your partners, or your clientelle. Your stock went up because the news released things like, you spend more on benefits than beans, and being rated the best place to work etc. Believe it or not people care about each other and when you put something in as part of a community and tell them their souls are cared for there, you are not going to make them feel better by firing their friends. We have been hanging on to the hope that these were individuals making my wife's journey with you difficult, and that filling souls was what this company was about. The siren's eye has never shone brighter than from this family. But maintaining that hope is becoming harder and harder. Why not offer a discount club, or I don't know, lower your prices? Instead of firing thousands. I bet if you lowered prices to help communities through the recession, you would really be living up to what we saw in you. However, the plan is to fire everybody, raise the price and expect the brand name to carry you through the bastardization of all your ethics? I cannot believe that after all I and my family have been through and sacrificed to be a part of your vision that you would let us so far down. I will happily go into further detail about any of the above topics if anyone takes this letter seriously.

[Carmella Asalt]

ATTENTION CORPORATE:
Your awful decisions and lack of connection to what our business ACTUALLY IS happens to be more to blame than the current economic downturn. Why can't you stop?
Customers notice your arrogance and disconnection, are dumbfounded by your new-hire management staff, repulsed by your coral polo shirts and pleated khakis.
Tell me to take the trash cans outside and dazzle them because it makes customers happy. I'll do it in a second. Just know that the reason YOU ARE EMPLOYED ISN'T BECAUSE OF THE DECISIONS YOU MAKE, BUT BECAUSE OF THE PEOPLE WHO WORK UNDER YOU. THAT is where the talent is, where the hardest workers exist, where the most sacrifices are made for the love of our company.
Brush this off. We will keep going! I wish you the best. Still, I cannot stomach the thought of such sheep with egos and catchphrases (accountability anyone?) making decisions that are step by step ruining what we have invested so much in.