Schultz stepping down at Starbucks
Tenure as executive chairman will end June 26.
Starbucks executive chairman Howard Schultz, who as CEO shepherded the Seattle-based coffee chain into a global heavyweight, is stepping down later this month.
Schultz’s 40 years with the company — marked by his proving that people will pay up for coffee and making Frappuccino a household word — will end June 26. His honorary title will be chairman emeritus.
He handed over the CEO duties to Kevin Johnson in April 2017.
“Many of you also know that I set out to build a company that my father, a blue-collar worker and World War II veteran, never had a chance to work for,” he wrote in a letter to employees. “Together we’ve done that and so much more by balancing profitability and social conscience, compassion and rigor, and love and responsibility.”
Schultz made social conscience a key tenet of the company; for example, Starbucks has comprehensive health care, stock ownership and free college tuition, even for part-time staffers. In March, the chain offered up a $10 million challenge to design a compostable coffee cup.
The announcement comes less than two months after Starbucks suffered a major PR nightmare stemming from the arrest of two African-American men at one of the chain’s downtown Philadelphia locations.
The company apologized repeatedly and reached a financial settlement with them. Both Schultz and Johnson met with the men, and the reputation-tarnishing event spurred the company to close its 8,000-plus company-owned stores in the U.S. and its corporate headquarters on May 29, so as many as 180,000 employees could undergo racial-bias training.
But Schultz’s ideology has dipped into the political sphere, too, His outspokenness on issues, such as gay rights and refugees, has fueled speculation that he’s looking to run for president.
Starbucks didn’t comment about plans that he’s seeking elected office. But in his letter, he didn’t rule out public service, saying, “I’ll be thinking about a range of options for myself, from philanthropy to public service, but I’m a long way from knowing what the future holds.”
Schultz said he plans to spend time with his family this summer and write a book about Starbucks’ “social impact work and our efforts to redefine the role and responsibility of a public company in an ever-changing society.”
Schultz will be making two brief returns to the company when he oversees the opening of the Starbucks Reserve Roastery in Milan in September and the New York Roastery in October, according to the company.
“Consumers will not tell the difference,” said Nick Setyan, managing director at Wedbush Securities. “The cult of personality is an issue for Starbucks, and it’s been for some time. In terms of the next five years and executing near, medium and long term, the vision won’t change.”