Brian Niccol, the CEO of Chipotle, has replaced Starbucks’ now-former CEO Laxman Narasimhan. The coffee chain will be paying the new boss $113 million, and he can work from home, according to The Wall Street Journal and Fortune. As a result of the CEO change, Starbucks’ shares increased and Chipotle’s stock decreased.
Since Narasimhan’s departure is effective immediately, acting Starbucks CFO, Rachel Ruggeri, is the interim chief executive until Niccol officially stars the job on September 9.
Despite being one of the most successful coffee companies in the world, Starbucks has struggled financially this year. Same-store sales have declined in its largest markets, the U.S. and China, according to CNBC.
Narasimhan assumed the position of CEO in March 2023, replacing former Starbucks boss, Howard Schultz. Schultz, at the time, chose Narasimhan to be his successor.
WOW
Starbucks just stole Chipotle's CEO
Laxman Narasimhan is out
Brian Niccol is in pic.twitter.com/CawH1RnuUi
— Morning Brew ☕️ (@MorningBrew) August 13, 2024
Earlier this year, Schultz wrote an open letter on LinkedIn about the company’s financial state. Though he did not mention Narasimhan by name, he offered the chain some advice, noting that “senior leaders — including board members — need to spend more time with those who wear the green apron,” referring to baristas in each store.
“One of their first actions should be to reinvent the mobile ordering and payment platform — which Starbucks pioneered — to once again make it the uplifting experience it was designed to be,” Schultz wrote in May. “The go-to-market strategy needs to be overhauled and elevated with coffee-forward innovation that inspires partners, and creates differentiation in the marketplace, reinforcing the company’s premium position. Through it all, focus on being experiential, not transactional.”
While pointing out that he is “no longer” on “the Starbucks board of directors” and has had “no formal role within the company since April 2023,” Schultz pointed out that his “love of the company and all those who wear ‘the cloth of the company’ — the iconic green apron — knows no bounds.”
“I, too, experienced some quarters of financial disappointment in my four-plus decades leading Starbucks,” he continued. “Ask any public-company CEO, and they will tell you that ‘a miss’ is virtually inevitable, even at the best-managed, fastest-growing firms.”
Toward the end of his letter, Schultz clarified that he was “certain” that Starbucks “would recover” from the financial slump, noting that it “created an industry that did not exist.”
“The brand is one of the most recognized and respected in the world,” he added. “I am confident the China business will return to health and become the company’s largest market. The brand is incredibly resilient, but it’s clearly not business as usual.”