Luring a CEO from another company to execute a turnaround is pretty expensive.
Starbucks announced on Wednesday that it would offer new CEO Brian Niccol, 50, roughly $113 million in total compensation including a $10 million sign-on bonus, a $75 million equity grant, and, starting in fiscal 2025, a grant that could be worth $23 million per year. That’s on top of Niccol’s annual $1.6 million salary and an annual cash bonus that could range from $3.6 million to $7.2 million, depending on Niccol’s performance.
To boot, Niccol’s offer letter states he won’t be required to relocate to the company’s headquarters in Seattle, although he agreed to commute from his residence as necessary. Chipotle Mexican Grill is headquartered in Newport Beach, Ca. Until he gets permanent secondary housing in Seattle, Starbucks agreed to cover the cost of any temporary housing arrangements and a personal chauffeur to drive Niccol around Seattle. Starbucks also promised him it would establish a small remote office in Newport Beach, on Starbuck’s dime. He can also use Starbucks’ plane to travel between his house and HQ, and his primary office will be in Seattle, the company said.
"Brian Niccol has proven himself to be one of the most effective leaders in our industry, generating significant financial returns over many years," said a Starbucks spokesperson in a statement to Fortune. "His compensation at Starbucks is tied directly to the company’s performance and the shared success of all our stakeholders. We’re confident in his ability to deliver long-term, enduring value for our partners, customers and shareholders.”
Niccol is replacing departing CEO Laxman Narasimhan, who led the macchiato maker for 17 months and oversaw a share price decline of 23.9%. That led to a disappointing $32 billion drop in market cap.
Much of Niccol’s compensation from Starbucks is intended to replace the pay he’s leaving behind at Chipotle, the burrito-bowl restaurant empire he’s led for the past six years. At Chipotle, Niccol drove stock price growth of 800% and saw profits increase nearly sevenfold, said Starbucks in a statement. The board at the coffee giant is hoping he can bring the same growth to the struggling chain.
During the pandemic, Starbucks pivoted to remote work for office employees. Three years on, founder Howard Schultz asked employees within commuting distance to start coming to work a minimum of three days per week. At the time, Schultz said that remote work had “unintended consequences” and that the company could lose the art of collaboration and a connection to its shared mission.
In addition to a perk of up to $250,000 in personal travel on the corporate jet, Niccol will get access to Starbucks’ executive physical program. However, as is customary at Starbucks, he will now be prohibited from trading in coffee and dairy futures.
This story was originally featured on Fortune.com