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Starbucks likely to tap board director to fill top job as Schultz exit looms

Leslie Patton, Bloomberg News on

Published in News & Features

Starbucks Corp.’s hunt for a new chief executive officer has no shortage of complications: The coffee giant’s crucial China business is sputtering and its US stores are grappling with unionization efforts, potential turnoffs for plum candidates. The company lacks natural internal successors after the departure last year of two C-suite leaders.

And the leader will face the delicate matter of managing a seamless transition with Howard Schultz, the charismatic Starbucks honcho who is now serving a third stint as CEO and plans to stick around for a bit to help the new boss get settled.

“They’re just walking into a lot of economic, supply-chain and labor headwinds; it’s a tough job,” said Craig Buffkin, managing partner at recruiter Buffkin Baker. Referring to the executive-search firm involved in Starbucks’s process, Buffkin said, “I don’t envy Russell Reynolds in this search.”

The complex demands suggest the company is likely to tap a director as its next CEO, Buffkin said. Former CEO Kevin Johnson, whose retirement in April kicked off this search, found a path to the top job from the board, where he had served since 2009 before becoming chief operating officer in 2015 and CEO in 2017.

“We have viable candidates that give us confidence” to announce a new CEO in the fall, a spokesperson for the Seattle-based company said in an email. “It would be premature to feed any rumors or speculation at this time.”

‘Known Outsiders’

 

Mary Dillon, a Starbucks director since 2016, is a natural fit to run the restaurant chain, said Kevin McCarthy, senior vice president at Neuberger Berman, which owned 1.25 million shares of the coffee company as of March.

Dillon, the former chairwoman of Ulta Beauty Inc. who also ran the company for eight years, is a Chicago native with decades of experience working for and running consumer companies. While at Ulta, she helped the brand become a go-to shopping destination for teens. She also led global marketing for fast-food behemoth McDonald’s Corp. for more than four years.

Dillon stepped down this month as executive chairwoman of Ulta, a transition that had been announced last year. She posted a retirement letter online with the signoff “#notdoneyet!”

Another director, Ritch Allison, has been under consideration for the Starbucks CEO role for some time, according to a person familiar with discussions held with external candidates. Allison, 55, who joined the board of Starbucks in 2019 and stepped down as CEO of Domino’s Pizza Inc. in April, has several attributes that make him appealing, the person said, particularly his experience in food retail operations at a company that emphasized technology. Domino’s has led the industry in adopting innovations like mobile ordering and AI-powered voice ordering.

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