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BFD Expert Voices - Retail Deals

BFD Expert Voices

The labor group pushing for a board shakeup at Starbucks is set to lose the board battle but win the broader union war.

Why it matters: The investor group's proxy fight against the coffee chain has reverberated across Corporate America, and the campaign's impact will linger well past the outcome of the March 13 shareholder vote. 

What they're saying: "In the past few months, the majority of our meetings — on the topic of just corporate preparedness — have included a discussion about Starbucks," said Jim Rossman, global head of shareholder advisory at Barclays. 

"It's an extraordinary wake up call for corporate boards in America."

Catch up quick: Influential proxy advisor Institutional Shareholder Services (ISS) dealt a blow late last week to Strategic Organizing Center (SOC), the labor-focused investor group, when it advised ISS clients to vote for all of Starbucks' director nominees at the company's annual meeting (AGM). None of SOC's nominees got the ISS nod. 

ISS' recommendation makes it next to impossible for SOC's director slate to prevail.

Yes, but: The deal struck early last week between Starbucks and the Workers United union to provide certain benefits and begin a collective bargaining framework was a huge win for the labor movement — and arguably more significant to the SOC than winning a board seat.

Zoom in: ISS itself noted the importance of the Workers United deal in its recommendation report, calling it a "major step forward for all involved." 

Don Bilson, an analyst at research firm Gordon Haskett, called the union deal a "peace offering" from Starbucks' management team to organized labor.  

"Our thought was the union won more from that agreement than it was likely to win at the AGM. ISS pretty much landed in the same spot yesterday," Bilson said in a note. 

Starbucks said in a statement: Starbucks partners are at "the core of our business" and it's committed to providing "a bridge to a better future."

What we're watching: The SOC could decide that, at this stage, it got what it wanted, and withdraw the campaign ahead of the vote tally.

Starbucks labor group losing board battle, winning union war

Workers United deal was a huge win for the labor movement

Photo illustration of a "Starbucks Workers Unite" button surrounded by abstract shapes.

Photo illustration: Gabriella Turrisi/Axios. Photo: Victor J. Blue/Bloomberg via Getty Images

Starbucks

The labor group pushing for a board shakeup at Starbucks is set to lose the board battle but win the broader union war.Why it matters: The investor group&#x27;s proxy fight against the coffee chain has reverberated across Corporate America, and the campaign&#x27;s impact will linger well past the outcome of the March 13 shareholder vote.

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Starbucks labor group losing board battle, winning union war

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