Morning Chronicle - Howard Schultz returns to Starbucks as interim leader, Johnson exits

Kevin Johnson, who has led the coffee giant since 2017, plans to retire next month, the company said, adding it expects to name a new CEO by the fall.

Johnson told the board a year ago that he was considering retiring in the wake of the upheaval of the pandemic, calling the decision "a natural bookend to my 13 years with the company," according to a Starbucks press release.

Schultz, who first joined the company in 1982, grew Starbucks from a small Seattle coffee chain into a global juggernaut in two earlier stints as CEO.

Schultz also flirted with running for the US presidency in 2020, but ultimately opted against seeking office. His real-time wealth is $4 billion, according to a Forbes list of the richest people in the world.

"When you love something, you have a deep sense of responsibility to help when called," Schultz said. "Although I did not plan to return to Starbucks, I know the company must transform once again to meet a new and exciting future where all of our stakeholders mutually flourish."

Shares of the coffee chain rocketed higher Wednesday, even as union leaders expressed misgivings about Schultz.

- 'Reputational risk' -

The shakeup comes at a tricky time for Starbucks as it faces a wave of unionization campaigns that has spread to more than 100 US stores after workers at two upstate New York cafes voted to form a union in December.

The issue poses challenges for the chain, which has been viewed as a friendly company by many political progressives in the United States over its stances on gay marriage, the environment and other issues.

But Starbucks' tactics to discourage workers from unionization poses "reputational risk," shareholder activists argued in a letter sent to Johnson and Starbucks Chair Mellody Hobson ahead of the company's annual meeting later Wednesday.

Highlighting "alleged retaliatory termination and continued captive audience meetings," the group urged Starbucks to "publicly commit to a global policy of neutrality," said Trillium Asset Management, Parnassus Investments and other Starbucks shareholders who manage some $3.4 trillion in assets.

News of Schultz' reinstatement drew a cool response from Starbucks Workers United, which referred to the executive as a "leader in Starbucks' anti-union campaign," and urged him "to put union-busting behind him and embrace Starbucks' unionized future."

Ahead of the union vote, Schultz visited Buffalo in November to try to persuade workers against voting for the group.

In a letter to workers titled "From Buffalo with love," Schultz highlighted Starbucks' benefits for workers, including health care and free college tuition, saying he was "saddened and concerned" that workers felt outside representation was needed.

But on December 9, staff at two Buffalo cafes voted with Starbucks Workers United. Since that time, additional Buffalo-area shops have also voted with the group, along with a cafe in Mesa, Arizona.

Shares of Starbucks surged 7.9 percent to $89.69 in early trading.

M.Bancroft--MC-UK