Starbucks shareholders vote against executive pay plan

Starbucks CEO Kevin Johnson speaks exact via the firm’s annual shareholders meeting at WAMU Theater, on March 20, 2019 in Seattle, Washington.

Stephen Brashear | Getty Images

Starbucks shareholders rejected the coffee chain’s executive compensation proposal, in a rare admonition of an S&P 500 firm.

The resolution will not be binding and likely might possibly possibly possibly not influence the board’s decision. Alternatively, the Wall Boulevard Journal, which first reported the news, mentioned handiest 10 S&P 500 corporations own had shareholders reject annual tell-on-pay resolutions within the last year, in accordance to data from ISS Corporate Choices.

The proposal included a $1.86 million payout for CEO Kevin Johnson for fiscal 2020 performance because the firm weathered the coronavirus pandemic and $50 million in retention pay if he sticks around via fiscal 2022.

“The board unanimously supported the performance-primarily based mostly retention rewards granted to our executives in gradual 2019,” board member and Ulta CEO Mary Dillon mentioned in a assertion to CNBC. “This award – which is earned via distinctive firm performance over a interval of time – is in step with our dedication to shareholder worth advent and ‘pay-for-performance’ philosophy.”

In 2020, 84% of Starbucks shareholders voted in prefer of the pay resolution.

Earlier than the shareholder meeting, Institutional Shareholder Services, which runs ISS Corporate Choices, and Glass Lewis immediate that shareholders reject the inducement map for performance from October 2019 via September 2022. Each companies disagreed with Starbucks’ rationale for one-time cash bonuses given to CEO Kevin Johnson and used COO Roz Brewer. Brewer forfeited her cash award when she left the firm in February to attend as CEO of Walgreens Boots Alliance.

ISS wrote that it modified into all in favour of the frequency of one-time awards and that Starbucks hadn’t supplied an enough reason of why the long-term award modified into dispensed in cash.

Starbucks mentioned in a filing asking shareholders to approve the resolution that the last payout for the cash award might possibly possibly possibly not be identified until fiscal 2022. The firm furthermore eminent that Starbucks’ market worth has risen by $39 billion since Johnson modified into chief executive in 2017.

Shares of Starbucks were down about 1.5% in morning purchasing and selling on Thursday. The stock has risen 92% over the previous year, giving it a market worth of $128 billion.