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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

Those worries come as shareholders grow impatient for a turnround in China and for definitive action regarding organizing workers. Unionization efforts have prevailed in votes at more than 100 of the coffee chain’s 9,000 company stores since an initial victory in Buffalo, New York, late last year. Starbucks has been accused of union busting and for threatening to take away certain benefits. While the company has denied wrongdoing, the union push has brought a new layer of uncertainty. The stock plunged 38% this year through Tuesday’s close, a steeper decline than that of the S&P 500 Index.

“It’s not like you’re coming into a situation where everything is super stable,” said Ben Silverman, director of research at VerityData, an adviser to investors. As Schultz tries to steady the business, he’s “putting in place kind of long-term focus and strategies, and they’ve got to find [a successor] who aligns with that,” he said.

Schultz, 68, is set to stay on as interim leader until a handoff in the first quarter of 2023. In the latest of several leadership changes under Schultz, the chain’s head of North America, Rossann Williams, stepped down last week after declining an offer for a position at Starbucks that was not CEO.

Schultz says his successor will be a creative person who understands the power of the Starbucks brand.

“Our customer base is getting younger, they are digital natives, and they expect Starbucks to be as relevant outside of our stores as we are inside,” he said in May.

 

In trying to find a CEO, Starbucks could encounter the same challenge it faces in hiring for its restaurants: a tight labor market. Buffkin, the recruiter, said the pandemic prompted a wave of early retirements and career changes that has shrunk the pool of qualified executives. Bob Gershberg, chief executive officer of Wray Executive Search, says it’s the toughest hiring market he’s seen in his career. “The talent pool is tight,” he said. “Recruiting is tough.”

For a company like Starbucks, with $84 billion in market value and an iconic brand to protect, that’s especially true.

“They need a superstar,” Gershberg said. “It’s got to be someone very strategic — a great strategic mind.”

(adds more comment from Starbucks)

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