Starbucks' new CEO to supercommute 1,000 miles from California to Seattle HQ instead of relocating

Starbucks' incoming CEO Brian Niccol could make well in excess of $100 million in his first year with the company under an incentive-laden contract, and he will not be required to relocate from his home in California to Seattle, the home of the global coffee giant.

Instead, Niccol can live in his home in Newport Beach, California and commute to Starbucks’ head office 1,000 miles away on a corporate jet, according to the new CEO’s offer letter.

He will be joining Starbucks next month.

According to a regulatory filing, Starbucks will help create, with assistance from Niccol, a small remote office in Newport Beach and the company will hire an assistant for Niccol at that location.

Niccol will commute to Seattle (1,000 miles away) as needed as well as embark on any other business travel that's deemed necessary.

When he is not travelling for work, however, Niccol will still be expected to work from the Seattle office at least three days a week in alignment with Starbucks’ hybrid work policies, according to a company spokesperson.

While ordinary employees might not be able to demand the flexibility in work patterns, companies make exceptions for some senior level employees, says Raj Choudhury, a professor at Harvard Business School. This helps them retain top talent.

Choudhury says there is a growing number of CEOs who are “working from anywhere."

“It’s becoming increasingly common because we’re still in a competitive labour market,” he explains. “Executives aren’t accepting job offers if flexibility isn’t on the table," CNBC reports.

Starbucks announced on Tuesday that Brian Niccol would become its chairman and CEO, taking over from Laxman Narasimhan, who stepped down abruptly after spending a little more than a year as the company's top executive. Niccol will become Starbucks’ chairman and CEO on Sept.9.

He is among the mostly highly sought after corporate executives after establishing a track record of success in turning around companies that have hit a rough patch, including Taco Bell and, most recently, Chipotle.

Niccol took the top job at the California chain in 2018 when Chipotle was being roiled by a series of foodborne illness outbreaks that had sickened more than 1,000 of its customers over several years.

Revenue at Chipotle has nearly doubled since his arrival after he energised product innovation and at the same time, instituted employee benefits like a programme that pays employees’ college tuition costs at certain schools.

Starbucks is counting on Niccol to revive fading sales and re-establish the company as a destination where customers are willing to pay premium prices for its products.

In a filing with the Securities and Exchange Commission late on Wednesday, Starbucks said that the 50-year-old Niccol will receive a cash bonus of $10 million as well as $75 million in equity to make up for what is being forfeited by his abrupt departure from Chipotle. The equity component of his pay package will vest over time and is contingent on meeting performance targets.

If Starbucks meets those targets and other goals, his pay could easily surpass $100 million in his first year.

Niccol's annual base salary will be $1.6 million. He'll also have an annual cash incentive opportunity at a target of 225% of his base salary and a maximum of 450% of base salary. If he achieves the maximum incentive, it would be about $8.8 million.

Starting in fiscal 2025, Niccol will be eligible to receive annual equity awards worth up to $23 million.

Starbucks Chief Financial Officer Rachel Ruggeri is serving as the interim CEO until Niccol arrives in early September.

Shares of Starbucks surged 20% when Niccol's appointment was announced last week.

Agencies