Starbucks’ pay package to lure Brian Niccol away from Chipotle Mexican Grill features a hefty sign-on bonus, lots of company stock and a contract that could make him the restaurant industry’s highest paid chief executive.
Niccol will receive a $10 million signing bonus to take the job, according to federal securities filings on Wednesday. Starbucks is also paying him $75 million worth of company shares, paid over time, to replace Chipotle stock he loses in making the move.
His annual salary will be $1.6 million and he could get a cash bonus of up to $7.2 million.
Niccol will also be eligible for annual stock awards of up to $23 million. A good year in 2025 could set him up for annual pay of more than $30 million.
The incentive package includes some other notable nuggets. Starbucks will not require Niccol to move from his California home to Seattle.
Instead, the company will open a “small, remote office” in Newport Beach, California and will reimburse him for temporary housing in Seattle during his visits to company headquarters.
Niccol was paid $22.5 million at Chipotle last year.
Starbucks named Niccol CEO on Tuesday, less than 18 months after predecessor Laxman Narasimhan took the job. He was also given the chairman title.
Pay packages featuring company stock are common, as company boards want to align the goals of top executives with those of shareholders. New executives are frequently given hefty doses of company stock as a result.
Companies also need hefty incentive packages to pry loose top executives from good companies. Chipotle Mexican Grill is one of the 10 largest restaurant chains in the U.S., and Niccol is one of the restaurant industry’s most respected executives.
In some respects the amount was lower than expected, given the $117 million in stock and option awards Patrick Doyle received in 2022 to become the executive chairman of Restaurant Brands International.
Niccol’s hiring alone sent Starbucks’ stock soaring nearly 25% on Tuesday, increasing the company’s market value by $21 billion in one day. Investors also sent Chipotle’s stock down 7.5% that day, erasing $6 million in market value from the fast-casual burrito chain.
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