Starbucks shareholders vote against executive pay plan

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

Stephen Brashear | Getty Images

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

The decision will not be binding and certain will not impression the board’s determination. However, The Wall Street Journal, which first reported the information, stated solely 10 S&P 500 corporations have had shareholders reject annual say-on-pay resolutions within the final yr, based mostly on information from ISS Corporate Solutions.

The proposal included a $1.86 million payout for CEO Kevin Johnson for fiscal 2020 efficiency as the corporate weathered the coronavirus pandemic and $50 million in retention pay if he sticks round by means of fiscal 2022.

“The board unanimously supported the performance-based retention rewards granted to our executives in late 2019,” board member and Ulta CEO Mary Dillon stated in a press release to CNBC. “This award – which is earned through exceptional company performance over a period of time – is consistent with our commitment to shareholder value creation and ‘pay-for-performance’ philosophy.”

In 2020, 84% of Starbucks shareholders voted in favor of the pay decision.

Ahead of the shareholder assembly, proxy advisory corporations Institutional Shareholder Services, which additionally runs ISS Corporate Solutions, and Glass Lewis advisable that shareholders reject the inducement scheme for efficiency from October 2019 by means of September 2022. Both corporations disagreed with Starbucks’ rationale for one-time money bonuses given to former COO Roz Brewer and Johnson. Brewer forfeited her money award when she left the corporate in February to function CEO of Walgreens Boots Alliance.

ISS wrote that it was involved concerning the frequency of one-time awards and that Starbucks hadn’t offered an ample rationalization for why the long-term award was distributed in money.

Starbucks stated in a submitting asking shareholders to approve the decision that the final word payout for the money award will not be identified till fiscal 2022. The firm additionally famous that Starbucks’ market worth has risen by $39 billion since Johnson turned chief executive in 2017.

Shares of Starbucks had been down about 1.6% in afternoon buying and selling Thursday. The inventory has risen 92% over the past yr, giving it a market worth of $128 billion.

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