Beautiful Virgin Islands

Monday, Jun 30, 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
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
OpenAI Secures Multimillion-Dollar AI Contracts with Pentagon, India, and Grab
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Elon Musk Critiques Senate Budget Proposal Over Job Losses and Strategic Risks
Los Angeles Riots ended with Federal Investigations into Funding
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Education Secretary Announces Overhaul of Complaints System Amid Rising Parental Grievances
Massive Anti-Government Protests Erupt in Belgrade
Trump Ends Trade Talks with Canada Over Digital Services Tax
UK Government Softens Welfare Reform Plans Amid Labour Party Rebellion
Labour Faces Rebellion Over Disability Benefit Reforms Ahead of Key Vote
Jeff Bezos and Lauren Sánchez Host Lavish Wedding in Venice Amid Protests
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
North Korea to Open New Beach Resort to Boost Tourism Economy
UK Labour Party Faces Internal Tensions Over Welfare Reforms
Andrew Cuomo Hints at Potential November Comeback Amid Democratic Primary Results
Curtis Sliwa Champions His Vision for New York City Amid Rising Crime Concerns
Federal Reserve Proposes Changes to Capital Rule Affecting Major Banks
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Trump Escalates Criticism of Media Over Iran Strike Coverage
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
Big Four Accounting Firms Fined in Exam Cheating Scandal
NATO Members Agree to 5% Defense Spending Target by 2035
Australia's Star Casino Secures $195 Million Rescue Package Amid Challenges
UK to Enhance Nuclear Capabilities with Acquisition of F-35A Fighter Jets
Russian Shadow Payments via Cryptocurrency Reach $9 Billion
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Airlines Evaluate Flight Cancellations Amid Escalating US-Iran Tensions
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
×