Brian Niccol, CEO of Chipotle
Anjali Sundaram | CNBC
Starbucks offered new CEO and Chairman Brian Niccol a salary increase and large one-time bonuses to lure him from his previous role as chief executive at Chipotle Mexican Grill.
Niccol officially took the helm of the struggling coffee chain on September 9. As CEO, he will be tasked with turning around the company’s declining sales, improving the in-store customer experience, and finding a solution to its struggling business in China. It’s a big job — and he’ll be well compensated.
Starbucks disclosed Niccol’s upcoming pay plan in a filing Wednesday. The bulk of his compensation package consists of equity that will vest over time and is based on company performance targets and other metrics. In the first year, if the company hits its targets, his pay package could be worth as much as $116.8 million.
Niccol will be paid a base salary of $1.6 million a year, with the opportunity to earn up to $7.2 million in additional cash. He will also be eligible for annual stock awards worth up to $23 million.
And when he leaves Chipotle, Niccol will receive a $10 million bonus and $75 million in equity to make up for what he’s giving up by leaving the burrito chain. The equity will vest over a three-year period, based on the company’s performance and Niccol’s tenure.
“Brian Niccol has proven to be one of the most effective leaders in our industry, generating significant financial returns over many years,” Starbucks said in a statement. “His compensation at Starbucks is directly tied to the performance of the company and the collective success of all of our stakeholders. We are confident in his ability to deliver long-term, sustainable value for our partners, customers and shareholders.”
At Chipotle, Niccol earned a base salary of $1.3 million last year, with total compensation of $22.5 million. Stock and options awards made up the bulk of his income, but he also received a cash bonus of $5.2 million.
During his time at Chipotle, the stock increased 773%, increasing the value of his total income.
Niccol’s pay package is also more generous than that of his ousted predecessor, Laxman Narasimhan. According to the filing, his base salary is $1.3 million, with a potential cash bonus of up to $5.85 million and stock awards of $13.6 million. Narasimhan’s compensation for fiscal 2023 is estimated at $14.6 million, mostly from stock awards.
Unlike Narasimhan, who was previously based in the UK, Niccol will not have to relocate to Starbucks’ Seattle headquarters.
— CNBC’s Kate Rogers contributed to this report
