Howard Schultz Steps Down as Executive Chairman of Starbucks
Starbucks Corporation announced Monday that Howard Schultz is stepping down as executive chairman and member of the board of directors and will be honoured with the title of chairman emeritus effective 26 June.
During his four decades as CEO and chairman, Schultz grew Starbucks from 11 stores to more than 28,000 stores in 77 countries. Under his leadership, Starbucks has delivered a 21,000% gain in the value of its stock price since its initial public offering in 1992. The company’s growth was fueled by his decisions to provide uncommon benefits for those who work for Starbucks, including comprehensive healthcare, stock ownership and free college tuition, even for those working part-time.
“It seems like yesterday that I first walked into the Pike Place store, stepped across the threshold, and was swept into a world of coffee and community. That moment began the journey of a lifetime. Not just for me, but for so many of us…” Schultz wrote in a letter addressed on 4 June to past and present Starbucks partners. “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. Together we’ve done that, and so much more, by balancing profitability and social conscience, compassion and rigor, and love and responsibility.”
Schultz’s journey began in 1981, when he walked into the first Starbucks store, located in Seattle’s iconic Pike Place Market. The following year, he moved from New York to assume the role of director of operations and marketing. Schultz’s passion for the high-quality coffee heightened on a business trip to Italy, where he was captivated by the sense of community, romance and theater found in Italian coffee bars. In the years following his return to Seattle, Schultz purchased Starbucks with the support of local investors and dedicated his career to bringing his vision of a modern coffee house to life in America and around the world.
Schultz developed the concept of Starbucks as the third place between home and work: a comfortable, welcoming environment that provides uplifting experiences, community and human connection.
Among his many accolades, Schultz has been named as one of The World’s Most Influential People by Time magazine as well as Business Person of the Year by Fortune. Most recently, Schultz has received the Robert F. Kennedy Ripple of Hope Award and has been presented with the Atlantic Council’s Distinguished Business Leadership award and the NAACP LDF (Legal Defense and Education Fund) National Equal Justice award.
This year, Starbucks was named the fifth most admired company in the world by Fortune, marking the 16th year in a row that the company has appeared on the global list. Starbucks was also named one of the World’s Most Ethical Companies by the Ethisphere Institute for the 12th consecutive year and was ranked as one of 2018’s Most Innovative Companies by Fast Company, most notably for its social-impact work.
On 3 April 2017, Schultz transitioned from CEO to executive chairman, shifting his full-time focus to the company’s social impact initiatives as well as innovation and global development of the company’s premium Reserve brand, including Starbucks Reserve Roasteries, Reserve stores and its partnership with artisanal Italian bakery, Princi. Following his transition off the Starbucks board at the end of June, Schultz will oversee the opening of the Starbucks Reserve Roastery in Milan on 6 September – marking the company’s long-awaited entry into Italy – and the New York Roastery in late October.
Starbucks also announced yesterday that its board of directors has appointed former JC Penney CEO and independent director, Myron E “Mike” Ullman as its new chair of the board and Mellody Hobson as vice chair of the board effective upon Schultz’s retirement. Starbucks world-class, values-based board is comprised of accomplished leaders representing diversity and excellence in global technology, retail, consumer experience and other relevant skill sets.
“There are no words to fully express our gratitude to Howard for the extraordinary company he has built,” said CEO and member of the board of directors Kevin Johnson. “He’s helped Starbucks earn the respect of millions around the world by always being true to a higher calling, and always being bold in creating a better future. He’s taught all of us that it’s possible to be a very different kind of public company. That must, and will, continue on my watch.”
In Schultz’s letter to partners, he thanked them for their collective efforts to build a different kind of company. “Because of your creativity, your hard work, and the love that you have poured into the company, Starbucks today is widely embraced and respected. As I prepare to step away, I’d like to humbly remind you not to lose sight of what matters most: your fellow partners and our customers.”
He also expressed deep confidence in the team that will continue to lead the company. “Kevin Johnson is a true servant leader, and he will lead Starbucks as this great company enters its next journey. It’s our duty as leaders to constantly reimagine Starbucks. I am honored to call Kevin my friend and partner. And Starbucks is fortunate to have him. This leadership team is extraordinarily capable. They, too, believe that Starbucks has a responsibility to use our scale for good.”
According to the company, Schultz is writing a book about Starbucks social impact work and the efforts to redefine the role and responsibility of a public company in an ever-changing society.
In the announcement about Schultz’s departure, Starbucks wrote, “To the more than 330,000 partners who wear the green apron today, and the millions before them, Schultz will forever represent Starbucks mission to inspire and nurture the human spirit one person, one cup and one neighbourhood at a time.”
Today, shares of Starbucks (NASDAQ: SBUX) are down around 2.24%, to USD $55.70 as investors absorb the news that Schultz is leaving Starbucks’ board.
