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Starbucks is facing renewed criticism after Vermont Senator Bernie Sanders condemned the company's decision to pay CEO Brian Niccol approximately $96million for four months of work in 2023.
Sanders criticized the pay package in an online post, contrasting it with union workers' ongoing struggle for improved wages.
"If you’re the Starbucks CEO you get $96 million for four months of work including a $5 million bonus," Sanders wrote. "If you’re a Starbucks union worker, the CEO is refusing to give you a decent raise to pay rent and buy groceries. Starbucks must end its greed & negotiate a fair union contract."
Details of Niccol's pay package
Niccol, who joined Starbucks in September after leaving his role as CEO at Chipotle Mexican Grill, secured one of the most lucrative pay deals in corporate America. The majority of his package, some 94%, came in the form of stock awards linked to performance, with the rest scheduled over three years. Starbucks also paid Niccol a $5 million sign-on bonus just one month after he started.
The company's decision to hire Niccol followed a period of declining sales, with Starbucks hoping his leadership would reverse its fortunes.
The coffee chain also agreed to cover Niccol's temporary housing and travel expenses, spending over $143,000 on accommodation-related costs, including taxes. Niccol's travel between Southern California and Starbucks' Seattle headquarters cost the company approximately $72,000 in flights, while personal use of corporate aircraft accounted for an additional $19,000.
Bloomberg reported that Niccol’s total compensation package was initially valued at around $113million, largely due to stock awards designed to replace benefits he forfeited when departing Chipotle. The figure places him among the top 20 highest-paid CEOs in the United States.
Union dispute escalates amid pay controversy
While Starbucks justified Niccol’s compensation by describing him as a "highly sought-after, effective leader" with the skills to restore growth, tensions with its unionized workforce remain unresolved.
Starbucks employees across the country have been advocating for improved wages and benefits. Workers argue that rising company profits should result in fairer pay and better conditions. Sanders, a longstanding supporter of union rights, has called on Starbucks to prioritize worker concerns and reach a fair labor agreement.
The dispute reflects ongoing concerns about executive pay disparities, particularly when organizations face labor disputes.
With the high profile former Democratic leadership candidate Sanders urging Starbucks to engage in fair contract negotiations, the company's handling of employee relations is once again under the spotlight.
