One year after returning to Starbucks as interim CEO for the departed Kevin Johnson, Howard Schultz handed over the reigns of the company to Laxman Narasimhan on Monday, ending an unusual c-suite changeover that featured massive changes to the company’s structure, a six-month training period and the introduction of an entire new coffee line.
Narasimhan took the helm of the company two weeks earlier than Starbucks initially said he would. The former head of health products company Reckitt was named CEO in September, started work as something of a chief executive-in-waiting in October, then spent subsequent months learning on the job under Schultz’s tutelage.
He will now be responsible for overseeing the completion of a huge number of changes made under Schultz. When the on-again, off-again Starbucks CEO took over a year ago, he held a series of town-hall-style meetings with employees, let go of some longtime executives and devised a strategy for improving operations and employee morale.
Those efforts culminated in an announced plan for $450 million in store upgrades in September and an expansion of its loyalty program into the metaverse. Starbucks then, perhaps surprisingly, introduced an entirely new line of olive-oil-infused coffee beverages called Oleato. Starbucks also boosted pay and benefits for employees, so long as they weren’t the 200-or-so stores that voted to form a union. The company said investments totaled more than $1 billion.
It will now be up to Narasimhan to put these plans into motion, even with Schultz on the board monitoring progress. Starbucks said he has been immersed in the business for the past six months and is ready to step into the permanent role. Narasimhan will make his debut as Starbucks’ permanent CEO on Thursday during the company’s annual meeting.
“Laxman’s intensive immersion into the business coupled with his extensive experience as a proven brand builder, innovator and operator have uniquely prepared him to lead Starbucks into its next phase of growth,” Mellody Hobson, Starbucks’ board chair, said in a statement. She said the immersion has “deepened Laxman’s understanding of Starbucks’ culture and values” and that he “has already won hearts and minds” of employees around the world.
Starbucks’ stock is up 8% since Schultz took over on April 4, a period in which the broader stock market has struggled. The S&P 500 is down more than 13% in that period.
“Starbucks has truly been my life’s work,” Schultz said in a letter to the company on Sunday. “Our company is like a river. The stewards of it will change over time, but it’s always growing and changing, carving a new path and moving forward to something better.”
Schultz has at least one other public appearance related to his time as interim CEO over the past year. He is set to testify later this month before a U.S. Senate committee on the company's response to a unionization drive.
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