Starbucks names Chipotle chief Brian Niccol as new CEO
Niccol will take over on Sept. 9
Starbucks announced on Tuesday that it is replacing CEO Laxman Narasimhan with Chipotle chief Brian Niccol, marking the coffee giant's fourth chief executive in two years.
Niccol will take over as CEO of the coffee chain starting Sept. 9 following his six-year stint at Chipotle.
Narasimhan, who was tapped to take over for interim CEO Howard Schultz in March 2023, is also stepping down from Starbucks' board effective immediately.
SUPREME COURT SIDES WITH STARBUCKS IN CASE OVER FIRED PRO-UNION WORKERS
Chipotle CEO Brian Niccol. (Chipotle Mexican Grill / Fox News)
Starbucks Chief Financial Officer Rachel Ruggeri will serve as interim CEO during the transition period. Mellody Hobson, Starbucks board chair, will also become lead independent director, Starbucks said.
The company's abrupt changes come as it contends with pressure from unionization campaigns across the nation. The company also faced back to back disappointing fiscal quarters as traffic declined.
After former CEO Kevin Johnson stepped down in March 2022, Howard Schultz, who had served as chief executive from 1986 to 2000 and again from 2008 to 2017, temporarily took over while the company searched for Johnson's permanent replacement. Narasimhan was named incoming CEO in September 2022 before taking over in the spring of 2023.
The board credited Narasimhan with improving the Starbucks partner experience, driving significant innovation in the supply chain, and enhancing store operations.
But the company faced pressure from activist investors to improve its position in the market. Schultz posted on social media in May that the coffee giant needed to undergo a strategic overhaul after its earnings "significantly" fell short of shareholder expectations.
STARBUCKS' 'FALL FROM GRACE': HOWARD SCHULTZ SAYS COMPANY NEEDS TO FIX US OPERATIONS
"I have emphasized that the company’s fix needs to begin at home: U.S. operations are the primary reason for the company’s fall from grace," Schultz said in the LinkedIn post.
CEO of Starbucks Howard Schultz backstage with soon to be Starbucks CEO Laxman Narasimhan at Starbucks Headquarters during Investor Day in Seattle, Washington Tuesday September 13, 2022. (Melina Mara/The Washington Post via Getty Images / Getty Images)
The Starbucks board commended Niccol, who took over as Chipotle's CEO in 2018, for being a "culture carrier who brings a wealth of experience and a proven track record of driving innovation and growth."
"Like all of us at Starbucks, he understands that a remarkable customer experience is rooted in an exceptional partner experience," Hobson said. "Our board believes he will be a transformative leader for our company, our people, and everyone we serve around the world."
Under Niccol's leadership, Chipotle's revenue nearly doubled, profits increased nearly sevenfold and the stock price has increased by nearly 800%, according to Starbucks.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Starbucks
Shares of Starbucks surged on the news, marking its biggest gain on record.
Meanwhile, Chipotle stock slipped as the company shifted its leadership to fill Niccol's role. Chipotle's board appointed Chief Operating Officer Scott Boatwright as interim CEO.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CMG | CHIPOTLE MEXICAN GRILL INC. | 54.29 | +0.61 | +1.14% |
Boatwright and the rest of the "leadership team will continue to execute the company's strategic plan without interruption," Chipotle said.