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Last week, Starbucks shocked corporate America by both announcing Brian Niccol as its new CEO and slapping a staggering $113m pay packet on his soon-to-be desk.
But the eye-watering compensation package is not the only part of the sudden leadership change to raise eyebrows.
Alongside details including an annual salary of $1.6million, $74million in stock options, $23million in share-based bonuses, $3.6million in cash bonuses, and a $10million sign-on bonus, Niccol’s offer letter also contained a provision that freed him from relocating to its main office in Seattle.
“During your employment with the company, you will not be required to relocate to the company’s headquarters … You agree to commute from your residence to the company’s headquarters (and engage in other business travel) as is required to perform your duties and responsibilities.”
Starbucks even set him up with a “small remote office in Newport Beach,” maintained at the expense of the company, alongside an “assistant of your choosing for such office.”
Generous doesn’t cut it. There’s just one problem: Starbucks’ hybrid working policy mandates all corporate staff to work in the office three days a week.
Why Niccol’s commute is a bad idea for all involved
Back in 2023, then-CEO Howard Schultz introduced the return-to-office (RTO) mandate. “It is a shift designed to preserve the flexibility and productivity that you’ve built through your work-at-home rituals while, at the same time, bringing us together in a synchronized way for the in-person work that’s vital for our future success,” he explained in a statement to staff.
The memo also suggested that the mandate would not apply to some existing staff and future hires who would work digitally. As it turns out, the Chief Executive Officer is not one of those roles.
Speaking to CNBC, a Starbucks spokesperson confirmed that Niccol will be expected to be in the Seattle office at least three days per week. “His schedule will exceed the hybrid work guidelines and workplace expectations we have for all partners,” they explained.
To make this impractical 1,000-mile journey a reality, the company will offer him the use of a private jet. Suffice to say, many people are justifiably unhappy.
There’s the obvious sustainability factor. While ‘supercommuting’ has become an increasingly popular trend as workers aim to benefit from low-cost neighborhoods while coping with expectations for in-office work, many people have been quick to point out that racking up thousands of airmiles per week is hardly good for the environment. A 2021 study found private jets are 14 times more polluting per passenger than commercial planes.
Starbucks, according to its website, has a “multi-decade commitment to reduce our carbon, our water and our waste footprints by half by 2030.” While Niccol’s air travel may be a drop in the ocean compared to its overall footprint, the CEO's Carbon-heavy supercommute hardly sets the tone for the rest of organization and its employees.
As one disgruntled individual wrote on X: “Absolutely wild that it cost $85 million in cash/stock to pry this guy from Chipotle and then they’ll just let him thrash the environment to commute 1000 miles 3 times a week on a corporate jet instead of having him move to the PNW,” meaning the Pacific Northwest.
Starbucks (and others) still haven’t figured out flexible working
The user makes a good point. If Starbucks is so hell-bent on implementing a firm hybrid working mandate, why spend all that money on compensation – up to four times that of predecessor Laxman Narasimhan – on someone who lives 1,000 miles away?
Granted, good CEOs are not always easy to find, but for $113million you’d hope to get a CEO who could pop into the office for a last-minute meeting without having to take to the skies.
Or, if Starbucks is happy to offer that kind of model to Niccol, how are other employees effectively forced into relocating to fulfill their hybrid working mandate meant to feel?
It certainly feels like Starbucks’ board was desperate to get their man and had to find a quick workaround to comply with the strict return-to-office policy. No doubt one or two members of Starbucks’ finance, logistics, and sustainability departments will have been left frustrated to have their hands tied by 2023’s strict RTO mandate.
Starbucks isn’t alone in dealing with challenges brought about by hybrid working policies. The likes of Amazon, Dell, and Salesforce have similarly shared struggles with successfully implementing return-to-office mandates, ranging from employee disengagement and ‘coffee-badging’ to accusations of quiet firing.
While some employers may feel that return-to-office mandates can bring about collaboration, creativity, and in-person connection – or more candidly, bring back control – it's evident that abandoning flexible work is creating more headaches for HR than employers expected.
And for Starbucks, choosing to fly its new CEO 1,000 miles by private yet multiple times a week may well be one of those headaches. Who could have seen that coming?
