Starbucks CEO Kevin Johnson speaks during the company’s annual shareholder meeting at WAMU Theater, on March 20, 2019 in Seattle, Washington.
Stephen Brashear | Getty Images
Starbucks Shareholders turned down the coffee chain’s executive compensation offer, in a rare warning to the S&P 500.
The decision is non-binding and may not affect the board’s decision. However, the Wall Street Journal, Who first broke the news, said that only 10 companies in the S&P 500 index rejected shareholders annual opinion decisions on pay in the past year, based on data from ISS Corporate Solutions.
The proposal included paying CEO Kevin Johnson $ 1.86 million for the fiscal year 2020 performance that the company survived Coronavirus pandemic And $ 50 million in retention wages if he continues to work during fiscal year 2022.
“The Board of Directors unanimously endorsed the performance-based retention bonuses given to our executives in late 2019,” Ulta’s board member and CEO, Mary Dillon, said in a statement to CNBC. “This award – obtained through the company’s exceptional performance over a period of time – aligns with our commitment to creating shareholder value and our ‘pay for performance’ philosophy.”
In 2020, 84% of Starbucks shareholders voted in favor of the payment decision.
Prior to the shareholder meeting, Institutional Shareholder Services, which manages ISS Corporate Solutions, and Glass Lewis recommended that shareholders turn down the incentive plan for performance from October 2019 through September 2022. Both companies disagreed with Starbucks’ logic for one-time cash bonuses awarded to CEO Kevin Johnson and former CEO Operations Rose Brewer. Brewer lost her cash award when she left the company in February to serve as CEO for Walgreens Boots Alliance.
The ISS wrote that it was concerned about the frequency of the one-time awards and that Starbucks had not provided an adequate explanation as to why the long-term prize was distributed in cash.
Starbucks Corporation said in a dossier asking shareholders to agree to the decision that the final payment for the cash prize will not be known until fiscal year 2022. The company also indicated that the market value of Starbucks has increased by $ 39 billion since Johnson became CEO in 2017.
Starbucks shares are down about 1.5% in morning trade Thursday. The stock is up 92% over the past year, giving it a market value of $ 128 billion.
“Organizer. Social media geek. General communicator. Bacon scholar. Proud pop culture trailblazer.”