Longtime Starbucks Corp CEO Howard Schultz is scheduled to return to the helm of the global coffee shop chain, the company said on Wednesday, serving as interim CEO during the search for a new leader amid a growing unionization drive.
Kevin Johnson, who has led the coffee giant since 2017, plans to retire next month, the company said, adding that it expects to name a new CEO by the fall.
Schultz, 68, who joined the company in 1982, grew Starbucks from a small Seattle coffee chain into a global juggernaut in his two stints as CEO. His wealth has been valued at US$4 billion, Forbes said in its list of the richest people in the world.
Shares of the coffee chain rocketed higher on Wednesday, even as union leaders expressed misgivings about Schultz.
With more than 34,000 stores worldwide, Starbucks reported a record US$29.1 billion in annual revenues last year, but has struggled to manage rising costs amid a tight labor market and supply snarls.
Besides the challenges posed by inflation, Starbucks is facing a growing wave of unionization campaigns that has spread to more than 100 US stores after workers at two upstate New York cafes voted to form a union in December last year.
Johnson, 61, told the board one year ago that he was considering retiring in the wake of COVID-19 pandemic upheaval, calling the decision “a natural bookend to my 13 years with the company,” according to a media statement.
Starbucks said it had enlisted the recruitment firm Russell Reynolds Associates in “continuous CEO succession planning” since last year.
The union movement poses challenges for the chain, which has been viewed as a worker-friendly company given its stance on gay marriage, race relations, the environment and other issues.
The labor group Starbucks Workers United said that Shultz was a “leader in Starbucks’ anti-union campaign.”
Schultz visited Buffalo ahead of the union vote in November last year to try to persuade workers against voting for the group.
In a letter to workers, he discussed the benefits the company provides, including healthcare and free college tuition, saying he was “saddened and concerned” that employees felt that outside representation was needed.
Staff at two Buffalo cafes voted to join Starbucks Workers United on Dec. 9. Since then, additional shops in the area have also joined, along with a cafe in Mesa, Arizona, with more looking to do the same.
Equity analysts at investment firm Cowen & Co said they were “a bit surprised” that Starbucks was searching for external CEO candidates, naming a number of high-ranking executives who could have taken over.
“We note a strong internal bench, but believe unionization publicity could be a factor pushing the company to look externally,” Cowen said in a note.
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