Starbucks Ties Executive Pay to 2025 Diversity Targets
October 14 2020 - 9:29AM
Dow Jones News
By Heather Haddon
Starbucks Corp. said it would mandate antibias training for
executives and tie their compensation to increasing minority
representation in its workforce, becoming the latest company to set
fresh diversity goals in the midst of a national conversation over
race.
The coffee chain said Wednesday that it would aim for at least
30% of its U.S. corporate employees -- and 40% of its U.S. retail
and manufacturing employees -- to be people of color by 2025.
Company figures show it currently falls short of those goals at
nine of the 14 job levels it said it would track. The company has
roughly 200,000 U.S. employees and nearly 8,900 company-owned
stores in the U.S.
"They aren't slam dunks," Starbucks Chief Operating Officer Roz
Brewer said of the new targets in an interview. "They are going to
take some work."
Starbucks is implementing the diversity goals and training at a
time of intense discussion about race and representation in
American corporations. Unrest during the summer after George Floyd
was killed in police custody in Minneapolis rekindled a national
conversation over race during which some companies pledged to make
their workforces more diverse.
The Trump administration is discouraging companies with federal
contracts from issuing specific diversity-related targets or
conducting racial-sensitivity training. The Wall Street Journal
reported last week that the Labor Department is investigating
companies with federal contracts that have included specific
numerical goals in their pledges to increase diversity. The White
House has said it would consider canceling contracts with companies
that violate an executive order barring federal grant recipients
from conducting diversity training.
The executive order has caused confusion among businesses with
federal contracts and prompted some pushback from some private
companies.
Starbucks, the world's largest coffee company by sales and
stores, is a federal contractor.
Ms. Brewer said the company was aware of the executive order
that is set to take effect next month and would implement the
targets and training regardless. She said all Starbucks employees
would benefit from being part of a more-diverse workforce.
"It's not impacting our path forward," Ms. Brewer said of the
executive order. "We understand some of the controversy around it,
but it's who we are. We are committed to it."
Starbucks has navigated controversy over race at other times in
recent years.
In 2018, the arrest of two Black men who were sitting at a table
in one of Starbucks' Philadelphia locations sparked protests. Chief
Executive Kevin Johnson apologized for the arrests, and the chain
closed its U.S. corporate stores for a day to conduct antibias
training. This June Starbucks made T-shirts bearing the "Black
Lives Matter" slogan available to employees after initially
directing employees to not display the slogan on their persons at
work.
Ms. Brewer said the new staffing goals arose from an assessment
of the company's diversity levels following the arrests at the
Philadelphia store. The company found that it had to do more to
help employees from diverse backgrounds rise through the ranks, she
said.
"People of color want to be seen, and they want to be heard,"
she said.
Starbucks said it would publicize progress toward its diversity
goals annually. Executive compensation for employees at the level
of senior vice president and above would be determined in part by
diversity metrics, the Seattle-based company said. It didn't say
exactly how compensation would be linked to the metrics.
The company said it would also offer an executive mentoring
program for employees of color starting this year and include
antibias materials in hiring, development and performance
assessments.
Ms. Brewer, who is Black, said she wished she had such
mentorship earlier in her career. "I can only imagine back in my
own personal career if I had that opportunity," she said.
Write to Heather Haddon at heather.haddon@wsj.com
(END) Dow Jones Newswires
October 14, 2020 09:14 ET (13:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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