Howard Schultz's compensation rose 45% in 2010

The Starbucks CEO got a salary of $1.3 million last year -- double what he received in 2009, according to a company filing with the SEC on Friday. Howard Schultz also got nonequity compensation of $3.5 million, and $16.7 million in stock and options, which is 35% more stock and options than he received in fiscal 2009. || Read "Starbucks CEO's pay rose 45% in 2010"

Comments

[Coffee Soldier]

In fiscal 09 didn't Howard take a very minimum salary for his job like 10,000 or something like that? Before everyone starts bashing him CEO's do not come cheap...and he obviously knows what he is doing with the stock moving from 8 bucks a share to nearly 33 in less than 2 years. Without the decisions made by our leadership team over the past 2 years this company would possibly either been bought out or gone out of business by now if it had continued to be operated as it had been in 2008. I saw hats off to Howard and company they deserve some compensation.

[meme]

He created this business out of nothing he is the starbucks god so what is the problem ya'all

[lattelady]

Seriously folks? After all the people I saw lose their job & benefits? After benefits were cut? Vacation time cut? So many changes in the company that it is hard to be proud? After 10 years I feel like I have a legit opinion about this.

Then we never really got back to basics, but instead made MORE changes and added more crap to sell.

[Siberiabux]

I agree with both sides, the reality is the company that existed, the Starbucks that everyone loved and loved to work, was not a sustainable model. Anyone who has been with the company can think back to excess partners on the floor an time for coffee tastings/seminars, ample time for deep cleaning, exponential growth and development. I myself started as a barista and within under 4 years was a SM; unfortunately I dont believe that is possible anymore. Yes, the company changed drastically, yes a lot of people suffered and continue to struggle, but we did what we had to in order to survive. Do I believe anyone should receive extra benefit for enacting these eronius, yet albeit necessary changes, no. But Howard was making big money before, so it's no surprise he is making big money now. I came to my breaking point almost two years ago and I really had to decide, is this "transformed" company the one I want to work for? Unfortunatly not partner has made up their mind- the past is the past, either get on the new ship or get out, don't bitch because the captain gets the bounty

[anon-girl]

Yes, CEOs don't come cheap, but a 45 percent increase is like a slap in the face to the driblets of hourly wages that the larger portion of Starbucks partners make. Schultz should feel ashamed of himself.

We aren't asking for a million dollars a year, rather, just a decent wage. At this point, Howard is the only star bucks employee that's received a substantial wage.

This news will send shock waves of low morale throughout the stores. Bravo Howard Schultz.

[ntnl]

Eff you Howard. If there is this much money in the company my store should have more than two people on a busy Saturday night.

[BAYAREABUX]

If you ever thought Starbucks was going out of business, you're drinking Howard's crap straight from the chalice. Generally speaking any company with profitability, an addictive product, and no serious competitor is not "going out of business."

And honestly I'd be shocked if the Starbucks board hasn't written a 'poison pill' into the charter to prevent a hostile takeover. I never thought Starbucks would be bought out unless HS wanted to be bought out -- they probably got some offers, though.

[Melody O.]

@bayareabux - I think you are probably right on. Even when they were experiencing "negative store traffic" in 2008, they still posted a profit, just a lot less of one, as I recall. I hadn't thought about the possibility of a poison pill, but could very well be.

[Stan]

"After all the people I saw lose their job & benefits? After benefits were cut? Vacation time cut?"

WINNER!!! I can live with taking away some stuff when the chips are down, i have a job, but when the chips go back up, give some of it back.

"If you ever thought Starbucks was going out of business, you're drinking Howard's crap straight from the chalice. Generally speaking any company with profitability, an addictive product, and no serious competitor is not "going out of business."

Starbucks Psychic:
Howard is either going to sell within 6 years and take the bar/coffee shop model as his own thing and start new, or turn almost all of our stores into that.

[BB]

they did give some back. They gave back the 401k match - i personally figured once that was gone forever it would never come back. They also gave everyone a bonus - that was something I hadn't seen since 4 years ago just as I got hired.

So Howard made a lot of money as a CEO of a big company. So what. Welcome to the real world where CEO's make lots of money. Even the ones who 'only make xx a year' they still get millions in options. Its the way of the world.

The fact is Howard took a company that was at $8 a share and raised it up to 31.73. He deserves the money, even if he had to sacrifice us to make it happen.

[Jim]

I work in the Tacoma Starbucks and I cannot seem to get a straight answer on this. Our machines are making more noises than usual and customers are complaining about things like the milk temp, which auto temp is supposed to do.

When are they going to maintenance our equipment? Has anyone seen a tech in the past 3 months? Why isn't Starbucks paying to have them come in? To give Mr. Shultz a raise? This is starting to frustrate us partners :(

[....]

I am sure taking it from 8 to 33 a share had absolutely nothing to do with the economy. People seem to forget that he took it from 33 to 8 a share as well.

[hipsterdufus]

I am fine with his compensation.

As some have pointed out, as things have gotten better, they have started to give back. The 401k match, better SIP plans, an extra holiday day. Not everything, but more than I expected them to give back and quicker than I imagined too.

As for the lay offs, they had to happen. Some great people prob got laid off, but in my districts we used layoffs to get rid of those that needed to go (at the store level, I have no experience with the corporate layoffs.). But we don't need to get into a whole thing about that again, I know this site has been over that time and time again. Point being, STarbucks would not be at the price there are today with out those layoffs.

[otterinthewater]

I think that seeing CEOs making many hundreds of percent more than front-line employees is a social ill, not necessarily a Sbux-only problem. Would I like to see the company I work for try to buck the trend? Yes. Do I believe that will occur? No.

No surprise here, really...

[spence]

To all of you who think his pay is unfair, I challenge you to create a new business and do what Howard has done.

[Jazzhands]

I think it's great that it all comes down, not to how much Howard actually made last year, but that he's getting paid more than the Barista/SS/ASM/SMs.
It's not a social ill to work hard for a company and then be rewarded for the work that you put in.

Also, I know Sbux isn't perfect, but there's a lot more rewards for working here than most other retail/foodservice jobs.
Tips might not be what you could get waiting tables, but every six months you get a review, with the possibility of a pay raise. You're not stuck at minimum wage. This may not be the case everywhere, but in my area, you're not even HIRED at minimum wage.
I've worked several retail locations(6, at last count, not including SBux), and none offer close to the stock options, the SIP rewards, or the ease of qualifying for benefits that Sbux does. And all of them that I've worked for paid less, with less chance for upward movement, and less opportunities for raises.
There might be a long way to go to be "perfect," but at least Sbux is a forerunner.

[buck*it]

@jim
try cleaning your machines twice a day. depending on your business they should me done after rush and them at night. I work at a busy DT and we do this. when we dont we have problems with noise and powder errors and the like. we still have the verisimos (sp?) also if you have the V's then your steam wand needs to be deep cleaned once or twice a day. The mastreana (sp?) are faster to clean and should be done twice a day too. If your temp is wrong on them (check with a thermometer while you steam it) then it just needs to be calibrated. A tech can do it with their 6-month maintenance. If you are not cleaning yor machines right you are going to have more issues then you should. or if your machines are 3 1/2 to 4 yrs old you will. if you are still using the V's then you will get the new machines by dec.

[otterinthewater]

@Jazzhands

By no means do I think a leader should not get more pay than a grunt. Go ahead and pay them the big bucks. The social ill I'm referring to is the ever-increasing compensation (I hesitate to call it just wage) gap between rich and poor. Which, again, is not a
Sbux problem.

[SBUX Alum Bill]

There's something wrong with a system where the CEO makes about 1,000 times the compensation of the average employee in his company, largely due to layoffs and "restructuring" at the expense of those very "partners." There's really something wrong when that CEO writes a book extolling his virtues as a great, enlightened guy. It's that last point, the hypocrisy, that truly separates Howie from the rest of pack.

[Shifted]

@Bill:
"There's something wrong with a system where the CEO makes about 1,000 times the compensation of the average employee in his company, largely due to layoffs and "restructuring" at the expense of those very "partners." "

Exactly!

Especially when in most other countries, the ratio is about 14:1. Even if H$ was "only" given 500 times what the average barista gets, imagine what they might be able to give back to the partners and the stores.

So yeah, he started the company and has really nice hair and all, but is what he does today, worth a thousand times what you make? That's just warped -- not just for Starbucks but for all companies who operate this way.

[wasatech]

@ Coffee Soldier - That $10,000 salary that was announced for FY09 was AFTER they had already paid he $600,000 up to that point. He only got away with this mythology because the company didn't have report the first $600K compensation until the Q2 FY10. Not only that but that, but this is when they started awarding restricted stock grants to vp and above. So Howard made a bit more then $10K for FY09.

[medevacs]

Oh please Howard! I know you run this company, you make shareholders happy by growing this business and making shares prices rising and you gave me this job. You deserve to have big salary like this $1mln or whatever you have there. But 45% pay rise + much more in stock and options + probably a lot of other "hidden" money in your expenses covered from company's budget? I don't expect as a barista to have salary like you but be fair to your employees. You call us "partners". I am sorry, but I do not feel like a partner. I do not feel a partner to other employees who are being paid the same money as me while I work hard and they just stand and chat with each others most of their time. Moreover, I do not feel a partner when they get their "partner bonus" for somebodies else's efforts and I am not getting mine because I was working very hard doing extra jobs and probably because of this I was genuine sick and don't have required attendance to receive bonus. I don't feel a partner when nobody listens my concerns. I don't feel a partner to a guy who cuts my hours for savings while he gives a 45% pay rise to himself. Besides, what did you recently do to deserve pay rise? Trashed half of your district managers and forced SMs to cut hours in half? Every college student who passed Economy 101 knows that cutting labour hours and employment costs are the easiest way to find some saving - but it only the good ones know that it is not always the best way for the company! You expect sacrifices or at least understanding from your employees? Start savings from yourself and the rest of this small group of people at top of company's chain of command who generates half our salaries costs. Instead of trashing partners get rid of people who develop such stupid things as nobody-wants-to-buy-VIA, tasteless dark cherry mocha frapp., terribly-sweet-pomegranate frapp. and people-don't-buy-me-and-if-they-do-this-they-complain-it-doesn't-taste-like-it-is-supposed-to-plus-it-takes-half-of-the-shift-to-make-me-while-other-customers-are-waiting-Porridge. Every new thing you introduce to our stores, doesn't matter if it's a product or if it's an equipment or procedures, rules, etc., every new thing is just worse then the previous version. Every new procedure is much more time consuming. Every new equipment is braking ten times faster then previous one. Have your people in the head office actually ever worked in any store? Because every time I read new The Scoop, Sirene's Eye, etc. I have this impression that you don't test your stupid ideas on "living organism" at all or you do this in some tiny store located somewhere in the remote areas of Nevada's deserts or Oregon's forests.

[usorthem3]

Right now it seems that both sides looking at this news are about even, some for, some against.Some think it's a justified % and some think it's a bit high compared to the store levels of no more than 5%. I happen to get 2.5% myself. So I guess it depends on whether you take the "red" pill or the "blue" one. OMG we are living in the SBUX Matrix aren't we? Can I be Neo? Do I plug in directly into the espresso machine? Just a bit of fun reading the comments and reserving my own on the topic. 4 day Vacation! NYC here I come.

[sense]

Spence.....you nailed it.

I expect few on this lemming board to understand this though.

[Crateish]

And the disparity of wealth in America continues to grow.

[SBUX Alum Bill]

@ sense:

As one of the "lemmings" that was pushed off the cliff by Howie, I beg to differ with you. Howie ask his "partners" to make sacrifices out of loyalty to the company. They did. The company's financial picture improved, and Howie chose to reward himself, but not his "partners." He also chose to publish a book praising himself about being such an enlightened guy, and he constantly goes on the air with words of praise for the way he treats his "partners." He's free to do what he wants, but I don't have to admire him for it.

[Rich]

and he deserves every penny of it.

[Anon]

Rich get richer... poor get poorer. I share some of medevacs frustration.

[Mike]

This is a bargain. The people who make coffee are following a procedure and are the end of a complicated process to bring the coffee to the customer. I think the person who designed the procedures and the complicated process should get paid a lot more than a person who does a job that designed so the person cannot fail in doing that job.

[the manager who became a barista]

Disgusting ! after 9 years with the company, I am not even at 40K a year !!! I work more than 40 hrs a week, I often get split days off, work on weekends, never got a bonus because of the size of the store (12K a week) and I receive tons of retail merchandise that doesn't sell but my store pays for it, run the store understaff for the sake of Labor (0% target), and insane goals for VIA ...

Why shouldn't the buyers and/or marketing people held accountable for their actions ? if your next promo is not a success, you're fired !! If the mugs and tumblers you bought are not flying off the shelf, you're fired !

Why is it always the store manager responsible for other people mistakes, bad decisions, bad taste, poor strategy ? Why ?

[Stephen]

I always love the fact that people think that Howard Schultz created Starbucks. Two things: Starbucks was a successful startup concept created by mom and pop public who did it with zero capital and years of hard work. Along comes venture capital man who knows pr and how to con investors. By using public money he can gamble for years on this undervalued business and build on every corner where other independents have no chance. 20 years layer the only people who can get into the business are mcds and one of the few businesses that can be built by small people is gone. Do people even remember cafes that had the buzz of conversation live music and sit down service not to mention multiple choices. The reason why it works is because he increased price thru marketing and touchy dwelt marketing. I love it I am standing at a sbux counter which states it is made of a fallen tree while they are mowing down the rainforest to plant cheaper coffee. Any idea how much trash is created by a Starbucks. Meanwhile encroachment and sitting on leases so competitors can't get a chance to compete makes it more likely that most people will never know anything else but sbux and every few years they get cheaper with product benefits and pay more for packaging and marketing. I'll tell you what Howard Schultz and others invented was a new way to cook a lobster slowly and by degrees. That was the idea all along and everyone feels special holding their customized empty calorie laden product while walking past the other automatons drinking their coffe label proudly displayed. Corporatism at it's finest!