Howard Schultz Steps Down as Starbucks Chairman

Business

Starbucks Executive Chairman Howard Schultz announced he will be stepping down from his position on June 26 this week. He will instead become the company’s chairman emeritus. Schultz made the announcement in a memo sent to Starbucks employees on Monday.

“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.

Schultz first joined Starbucks in 1982 as director of retail operations and marketing. Starbucks had started as a single location on Seattle’s Pike Place in 1971. In 1987 an espresso-bar company that Schultz had left Starbucks to found acquires the company’s assets with the backing of local investors. The company changes its name to Starbucks Corporation. At the time, they had eleven stores.

Today Starbucks has more than 28,000 stores in seventy-seven countries all over the world. The company had sales of more than $22 billion in FY 2017. Schultz’s 37.8 million shares of Starbucks, or a 3 percent stake in the company, is worth about $2.17 billion.

Schultz did not announce plans for his future although there is wide speculation it may include a political run. He has been a vocal supporter of both former President Barack Obama and Hillary Clinton and there are rumors he may begin on his own presidential bid.

“This will be an emotional transition, but I’m looking forward to spending time with my family this summer. I’m also writing 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 wrote.

“It’s a journey that has prompted me to consider the many ways that each of us, as citizens, can give back to our communities. 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.”

Starbucks recently announced a $7.5 billion deal with Nestle that will give the Swiss food and beverage company exclusive rights to sell Seattle’s signature coffee in stores around the world.

It was also recently announced that the company’s payment app is the world’s most popular, with 20.7 million people using it at least once every six months last year, according to data research firm eMarketer. The app beat out other tech giants’ offerings Apple Pay, Google Pay and Samsung Pay.

The company had suffered negative publicity in recent months though in the wake of an incident in which two young African-American men were arrested after asking to use the restroom at a Philadelphia Starbucks. The two men did not buy anything and sat in the restaurant. The store manager called the police after asking them to leave.

Video of the arrest sparked outrage and protests after going viral.

“The company, the management and me personally — not the store manager — are culpable and responsible. And we’re the ones to blame,” Schultz said in the wake of the incident. “We were absolutely wrong in every way. The policy and the decision she made, but it’s the company that’s responsible.”

The company closed all 8,000 of its U.S. locations on the afternoon of May 29, 2018 for racial-sensitivity training. They will be “the beginning, not the end of an entire transformation of our training at Starbucks,” Schultz said of the sessions.

The company also announced a revision to its bathroom policy in which even those who don’t purchase anything at the restaurants can use the facilities.

Photo of first Starbucks restaurant by Mark Stephenson via Flickr

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