Beautiful Virgin Islands

Monday, Sep 01, 2025

Starbucks shareholders reject CEO pay proposal in rare move

Starbucks shareholders reject CEO pay proposal in rare move

Starbucks shareholders voted against the company's CEO pay proposal in a rare move that may indicate some shareholders think the chief executive is overpaid.
The news was first reported by the Wall Street Journal following Starbucks' annual shareholder meeting. Starbucks confirmed the results of the vote to CNN Business.

Starbucks CEO Kevin Johnson earned a $1.86 million bonus in fiscal year 2020 in addition to a larger retention award, designed to keep Johnson in the position through fiscal year 2022, according to Starbucks' proxy statement.

"The board unanimously supported the performance-based retention rewards granted to our executives in late 2019," said Starbucks board member and Ulta Beauty CEO Mary Dillon in a statement responding to the vote.

Companies seek non-binding approval on executive compensation from shareholders through so-called "say-on-pay" proposals outlined in proxy statements each year. Because the proposal is not binding, companies don't need to make any changes based on the outcome of the vote. But companies are legally required to allow investors to vote on compensation.

Generally, "it is pretty rare for the 'say-on-pay' proposals not to be approved," said Kai Liekefett, a partner at Sidley Austin law firm who specializes in executive pay and corporate governance.

When investors signify they think executives are overpaid, it may signal underlying shareholder unrest, he said. Shareholders typically "don't mind executives making a lot of money, as long as the performance is outstanding," Liekefett said.

This time, shareholders were likely swayed by the guidance of Institutional Shareholder Services and Glass Lewis, two influential proxy advisory firms that provide guidance on how investors should vote on proposals to ensure the best possible returns, and often effectively dictate how investors vote.

ISS recommended that shareholders vote against the proposal, arguing that the rationale justifying the value of Johnson's compensation package is "insufficient considering the exceedingly large target and maximum opportunities under the award," and given that Johnson earned a special performance award the previous year. Glass Lewis, also recommended shareholders vote against the proposal, saying that Starbucks "paid [its CEO] moderately more than its peers, but performed worse."

ISS has recommended shareholders vote against compensation packages for approximately 12% of companies each year for the past decade, according to an analysis published in March by Compensation Advisory Partners, a consulting firm specializing in executive and director compensation. The report found that in about 96% of cases when most shareholders voted against an executive pay proposal, the ISS had advised to vote in that manner.

Starbucks said in response to the guidance that "we respectfully disagree," with the recommendations, saying that the award reflects the value Johnson has brought to the company and is designed to keep him in the role through at least fiscal year 2022, while the company executes its rapid growth agenda. The company has recently lost two high-ranking officials: former COO Rosalind Brewer, who just took the helm at Walgreens, and Patrick Grismer who recently stepped down as chief financial officer.

Shareholders ultimately decided to go with the recommendation issued by the advisories and voted down Johnson's proposed compensation package.

Though Starbucks is not required to make any changes, it should take shareholder sentiment into account as it considers how to structure executive pay moving forward, said Liekefett. Investors may feel "alienated if a board does not appear to be responsive ... to the criticism," he said. That could ultimately lead to advisories voting against director nominations, or invite an activist shareholder to take a stake in the company.

Starbucks intends to better understand what happened, Dillon noted.

"Our board and management team will continue to engage with investors in the months ahead to understand their perspectives as part of our ongoing evaluation of our executive compensation programs," she said.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Chinese and Indian Leaders Pursue Amity Amid Global Shifts
European Union Plans for Ukraine Deployment
ECB Warns Against Inflation Complacency
Concerns Over North Cyprus Casino Development
Shipping Companies Look Beyond Chinese Finance
Rural Exodus Fueling European Wildfires
China Hosts Major Security Meeting
Chinese Police Successfully Recover Family's Savings from Livestream Purchases
Germany Marks a Decade Since Migrant Wave with Divisions, Success Stories, and Political Shifts
Liverpool Defeat Arsenal 1–0 with Szoboszlai Free-Kick to Stay Top of Premier League
Prince Harry and King Charles to Meet in First Reunion After 20 Months
Chinese Stock Market Rally Fueled by Domestic Investors
Israeli Airstrike in Yemen Kills Houthi Prime Minister
Ukrainian Nationalist Politician Andriy Parubiy Assassinated in Lviv
Corporate America Cuts Middle Management as Bosses Take On Triple the Workload
Parents Sue OpenAI After Teen’s Death, Alleging ChatGPT Encouraged Suicide
Amazon Faces Lawsuit Over 'Buy' Label on Digital Streaming Content
Federal Reserve Independence Questioned Amid Trump’s Push to Reshape Central Bank
British Politics Faces Tumultuous Autumn After Summer of Rebellions and Rising Farage Momentum
US Appeals Court Rules Against Most Trump-Era Tariffs
UK Sought Broad Access to Apple Users’ Data, Court Filing Reveals
UK Bank Shares Dive Over Potential Tax on Sector
Germany’s Auto Industry Sheds 51,500 Jobs in First Half of 2025 Amid Deepening Crisis
Bruce Willis Relocated Due to Advanced Dementia
French and Korean Nuclear Majors Clash As EU Launches Foreign Subsidy Probe
EU Stands Firm on Digital Rules as Trump Warns of Retaliation
Getting Ready for the 3rd Time in Its History, Germany Approves Voluntary Military Service for Teenagers
Argentine President Javier Milei Evacuated After Stones Thrown During Campaign Event
Denmark Confronts U.S. Diplomat Over Covert Trump-Linked Influence in Greenland
Starmer Should Back Away from ECHR, Says Jack Straw
Trump Demands RICO Charges Against George Soros and Son for Funding Violent Protests
Taylor Swift Announces Engagement to NFL Star Travis Kelce
France May Need IMF Bailout, Warns Finance Minister
Chinese AI Chipmaker Cambricon Posts Record Profit as Beijing Pushes Pivot from Nvidia
After the Shock of Defeat, Iranians Yearn for Change
Ukraine Finally Allows Young Men Aged Eighteen to Twenty-Two to Leave the Country
The Porn Remains, Privacy Disappears: How Britain Broke the Internet in Ten Days
YouTube Altered Content by Artificial Intelligence – Without Permission
Welcome to The Definition of Insanity: Germany Edition
Just a reminder, this is Michael Jackson's daughter, Paris.
Spotify’s Strange Move: The Feature Nobody Asked For – Returns
Manhunt in Australia: Armed Anti-Government Suspect Kills Police Officers Sent to Arrest Him
China Launches World’s Most Powerful Neutrino Detector
How Beijing-Linked Networks Shape Elections in New York City
Ukrainian Refugee Iryna Zarutska Fled War To US, Stabbed To Death
Elon Musk Sues Apple and OpenAI Over Alleged App Store Monopoly
2 Australian Police Shot Dead In Encounter In Rural Victoria State
Vietnam Evacuates Hundreds of Thousands as Typhoon Kajiki Strikes; China’s Sanya Shuts Down
UK Government Delays Decision on China’s Proposed London Embassy Amid Concerns Over Redacted Plans
A 150-Year Tradition to Be Abolished? Uproar Over the Popular Central Park Attraction
×