Starbucks' Howard Schultz returning as interim CEO as current chief Kevin Johnson steps down
Starbucks on Wednesday said CEO Kevin Johnson is stepping down after five years at the helm of the coffee chain, a period when the company dealt with challenges including a backlash after a racial bias incident and a worker push to unionize.
Former CEO Howard Schultz will step in as interim chief executive, effective April 4, until a permanent replacement is found, the company said in a statement. The company said Schultz is volunteering his time and will receive $1 in pay.
Starbucks said it plans to select a new CEO by the fall. In the meantime, Starbucks is facing a widening push by employees to unionize its stores, although so far only a handful have organized out of its thousands of U.S. locations.
Johnson said he began talking with the company's board of directors a year ago about retiring from his role.
"A year ago, I signaled to the Board that as the global pandemic neared an end, I would be considering retirement from Starbucks. I feel this is a natural bookend to my 13 years with the company," Johnson said in the statement.
Johnson joined Starbucks' board of directors in 2009 and became the company's president and chief operating officer in 2015. Two years later, he succeeded Schultz as CEO.
During the past five years, Starbucks' stock has increased 57%, lagging the broad-based S&P 500-stock index's 83% gain during the same period. The company's sales took a hit during the pandemic — as did many food companies — with sales declining 11% in its fiscal year ended September 2020.
But rStarbucks evenue rebounded in the most recent fiscal year as the economy recovering its footing.
Shares of Starbucks jumped 5% on Wednesday. There's a value in having Schultz step in, given his knowledge of the brand, according to Timothy Hubbard, assistant professor of management at the University of Notre Dame's Mendoza College of Business.
"Howard Schultz knows Starbucks. He knows the company's strategy and goals," Hubbard said in an email. "And Schultz is in a position to help in ways other interim CEOs could not. But, for a company the size and stature of Starbucks not to have a solid succession plan is surprising."
Schultz grew Starbucks from 11 stores in 1987 to more than 28,000 stores in 77 countries by the time he stepped down as executive chairman in 2018, according to the company.
"Although I did not plan to return to Starbucks, I know the company must transform once again to meet a new and exciting future where all of our stakeholders mutually flourish," Schultz said in the statement.