Starbucks is creating waves by allocating $250,000 per year for its new CEO Brian Niccol to commute from his home in Newport Beach, California, to company headquarters in Seattle in company aircraft. According to the company’s “offer letter” to the former Chipotle top executive, quoted in an article in Nation’s Restaurant News, and which was publicly submitted to the U.S. Securities and Exchange Commission, “You agree to commute from your residence to the company headquarters (and engage in other business travel) as is required to perform your duties and responsibilities.” The letter further provides that Niccol, who was recently named to the high-profile Starbucks CEO slot, will be eligible to use company aircraft (a pair of Gulfstream G550s) “up to a maximum amount of $250,000 per year, which amount will be based on the aggregate incremental cost to the company.” The quarter-million-dollar allowance also includes some personal travel, according to the offer letter.
I think your numbers are wrong. Not that it makes much difference, but $12 per mile has to be for 400 hours, not 200, for exactly the fixed cost reasons you incorrectly attribute.
You have it backwards: they can afford to offer their new CEO such a package because so many folks are willing to pay $6 for a cup of over-roasted coffee. Frankly, with all the commuting days on the road, and performance pressure, that base of $1.6M wouldn’t tempt me. BT/DT for nearly a decade before my wife’s career forced the issue, resulting in a smaller salary, a bazillion unused FF miles, and a lot less stress.
I started drinking SB coffee at the start of that new phase in my career, because there was always a SB on the ground floor of every office building I worked in, and they were a known (if over-roasted) quantity. These days, there are quite a few better alternatives available in any metro area. Niccol will shake things up a little, which may be reflected in next year’s earnings report, and he may get his bonuses, but there are too many better coffee alternatives now, than when I was traveling.
Having a CEO that is not willing to move to/live near company HQ is not a good sign. Shows lack of engagement with the company that they are CEO of. I’ve seen it before, it usually does not work out well in the long term.
Those are large planes with plenty of seats and other flights he is not on for others to participate in the fixed costs. Its probable the per mile charges they are going to ding him will be much less than he needs to ensure getting to work and back on the 250K.
Like everything else in corporations, it is just the optics that count. $250,000 is a number they thought shareholders and climate advocates would accept. Creative bookkeeping will ensure he will not be pedalling a skateboard or rubbing elbows with blue collars to get to work.