Brian Niccol, CEO of Chipotle
Anjali Sundaram | CNBC
Starbucks offered new CEO and President Brian Niccol a pay raise and large one-time bonuses to lure him from his previous position as CEO at Chipotle Mexican Grill.
Niccol will officially take the reins of the troubled coffee chain on Sept. 9. As CEO, he'll be tasked with reversing the company's declining sales, improving the customer experience inside stores and figuring out what to do with its struggling China business. It's a big job, and one for which he'll be well compensated.
Starbucks revealed Niccol’s incoming compensation plan in a filing Wednesday. The bulk of his compensation package is made up of stock that vests over time and is based on company performance goals and other metrics. In his first year, if the company hits its targets, his compensation package could reach $116.8 million.
Niccol will receive a base salary of $1.6 million per year, with the possibility of earning up to $7.2 million more in cash. He will also be eligible for annual stock awards worth up to $23 million.
And for leaving Chipotle, Niccol will receive a $10 million cash bonus and $75 million in stock to offset what he will lose by leaving the burrito chain. The shares will vest over a three-year period, depending on the company's performance and Niccol's tenure.
“Brian Niccol has proven to be one of the most effective leaders in our industry, generating significant financial returns over many years,” Starbucks said in a statement. “His compensation at Starbucks is directly tied to the performance of the company and the shared success of all of our stakeholders. We are confident in his ability to deliver lasting, long-term value for our partners, customers and shareholders.”
At Chipotle, Niccol earned a base salary of $1.3 million last year, with total compensation of $22.5 million. Stock and options accounted for the bulk of his earnings, but he also took home a $5.2 million cash bonus.
During his tenure at Chipotle, the stock rose 773%, padding the value of his overall compensation.
Niccol’s pay package is also more generous than that of his ousted predecessor, Laxman Narasimhan. His base salary was $1.3 million, with potential cash bonuses of up to $5.85 million and stock awards of $13.6 million, according to filings. In fiscal 2023, Narasimhan’s compensation was valued at $14.6 million, much of it from stock awards.
Unlike Narasimhan, who was previously based in the UK, Niccol will not need to relocate to Starbucks headquarters in Seattle.
— CNBC's Kate Rogers contributed to this report
