Making sense of new Starbucks' CEO pay
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Illustration: Shoshana Gordon/Axios
Incoming Starbucks CEO Brian Niccol's new pay package prompted raised eyebrows and eye emojis last week.
The intrigue: Luring the rising star away from Chipotle wasn't going to be cheap. And it's his success at the burrito chain — reflected in its share appreciation — that's helping to fatten his number at Starbucks.
By the numbers: There are multiple components of the offer that helped sway Niccol, including:
- $1.6 million per year: This is his initial base salary, 23% more than at Chipotle last year.
- $10 million: This is his sign-on bonus, part of which is meant to cover cash incentive awards and equity that would have vested within the year at Chipotle.
- $75 million–$80 million: This is a one-time equity "replacement grant" that will be spaced out over three years to cover any value in Chipotle stock that Niccol gave up to join Starbucks.
- Other annual cash and stock awards are also part of the arrangement.
What they're saying: While the use of cash and stock bonuses to cover the value of lost compensation is common, they're usually not this high, Courtney Yu, director of research at Equilar, told Axios in an email.
- "The value speaks more to his time at Chipotle," Yu says, where the value of his equity grants grew over his tenure as CEO.
By the numbers: Chipotle stock rose more than 700% since Niccol took over as CEO in March 2018.
Between the lines: Switching jobs pays — for the average American and definitely for in-demand CEOs.
Editor's note: This story was originally published Friday in the Axios Closer newsletter.
