Starbucks sets ambitious goals for corporate diversity — and ties it to executive pay

SEATTLE — Starbucks plans to significantly boost racial diversity among its workforce — and it’s making that goal a factor in the pay of its senior executives.

By 2025, the Seattle coffee giant wants people of color represented in at least 30% of roles in corporate operations and 40% of retail and manufacturing roles, CEO Kevin Johnson told employees Wednesday. The goals, part of an ongoing effort to encourage diversity, reflect the company’s obligation “to build bridges and create environments where all are welcome,” Johnson said.

Starting in 2021, the compensation of Johnson and 42 other senior executives will be tied to the company’s success at meeting those goals, although the company declined to offer details.

However, the company did share how far it must go to reach those goals.

Currently, 18.5% of its 43 top executives — senior vice-presidents and higher — are people of color, the company said. In its retail operations, people of color make up 23.5% of regional vice presidents, 27.1% of regional directors, and 34.9% of store managers.

By contrast, Starbucks has already reached its diversity goals in several categories. These include vice presidents (31.6% of whom are people of color) shift supervisors (44.3%) and baristas (48.5%).

Starbucks’ willingness to publicly state its goals is laudable, said Ines Jurcevic, an assistant professor at the University of Washington Evans School of Public Policy & Governance and an expert in diversity management. Research has shown “making those goals public is necessary for being able to achieve them,” Jurcevic said.

She also commended the company for publishing its current diversity numbers “because we don’t know where (a company’s) challenges are if we don’t know what representation looks like to begin with.”

Starbucks’ announcement of its goals comes during a year of high-profile stories about diversity and corporate culture as businesses have confronted the Black Lives Matter movement and calls for racial justice in the wake of the police killing of George Floyd, a Black man, in Minneapolis.

In June, Starbucks came under fire for temporarily banning employees from wearing Black Lives Matter symbols at work. Starbucks stores in the Seattle area have been routinely vandalized during some recent protests.

But Starbucks has also stepped up its diversity initiatives. The company has made Juneteenth an official company holiday. On Wednesday, it announced plans to give $1.5 million via the Starbucks Foundation to community groups, with an emphasis on organizations with Black leadership and that serve Black communities.

Starbucks said it is also working to hire more people of color and retain them by making the company’s culture more inclusive. That includes anti-bias training, better tools for tracking employees’ career trajectories, and programs such as the mentoring of employees who are people of color by senior executives.

Ultimately, those initiatives will be as crucial to the success of the diversity goals as any numerical goals, Jurcevic said.

She said corporate diversity programs that focus too heavily on meeting numerical goals can often underemphasize the changes necessary so that people of color actually want to work there.

“It’s one thing to have representation goals, but it’s another thing to think about corporate culture and how your culture, both from the retail level all the way up to corporate, embodies this value of equity and inclusion,” she said.

Despite growing attention to corporate diversity, progress has been slow. According to a recent report by Mercer, a consulting company, people of color still account for just 23% of company managers, 17% of senior managers, and 15% of executives.

But diversity initiatives can come with risks. Starbucks’ efforts come after a recent inquiry by the U.S. Department of Labor into whether Microsoft and Wells Fargo broke workplace civil rights laws by seeking to double their ranks of Black leaders.