BACKGROUND OF THE SOLICITATION
The summary below details the significant communications and interactions between representatives of Starbucks and representatives of the SOC Group in connection with the SOC Group’s nomination of three individuals for election to the Starbucks board at the Annual Meeting. This summary does not purport to catalogue every conversation of or among members of the board, Starbucks management, Starbucks advisors, and representatives of the SOC Group and their advisors relating to the SOC Group’s solicitation.
Starbucks overall business strategy is designed to position Starbucks for sustainable, profitable growth to the benefit of its shareholders and other stakeholders including its partners and customers. The board continuously evaluates, with the Starbucks senior management team, Starbucks overall business strategy, key market opportunities, customer trends, competitive developments, partner relations, and future growth opportunities. The board applies a holistic approach in evaluating Starbucks business strategy with the goal of providing a balanced and comprehensive perspective for the benefit of Starbucks shareholders, partners, customers, and other stakeholders. This evaluation is also informed by, and reflects feedback from, our partners as well as our year-round shareholder outreach program, in which Starbucks solicits feedback from shareholders on a variety of topics, including the Company’s corporate governance, executive compensation program, disclosure practices, environmental and social impact programs, and stakeholder promises.
Our partners are—and always have been—core to Starbucks overall business strategy, which is why our company, under the direction of the board, has made, and continues to make, significant investments in our partners.
These investments have led to a more consistent partner experience in Starbucks-operated stores across the U.S. Coupled with higher wages and the expansion of hours, these investments have not only resulted in lower turnover and more meaningful improvement in our customer connection scores year-over-year, but have also nearly doubled hourly total cash compensation for partners since fiscal year 2020.
In September 2022, we launched our Reinvention Plan to reset our business for even greater long-term success. The focus of our Reinvention Plan is to elevate the experiences in our stores for our partners and, through our partners, for our customers.
We’re proud of the work we’re doing as part of the Reinvention Plan. To date:
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We are making approximately $1 billion in investments to improve the U.S. retail partner experience by providing partners with wage increases, additional training, and new benefits. We are also making substantial investments in equipment and technology to improve the in-store experience of our partners. |
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We offer competitive pay – Starbucks provides U.S. hourly retail partners an average wage of $17.50 per hour and our barista wage range is between $15 and $24 per hour for a total compensation, with benefits, of approximately $27 per hour. Starbucks moved the wage floor for all U.S. retail hourly partners to $15 per hour in 2022, and has continued to add incremental increases, while recognizing and rewarding tenure. |
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We offer multiple training opportunities, including the Coffee Master Program, doubled training hours for new baristas and shift supervisors, and added quarterly foundational training for all partners. |
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According to the results of a recent Benefit Index analysis conducted by Aon, Starbucks continues to deliver more valuable benefits for retail hourly partners than any of the more than 50 other U.S. companies included in the study, inclusive of Fortune 200 and Fortune 500 companies. |
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Equity ownership in Starbucks through annual grants via Bean Stock (our broad-based equity program for partners) have awarded more than $2 billion in additional pre-tax earnings to partners. |
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We are broadening health insurance options, providing free college tuition through the Starbucks College Achievement Plan (SCAP) with Arizona State University, offering financial well-being benefits, and providing mental health services at no cost. Nearly 25,000 partners are currently enrolled in the SCAP program, and 12,000 have graduated. |
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On November 2, 2023, Starbucks built on the execution of its long-term growth strategy with the announcement of the Triple Shot Reinvention with Two Pumps Plan, which is a comprehensive strategy designed to deliver value to our shareholders, partners, customers, and other stakeholders, with a focus on reinvigorating partner culture. |
In August 2021, Starbucks was informed by partners at locations in the Buffalo, New York market that they were seeking to be represented by a union. As reflected in the FOA/CB Assessment (defined and described below), “what Starbucks initially assumed was isolated activity in a particularly troubled market turned out to be the start of a well-coordinated organizing campaign.” This effort has been coordinated by Workers United, an affiliate of the Service Employees International Union (“SEIU”). By October 2023, approximately 500 total petitions for union representation had been filed with the National Labor Relations Board (“NLRB”) in relation to Starbucks stores located in the United States.
Starbucks has engaged in negotiations with labor organizations certified to represent partners in North American Starbucks-operated stores, including Workers United, the International Brotherhood of Teamsters, and the United Steelworkers. Starbucks has consistently proposed that contract bargaining sessions comply with all labor laws and be conducted in person, as in-person bargaining has long been recognized by the NLRB as the most effective and efficient means to reach agreement. Workers United has not agreed to attend many of the proposed bargaining sessions, insisting that virtual participation be a pre-condition to bargain.
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STARBUCKS 2024 PROXY |
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PROXY SUMMARY |
On September 1, 2022, Starbucks announced that Laxman Narasimhan would become Starbucks next ceo following a six-month immersion program pursuant to which, among other things, he visited stores, trained and worked as a barista, visited manufacturing plants and coffee farms, and engaged with partners.
On September 13, 2022, at Starbucks 2022 Investor Day, Starbucks provided an in-depth review of its recently announced Reinvention Plan, which contemplated targeted investments in partners, customers, and stores to enhance store sales and store count growth and expand margins. As a core part of this plan, Starbucks also introduced various initiatives to improve the partner experience, including expanded tipping, new well-being benefits, investments in store managers, such as new leadership trainings, and investments in equipment and technology designed to improve the partner experience.
On March 20, 2023, Starbucks announced, effective on such date, that Mr. Narasimhan had assumed the role of ceo.
On March 23, 2023, as part of the board’s ongoing refreshment process, each of Isabel Ge Mahe, Clara Shih, and Joshua Cooper Ramo were not renominated for election at the 2023 Annual Meeting. At the 2023 Annual Meeting on March 23, 2023, Beth Ford and Mr. Narasimhan were each elected to the board.
At the 2023 Annual Meeting, proponents of a shareholder proposal (the “assessment proposal”) requested that the board commission and oversee an independent, third-party assessment of Starbucks adherence to its stated commitment to workers’ freedom of association and collective bargaining rights (such requested assessment, the “FOA/CB Assessment”). The board recommended against the assessment proposal, citing Starbucks historic investments and commitment to partners and ongoing efforts to improve partner relations and Starbucks then-current intention to undertake such a review and report as part of its Human Rights Impact Assessment. The assessment proposal passed at the 2023 Annual Meeting. The board appreciated, took seriously, and promptly undertook to follow through on the assessment proposal. As contemplated by the assessment proposal, the board engaged an independent, third-party assessor to conduct the FOA/CB Assessment. The Nominating/Governance Committee, the board, the ceo and management team, and our legal, labor relations, and communications teams, each fully cooperated with and supported the efforts of the third-party assessor, including by providing significant access to public and non-public documents and personnel.
Also at the 2023 Annual Meeting, shareholders considered a shareholder proposal supported by SOC requesting that the board amend its Corporate Governance Principles and Practices for the Board of Directors (the “Governance Principles”) to revise its ceo succession planning policy (the “SOC succession planning proposal”). Following engagement with SOC, and substantial incorporation of its proposed changes to the Governance Principles, the board recommended against the SOC succession planning proposal. The SOC succession planning proposal was not approved by shareholders at the 2023 Annual Meeting.
As stated in our 2023 proxy statement:
In furtherance of ongoing board refreshment, the Nominating and Corporate Governance Committee is currently engaged in an ongoing recruitment process, with Beth Ford, the chief executive officer of Land O Lakes, being nominated to stand for election as a director at the 2023 annual meeting of shareholders. The board is committed to ensuring that it remains composed of directors who are equipped to oversee the success of the business, striving to maintain an appropriate balance of diversity, skills, and tenure in its composition, and intends to increase its gender diversity over the next few years.
The board has also sought to increase its size consistent with the size of boards at similarly significant, international, and complex public companies. In furtherance of these efforts, following the 2023 Annual Meeting and prior to any outreach from SOC or its representatives regarding the SOC Group’s nomination of three director candidates, the board, working with its consultants, identified and reviewed more than 200 potential candidates for nomination to the board. Following a selection and screening process overseen by Jørgen Vig Knudstorp, chair of the Nominating/Governance Committee, certain members of the board met with more than 20 of the potential directors so identified, including Neal Mohan, Daniel Servitje, and Mike Sievert. Following Starbucks receipt of the SOC nomination on November 21, 2023, and in light of the organizational and logistical details related to appointing new directors, the Nominating/Governance Committee and board postponed definitive action on board appointments and nominations for election to the board at the Annual Meeting while evaluating the SOC Group Nominees’ candidacy and addressing such organizational and logistical details.
On September 13, 2023, Starbucks announced that Howard Schultz was resigning from the board, effective as of such date, and that Wei Zhang, an independent director, had been appointed to the board, effective as of October 1, 2023, which is the date on which Ms. Zhang joined the board.
On September 27, 2023, representatives of SOC submitted to Starbucks a shareholder proposal for consideration at the Annual Meeting. This proposal requested that Starbucks amend its bylaws to eliminate indemnification of Starbucks directors and officers if such persons were named in an action undertaken by the NLRB or by any other actor pursuant to or entailing alleged violations of the National Labor Relations Act, except as otherwise ordered by a court, mandated by certain provisions of Washington state law, or required by the Starbucks articles of incorporation (the “SOC 2024 bylaw proposal”).
Following receipt of the SOC 2024 bylaw proposal, Starbucks submitted a “no-action” letter to the SEC seeking to exclude the SOC 2024 bylaw proposal from the 2024 proxy statement on the grounds that the requested bylaw amendment was vague and indefinite and would cause Starbucks to violate Washington law.
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STARBUCKS 2024 PROXY |
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PROXY SUMMARY |
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On November 2, 2023, Starbucks built on the execution of its long-term growth strategy with the announcement of the Triple Shot Reinvention with Two Pumps Plan. This new plan is a comprehensive strategy designed to elevate the Starbucks brand, strengthen and scale digital across all channels, further store expansion globally, identify opportunities within and outside the store for efficiencies, and reinvigorate partner culture.
On November 6, 2023, the Nominating/Governance Committee met and discussed forming a fourth committee of the board to assist the board in fulfilling its oversight responsibilities with respect to evolving regulations and accountability standards as they apply to Starbucks partners and stakeholders, as well as Starbucks progress towards its environmental, partner, and community impact commitments.
On November 8, 2023, representatives of Schulte, Roth & Zabel LLP (“SRZ”), legal counsel to the SOC, provided a letter to Joshua C. Gaul, Starbucks assistant corporate secretary, informing Starbucks of SOC’s request for the forms of a written questionnaire and a written representation and agreement to be completed by an individual eligible for nomination for election to the board in accordance with Starbucks bylaws. Mr. Gaul confirmed to SRZ his receipt of this request later that day.
On November 10, 2023, SOC issued a public letter addressed to the chair of the board urging Starbucks to participate in deliberations of, and abide by decisions of, the newly created California Fast Food Council that would determine standards for pay, hours, and other conditions of employment in the fast-food industry.
On November 13, 2023, Mr. Gaul, on behalf of Starbucks, delivered to SRZ, on behalf of SOC, a copy of Starbucks form of a written questionnaire and form of written representation and agreement.
On November 16, 2023, representatives of the SOC sent a letter to Mr. Gaul, informing Starbucks of SOC’s determination to withdraw the SOC 2024 bylaw proposal from consideration at the Annual Meeting.
On November 20, 2023, the board announced its intention to establish the new Impact Committee, which is responsible for providing leadership with respect to Starbucks mission to “nurture the limitless possibilities of human connection” and how that mission is actualized through Starbucks stakeholder promises, including by monitoring the Starbucks environmental, partner, community, customer, and farmer promises, and by overseeing policies and practices related to such promises. The Impact Committee was formally established on December 13, 2023 and is chaired by Ms. Ford and composed entirely of independent directors.
On November 21, 2023, representatives of the SOC Group delivered a letter to Mr. Gaul, informing Starbucks for the first time that the SOC Group intended to nominate the SOC Group Nominees for election to the board at the Annual Meeting in opposition to the nominees recommended by the board. Later, on November 21, 2023, the SOC Group issued a press release announcing the delivery of its nomination notice and describing it as emerging in the context of the ongoing campaign to unionize Starbucks store partners. Later that day, Starbucks issued a press release with respect to the nomination notice.
In the days that followed, members of the board and Starbucks senior management discussed the SOC Group’s nomination notice and the biographical information contained therein.
On November 27, 2023, SRZ, on behalf of the SOC Group, sent to Mr. Gaul and representatives of Paul, Weiss, Rifkind, Wharton & Garrison LLP (“Paul, Weiss”), Starbucks outside legal counsel, a demand letter requesting that the SOC Group be provided, pursuant to Washington law, certain information regarding Starbucks shareholder base, together with a proposed form of confidentiality agreement covering the information requested by the demand letter.
On November 30, 2023, Paul, Weiss provided SRZ with a revised draft of the confidentiality agreement and informed SRZ that Starbucks intended to comply with the requests made by the SOC Group in its demand letter subject to finalization of the confidentiality agreement and reimbursement of Starbucks related expenses. From this time through December 7, 2023, representatives of Paul, Weiss and SRZ finalized the terms of the confidentiality agreement. Following execution of the confidentiality agreement and the reimbursement for its related expenses, Starbucks provided the pertinent information to the SOC Group.
On December 8, 2023, Starbucks communicated to Workers United its sincere desire to start the process of constructive and good faith bargaining at the earliest possible time in an effort to reach contracts for stores that have elected to organize. Workers United and Starbucks have agreed to begin efforts consistent with this goal.
On December 13, 2023, in response to the assessment proposal adopted at the 2023 Annual Meeting and related engagement with Starbucks shareholders, the board released a non-privileged and non-confidential report of the FOA/CB Assessment.
On December 13, 2023, the board and the Nominating/Governance Committee held a joint meeting during which they discussed, among other things, the potential nomination of Neal Mohan, Daniel Servitje, Mike Sievert to the board, the SOC nomination and the biographical information contained therein, and the board determined that the board would request to meet with the SOC Group Nominees.
Later, on December 13, 2023, Paul, Weiss conveyed to SRZ the board’s request to schedule virtual meetings with the SOC Group Nominees. In the days that followed, Starbucks and Paul, Weiss collaborated with the SOC Group and SRZ to schedule these meetings. Given the holiday season and to facilitate the travel plans of certain of the SOC Group Nominees, the meeting with Mr. Gotbaum was scheduled on a different date than the meetings with Ms. Echaveste and Ms. Liebman.
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STARBUCKS 2024 PROXY |
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PROXY SUMMARY |
On December 26, 2023, Jørgen Knudstorp, chair of the Nominating/Governance Committee, met with Mr. Gotbaum.
On January 5, 2024, Mellody Hobson, independent chair of the board, Beth Ford, chair of the Impact Committee, and Mr. Vig Knudstorp, chair of the Nominating/Governance Committee, met with each of Ms. Echaveste and Ms. Liebman. Also on January 5, 2024, SRZ, on behalf of the SOC Group, sent to Mr. Gaul and representatives of Paul, Weiss certain updates with respect to information about the SOC Group Nominees contained in SOC’s notice of nomination previously delivered on November 21, 2023.
On January 9, 2024, the board and the Nominating/Governance Committee held a joint meeting to consider and discuss the experience, qualifications, skills, and other attributes of six director candidates. The candidates considered were Neal Mohan, Daniel Servitje and Mike Sievert and the SOC Group’s nominees. In evaluating the candidates, the Nominating/Governance Committee considered applicable biographical, professional, and other information and each of such candidates conversations with members of the board. Following extensive discussion, the Nominating/Governance Committee determined that each of Neal Mohan, Daniel Servitje, and Mike Sievert had the experience, skills, qualifications, and other attributes required to add significant and meaningful value and insight in addressing the key considerations faced by the board. See Proposal 1: Election of Directors starting on pg. 16 of this Proxy Statement for further description of the board’s nominees, including the biographies for each of Mr. Mohan, Mr. Servitje and Mr. Sievert.
Further, the Nominating/Governance Committee determined that none of the SOC Group’s nominees possessed the mix of necessary experience, skills, qualifications, and other attributes that would allow them to add meaningful value in addressing many of the key considerations faced by the board.
Following it’s consideration of the candidates, at the joint meeting on January 9, 2024, the Nominating/Governance Committee recommended to the board that: (a) Ms. Echaveste, Mr. Gotbaum, and Ms. Liebman not be included in the board’s slate of director nominees for the Annual Meeting, (b) the board appoint Neal Mohan, Daniel Servitje and Mike Sievert effective immediately, and (c) the board nominate Ritch Allison, Andrew Campion, Beth Ford, Mellody Hobson, Jørgen Vig Knudstorp, Neal Mohan, Satya Nadella, Laxman Narasimhan, Daniel Servitje, Mike Sievert, and Wei Zhang to serve until the 2025 Annual Meeting of Shareholders, or until their respective successors have been elected and qualified. The board approved, at the joint meeting, the recommendation of the Nominating/Governance Committee described above.
On January 9, 2024, Starbucks announced that Neal Mohan, Daniel Servitje and Mike Sievert had each joined the board as new members. The appointment of Neal Mohan, Daniel Servitje and Mike Sievert brings the board to 11 directors, 10 of whom are independent. Six new directors, or 54.5% of the board, have joined the board within the past year. Starbucks filed a Current Report on Form 8-K attaching the press release regarding this announcement later that day.
On January 10, 2024, Paul, Weiss contacted SRZ to inform them that the board had determined that none of the SOC Group Nominees would be included in the board’s slate of director nominees for the Annual Meeting.Thereafter, and prior to the filing of the preliminary Proxy Statement, Mr. Knudstorp also contacted each of the SOC Group Nominees to inform them of the board’s determination.
On January 11, 2024, Starbucks filed its preliminary Proxy Statement with the SEC.
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STARBUCKS 2024 PROXY |
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PROXY SUMMARY |
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As discussed under “Our Director Nomination Process”, the Nominating/Governance Committee and our full board regularly reviews and assesses its composition to determine whether its members have the right mix of experience, qualifications, skills, and other attributes. The Nominating/Governance Committee believes that board refreshment is critical as Starbucks evolves its mission statement, promises, and values and amplifies its execution against its long-term growth strategy, Triple Shot Reinvention with Two Pumps Plan. In furtherance of ongoing board refreshment, the Nominating/Governance Committee engages in discussions with qualified candidates to serve on the board. The board is committed to ensuring that it remains composed of directors who are equipped to oversee the success of the business, striving to maintain an appropriate balance of diversity, skills, and tenure in its composition. Additionally, the board has added Laxman Narasimhan, Beth Ford, and Wei Zhang as directors in fiscal year 2023 Neal Mohan, Daniel Servitje, and Mike Sievert and intends to increase its gender diversity over the next few years.
As described under “Background of the Solicitation” above, based upon Starbucks criteria for nominations of directors to the board and the unanimous recommendation of the Nominating/Governance Committee, the board unanimously determined to nominate Ritch Allison Andrew Campion, Beth Ford, Mellody Hobson, Jørgen Vig Knudstorp, Neal Mohan, Satya Nadella, Laxman Narasimhan, Daniel Servitje, Mike Sievert, and Wei Zhang to serve until the 2025 Annual Meeting or until their respective successors have been elected and qualified. See the section of this proxy statement titled “Corporate Governance and Board Matters — The Board of Directors” on page 20 for more information about the experience, qualifications, skills, and other attributes that caused the board to determine that its nominees should serve as directors.
As described previously, the SOC Group has notified Starbucks of its intent to nominate three nominees — Maria Echaveste, Hon. Joshua Gotbaum, and Wilma B. Liebman — for election as directors at the Annual Meeting in opposition to the nominees recommended by our board. On this basis, under our bylaws the board has affirmatively determined that there is a bona fide election contest with respect to the Annual Meeting and, therefore, there is a contested election at the Annual Meeting. Due to such contested election, all director nominees will be elected by a plurality of votes cast and the 11 nominees who receive the greatest number of votes will be elected to our board at the Annual Metting. Any shares not voted “FOR” a particular director nominee as a result of a “WITHHOLD” vote or a broker non-vote (as described under “Information about Voting — Voting Information”) will not be counted in that director nominee’s favor and will not otherwise affect the outcome of the election (except to the extent they otherwise reduce the number of shares voted “FOR” such director nominee).
The board does NOT endorse the SOC Group’s nominees and unanimously recommends that you use the WHITE proxy card to vote “FOR” only each of the nominees proposed by the board (Ritch Allison, Andrew Campion, Beth Ford, Mellody Hobson, Jørgen Vig Knudstorp, Neal Mohan, Satya Nadella, Laxman Narasimhan, Daniel Servitje, Mike Sievert, and Wei Zhang). The board strongly urges you to disregard any materials sent to you by the SOC Group, including any blue proxy card, and NOT to vote using any blue proxy card that may be sent to you by the SOC Group. If you have already voted using a blue proxy card sent to you by the SOC Group, you have every right to change your vote and we strongly urge you to revoke that proxy by voting in favor of the board’s nominees by using the WHITE proxy card to vote by Internet, telephone, or by marking, dating, signing, and returning the enclosed WHITE proxy card in the postage-paid envelope provided. Only the latest dated, validly executed proxy that you submit will be counted, and any proxy may be revoked at any time prior to its exercise at the Annual Meeting. If you have any questions or require any assistance with voting your shares, please contact our proxy solicitor, Innisfree M&A Incorporated, at [****] (toll-free from the U.S. and Canada) or +[****] from other countries.
In the event that the SOC Group withdraws its nominees, abandons its solicitation, or fails to comply with the universal proxy rules after a shareholder has already granted proxy authority, shareholders can still use a WHITE proxy card to submit a later-dated vote by Internet, telephone, or mail. In the event that the SOC Group withdraws its nominees, abandons its solicitation, or fails to comply with the universal proxy rules, any votes cast in favor of the SOC Group’s candidate will be disregarded and not be counted, whether such vote is provided on Starbucks WHITE proxy card or the SOC Group’s blue proxy card.
Although Starbucks is required to include all nominees for election on its universal proxy card, for additional information regarding the SOC Group Nominees and any other related information, please refer to the SOC Group’s proxy statement, which is accessible without cost at www.sec.gov. You may receive solicitation materials from the SOC Group, including proxy statements and blue proxy cards. Starbucks is not responsible for the accuracy or completeness of any information provided by or relating to the SOC Group or its nominees contained in solicitation materials filed or disseminated by or on behalf of the SOC Group or any other statements the SOC Group may make.
All director nominees have given their consent to be named as nominees for election and have indicated their intention to serve if they are elected. Our board does not anticipate that any of our director nominees will be unable to serve as a director. If, at the time of the Annual Meeting, any nominee is unable to serve or for good cause will not serve as a director, the discretionary authority provided in the enclosed proxy will be exercised to vote for a substitute candidate designated by the board, unless the board chooses to reduce its own size.
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STARBUCKS 2024 PROXY |
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PROPOSAL 1: ELECTION OF DIRECTORS |
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BOARD AND COMMITTEE EVALUATIONS
Our board is committed to continual corporate governance improvement. To that end, the board and each committee annually conduct a self-evaluation to review and assess their overall effectiveness. These evaluations cover a variety of subjects, including:
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board structure and operation; |
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interactions with and evaluation of management; |
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committee structure and composition; |
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director nomination process; |
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topics addressed at board and committee sessions |
Committee self-assessments of performance are shared with the full board. As appropriate, these assessments result in updates or changes to our practices as well as commitments to continue existing practices that our directors believe contribute positively to the effective functioning of our board and its committees. In fiscal year 2023, these assessments led to refinements to the board and committee agendas, streamlining of materials, formation of the Impact Committee, and the consistent use of consent agendas.
To supplement these evaluations, the Nominating/Governance Committee reviews the Governance Principles each year in light of changing conditions and shareholders’ interests and recommends appropriate changes to the board for consideration and approval. In addition, the board arranges for an independent external review process of the board and each committeee, typically every three years, the next of which the board anticipates will be conducted during fiscal year 2024.
OUR DIRECTOR NOMINATION PROCESS
Our Nominating/Governance Committee, together with our board, maintains a robust policy for the consideration of potential director candidates and is responsible for establishing criteria, screening candidates, and evaluating the qualifications of persons who may be considered for service as a director, including candidates nominated or suggested by shareholders. Our Nominating/Governance Committee also retains independent third-party search firms, consultants, and other advisors, as appropriate, to help identify, screen, and evaluate potential director candidates and to enhance our board’s preparedness in the event of an unplanned director departure.
Our director nomination process affirms our commitment to inclusiveness by setting forth our policy of considering diversity in the director identification and nomination process. Our Nominating/Governance Committee proactively seeks diverse director candidates to provide representation of varied experience, qualifications, skills, and other attributes in the boardroom to support the global demands of our business. When seeking new director candidates, our Nominating/Governance Committee actively endeavors to include women, racial and ethnic minorities, and geographically diverse persons in the candidate pool. However, our Nominating/Governance Committee does not assign specific weights to any single criterion, and no particular criterion is necessarily applied to all prospective director nominees. As part of its annual review of our board composition and director nominees, our Nominating/Governance Committee assesses the effectiveness of its approach to diversity.
Our Policy on Director Nominations, which describes the process by which candidates are identified and assessed for possible inclusion in our recommended slate of director nominees, is available at www.starbucks.com/about-us/company-information/corporate-governance. The nominations policy is administered by the Nominating/Governance Committee, which reviews the policy at least annually and makes modifications as our needs and circumstances evolve, and as applicable legal or listing standards change. The Nominating/Governance Committee may amend the nominations policy at any time, in which case the most current version will be available on our website.
The Nominating/Governance Committee will consider and evaluate all candidates identified through the processes described below, including incumbents and candidates proposed by shareholders, based on the same criteria.
Minimum Criteria for Board Members
Under the Starbucks Policy on Director Nominations (see the Corporate Governance section of our website at https://www.starbucks.com/about-us/corporate-governance/), each candidate for the board is required to, at a minimum:
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be prepared to represent the best interests of all shareholders rather than just one particular constituency or entity; |
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have demonstrated integrity and ethics in their personal and professional life and have established a record of professional accomplishment in their chosen field; |
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together with their family members, affiliates, and associates, be free of any material personal, financial, or professional interest in any present or potential competitor of Starbucks; |
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STARBUCKS 2024 PROXY |
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CORPORATE GOVERNANCE |
Certain Relationships and Related Person Transactions
REVIEW AND APPROVAL OF RELATED PERSON TRANSACTIONS
Under the Audit Committee’s charter, and consistent with Nasdaq rules, any material potential or actual conflict of interest or transaction between Starbucks and any “related person” of Starbucks must be reviewed and approved or ratified by the Audit Committee. SEC rules define a “related person” of Starbucks as any Starbucks director (or nominee), executive officer, 5%-or-greater shareholder, or an immediate family member of any of such persons.
Our board of directors has adopted a written Policy for the Review and Approval of Related Person Transactions Required to Be Disclosed in Proxy Statements, which states that it is generally the policy of Starbucks not to participate in “related person” transactions. In select circumstances, if the transaction provides Starbucks with a demonstrable and significant strategic benefit that is in the best interests of Starbucks and its shareholders and has terms that are competitive with terms available from unaffiliated third parties, then the Audit Committee may approve the transaction. The policy also provides that any “related person” as defined above must notify the chair of the Audit Committee before becoming a party to, or engaging in, a potential related person transaction that may require disclosure in our proxy statement under SEC rules, or if prior approval is not practicable, as soon as possible after engaging in the transaction. Based on current SEC rules, transactions covered by the policy include:
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any individual or series of related transactions, arrangements, or relationships (including, but not limited to, indebtedness or guarantees of indebtedness), whether actual or proposed; |
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in which Starbucks was or is to be a participant; |
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the amount of which exceeds $120,000; and |
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in which the related person has or will have a direct or indirect material interest. Whether the related person has a direct or indirect material interest depends on the significance to investors of knowing the information in light of all the circumstances of a particular case. The importance to the person having the interest, the relationship of the parties to the transaction with each other, and the amount involved in the transaction are among the factors to be considered in determining the significance of the information to investors. |
The chair of the Audit Committee has the discretion to determine whether a transaction is or may be covered by the policy. If the chair determines that the transaction is covered by the policy, then the transaction is subject to full Audit Committee review and approval. The Audit Committee’s decision is final and binding. Additionally, the chair of the Audit Committee has discretion to approve, disapprove, or seek full Audit Committee review of any immaterial transaction involving a related person (i.e. a transaction not otherwise required to be disclosed in the proxy statement).
In considering potential related person transactions, the Audit Committee looks to SEC and Nasdaq rules, including the impact of a transaction on the independence of any director. Once the Audit Committee has determined that (i) the potential related person transaction will provide Starbucks with a demonstrable and significant strategic benefit that is in the best interests of Starbucks and its shareholders and (ii) that the terms of the potential related person transaction are competitive with terms available from unaffiliated third parties, the Audit Committee may consider other factors such as:
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whether the transaction is likely to have any significant negative effect on Starbucks, the related person, or any Starbucks partner; |
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whether the transaction can be effectively managed by Starbucks despite the related person’s interest in it; |
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whether the transaction would be in the ordinary course of our business; and |
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the availability of alternative products or services at comparable prices. |
RELATED PERSON TRANSACTIONS SINCE THE BEGINNING OF FISCAL YEAR 2023
In fiscal year 2023, the following are the only transactions or series of similar transactions to which we were or will be a party in which the amount involved exceeds $120,000 and in which any director, nominee for director, executive officer, beneficial holder of more than 5% of our capital stock, or any member of their immediate family or any entity affiliated with any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change of control, and other arrangements, which are described under “Executive Compensation.”
Starbucks and entities owned by Mr. Schultz previously entered into a management services agreement and a hangar space lease for Mr. Schultz’s aircraft. Pursuant to the management services agreement, an entity owned by Mr. Schultz operates his aircraft using aircraft management services provided by Starbucks, and Mr. Schultz fully compensates Starbucks for such services at market rates. Mr. Schultz further reimburses Starbucks in accordance with such management services agreement for all expenses, which includes both variable and non-variable expenses, incurred by Starbucks in managing the aircraft. Under the terms of the hangar space lease, an entity owned by Mr. Schultz reimburses Starbucks for the full pro-rata portion of the hangar rent and all utilities, building repairs, improvements, insurance, and other costs incurred by Starbucks relating to the hangar storage of Mr. Schultz’s aircraft. Mr. Schultz’s pays an estimate of each month’s required reimbursement to Starbucks in advance with a subsequent reconciliation. In fiscal year 2023, Mr. Schultz’s entities paid Starbucks $568,750 pursuant to the management services agreement and $821,954 pursuant to the hangar space lease.
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45 |
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STARBUCKS 2024 PROXY |
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CORPORATE GOVERNANCE |
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Mr. Schultz allows Starbucks to utilize his aircraft pursuant to a non-exclusive aircraft dry lease to Starbucks, which arrangement allows Starbucks to use an additional aircraft as needed to support Starbucks business operations without Starbucks having to incur the full ownership, operating, and maintenance costs of the aircraft. In fiscal year 2023, Starbucks paid an entity controlled by Mr. Schultz $1,061,824 for Starbucks pro-rata usage of such aircraft.
Mr. Schultz and Mr. Narasimhan have each entered into time-sharing agreements with Starbucks so that each of Mr. Schultz and Mr. Narasimhan can, in accordance with Starbucks Corporate Aircraft Use Policy, reimburse Starbucks to the maximum extent permitted under applicable Federal Aviation Administration (“FAA”) regulations for the entire aggregate incremental cost incurred by Starbucks in providing for their personal travel. Such aggregate incremental cost includes the full out-of-pocket cost incurred by the Company, including costs for any “deadhead” positioning related to personal travel. In fiscal year 2023, Mr. Schultz paid Starbucks approximately $201,000 pursuant to his time-sharing agreement, and Mr. Narasimhan paid Starbucks $0 pursuant to his time-sharing agreement.
Starbucks purchases commodities from United Olive Oil Import Corp., a wholly owned subsidiary of Partanna Holdings LLC (“Partanna”), as part of its ordinary course of business. As of the end of fiscal year 2023, Mr. Schultz indirectly held an approximate 19% ownership interest in Partanna and serves as a member of Partanna’s Board of Managers. In fiscal year 2023, Starbucks paid $26,525,445 to United Olive Oil Import Corp. for the purchase of commodities to be used in Starbucks branded beverages and for resale in Starbucks cafes.
Corporate Governance Materials Available on the Starbucks Website
Our Governance Principles are intended to provide a set of flexible guidelines for the effective functioning of the board of directors. The Governance Principles are reviewed regularly and revised as necessary or appropriate in response to changing regulatory requirements, evolving best practices, and other considerations. They are posted on the Corporate Governance section of our website at www.starbucks.com/about-us/company-information/corporate-governance.
In addition to our Governance Principles, other information relating to corporate governance at Starbucks is available on the Corporate Governance section of our website, including:
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Restated Articles of Incorporation |
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Amended and Restated Bylaws |
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Audit and Compliance Committee Charter |
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Compensation and Management Development Committee Charter |
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Environmental, Partner, and Community Impact Committee Charter |
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Nominating and Corporate Governance Committee Charter |
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Director Nominations Policy |
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Standards of Business Conduct (applicable to directors, officers, and partners as well as temporary service workers and independent contractors) |
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Code of Ethics for ceo, coo, cfo, and finance leaders |
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Procedure for Communicating Complaints and Concerns |
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Audit and Compliance Committee Policy for Pre-Approval of Independent Auditor Services |
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Corporate Governance Principles and Practices for the Board of Directors |
You may obtain a print copy of any of these materials, free of charge, by sending a written request to: Starbucks Corporation, 2401 Utah Avenue South, Mail Stop S-LA1, Seattle, Washington 98134, Attention: corporate secretary.
Contacting the Board of Directors
Starbucks offers several ways for interested parties to communicate with our board of directors, a board committee, or individual directors. Generally, you may provide feedback by calling the Starbucks audit line at 1-800-300-3205, or by sending written communications to:
Starbucks Corporation
P.O. Box 34507
Seattle, Washington 98124
The Procedure for Communicating Complaints and Concerns, which is available on the Corporate Governance section of our website, describes our process for determining which communications will be relayed to board members and which reports require investigation or other follow-up.
Our chief ethics and compliance officer, together with our general counsel, is responsible for administering the Procedure for Communicating Complaints and Concerns on behalf of the Audit Committee and the board of directors.
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46 |
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STARBUCKS 2024 PROXY |
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CORPORATE GOVERNANCE |
Our Compensation Philosophy
While we consider many factors in our executive pay decisions, we are guided by the core philosophies and principles discussed below:
PAY FOR PERFORMANCE
The vast majority of pay for our executive officers is at-risk and performance-based, with measures aligned to the Company’s long-term growth plan. Performance is assessed in the following ways:
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The Company’s financial performance, including results against long-term growth |
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Return to shareholders over time, relative to our peers |
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The Company’s inclusion and diversity and sustainability performance, including results against predefined measures |
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The individual performance of executive officers |
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Return to shareholders over time, relative to our peers |
ALIGNMENT WITH SHAREHOLDERS
Our compensation programs are designed to align our executive officers’ interests with those of our shareholders. The vast majority of pay for our NEOs is tied to Company performance or our stock price. We also maintain stock ownership guidelines for executive officers. Our robust governance practices enable us to be good stewards of equity incentives.
PROGRAMS THAT DRIVE LONG-TERM PROFITABLE GROWTH
We invest in and reward talent with the greatest potential to drive the long-term profitable growth of our Company, while holding executive officers accountable to the Company’s strategy and values.
SIMPLICITY AND TRANSPARENCY
Our compensation programs include clear performance measures and line of sight for partners.
RECOGNITION OF INDIVIDUAL PERFORMANCE
Our compensation programs reward individual performance in a number of areas that contribute to our growth and success. For example, our executive officers are responsible for achievement of non-financial goals, which are critical to the long-term success of our business, reflect our external responsibility as global leaders, and add value for our shareholders, partners, and other stakeholders.
In addition, our compensation programs consider individual performance against our cultural values and leadership behaviors. Executive officers are thus motivated to deliver results that align with Company values and shareholder interests.
ALIGNMENT OF APPROACH ACROSS THE WORKFORCE
Our partners, at every level, are our most important asset. We believe the strength of our workforce is one of the significant contributors to our success as a global brand that leads with purpose. Therefore, one of our core strategies is to invest in and support our partners to differentiate our brand, products, and services in the competitive specialty coffee market. The Compensation Committee takes seriously the Company’s goal to structure pay programs, from the ceo down through the entire workforce, in a manner that reinforces the Company’s growth agenda. Our approach of considering pay competitiveness and rewarding exceptional performance applies not only to our executive officers but also to the broader workforce.
Our Executive Compensation Process
THE COMPENSATION COMMITTEE’S ROLE IN SETTING EXECUTIVE COMPENSATION
The Compensation Committee typically reviews target total direct compensation annually at its November meeting following the conclusion of the fiscal year. Target total direct compensation for our NEOs is composed of base salary, target annual cash incentive award, and target value of long-term equity incentives. Target total direct compensation is designed to be competitive with peer companies and market data, as explained below.
Typically, at the same meeting, the Compensation Committee approves, for each NEO:
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the target value of annual cash incentive awards (as a percentage of base salary), |
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annual cash incentive payments (for performance in the prior fiscal year), |
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performance goals for new annual cash incentive awards, and |
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long-term equity grants. |
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71 |
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STARBUCKS 2024 PROXY |
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EXECUTIVE COMPENSATION PROGRAM |
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OTHER FISCAL YEAR 2023 COMPENSATION MATTERS
Departure of Howard Schultz
In September 2023, Mr. Schultz resigned as a director of the Company, and from all other positions with Starbucks and its affiliates. In connection with Mr. Schultz’s resignation, the board agreed to amend the Retirement Agreement dated June 1, 2018, by and between the Company and Mr. Schultz to continue to provide Mr. Schultz with reasonable security services due to his recent role as our interim ceo and his significant visibility as our founder. The security services will be provided for a period of 10 years and the level of security will be evaluated on an annual basis. In recognition of Mr. Schultz’s leadership as Starbucks founder and chairman emeritus, Starbucks also will reimburse Mr. Schultz for his monthly healthcare insurance premiums. The Compensation Committee also determined that such benefits were reasonable given the significant support and leadership that he provided during the ceo transition process and in light of the fact that Mr. Schultz received a base salary of only $1, and did not receive any cash incentives, equity awards, or cash severance rights during his recent tenure as interim ceo and as a director.
Perquisites and Other Executive Benefits
Our executive compensation program includes limited executive perquisites and other benefits. The aggregate incremental cost of providing these perquisites and other benefits to our NEOs is detailed in the Fiscal Year 2023 All Other Compensation Table on page 83. We believe the perquisites and other executive benefits we provide are consistent with those offered by the companies that we compete with for executive talent, and that offering these benefits serves the objective of attracting and retaining top executive talent.
We offer the following perquisites to our NEOs and to Mr. Schultz, as either an NEO or as chairman emeritus, as applicable:
Company Aircraft. The Company maintains aircraft to facilitate business travel. Our comprehensive Corporate Aircraft Use Policy includes guidelines for annual reporting to the Audit Committee to ensure transparency relative to aircraft usage and the business purpose served. In accordance with the Corporate Aircraft Use Policy, the ceo and individuals approved by the Audit Committee may enter into an aircraft time-sharing agreement with Starbucks. Mr. Narasimhan and Mr. Schultz have each entered into such an aircraft time-sharing agreement, which agreements require that they each reimburse the Company to the maximum extent permitted under FAA regulations for the entire aggregate incremental cost incurred by the Company in providing personal travel to such individuals. Such aggregate incremental cost includes the full out-of-pocket cost incurred by the Company, including costs for any “deadhead” positioning related to personal travel.
The Company’s Corporate Aircraft Use Policy further allows for personal guests of executive officers and board members to travel on business-related flights on our corporate aircraft under certain limited circumstances. The policy also allows for certain executive personal travel done in connection with a flight that is otherwise for a business-purpose. Both types of use result in imputed income to the executive or director under Internal Revenue Service regulations, and the Company does not cover, reimburse, or otherwise “gross-up” any income tax due from any applicable executive officer or board member on such imputed income. As well, if any aggregate incremental cost is incurred by the Company due to such personal travel, the entirety of the aggregate incremental cost is reported as “other compensation” in the Summary Compensation Table.
Security. We believe that the personal safety and security of our senior executives is of the utmost importance to the Company and its shareholders. Pursuant to our executive security program, we may provide security services to certain executives. Security services include home security systems and monitoring and, in some cases, personal security services, which may include protection of family members. These protections are provided due to the range of security issues encountered by senior executives of large, multinational corporations. Based on a security study, the independent members of the board decided to provide personal security services to Mr. Narasimhan and Mr. Schultz due to security considerations arising from, in the case of Mr. Narasimhan, his ceo role, and in the case of Mr. Schultz, his recent role as our interim ceo and his significant visibility as our founder. We view the security services provided to Mr. Narasimhan and Mr. Schultz as an integral part of our risk management program and as necessary and appropriate business expenses. However, because such services may be viewed as conveying a personal benefit to Mr. Narasimhan and Mr. Schultz, we have reported the aggregate incremental costs of such services in the “All Other Compensation” column of the Summary Compensation Table as required by Item 402 of Regulation S-K. The Company did not pay personal security costs for any other executive in fiscal year 2023, except in connection with business-related travel.
Executive Physicals and Life and Disability Insurance. We offer to pay for annual physical examinations for all partners at the senior vice president level and above. These examinations provide a benefit to the Company and the executive at a relatively small cost to the Company. We also provide life and disability insurance to all partners at the vice president level and above at a higher level than is provided to partners generally. The amounts paid in respect of these benefits to our NEOs in fiscal year 2023 are detailed in the Fiscal Year 2023 All Other Compensation Table.
Relocation and Expatriate Expenses. We provide relocation assistance to some manager-level partners and all partners at the director level and above, which in fiscal year 2023 included Mr. Narasimhan and Mr. Lerman. Under limited circumstances, we provide certain reimbursements and benefits to partners that expatriate to another country for work on the Company’s behalf.
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78 |
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STARBUCKS 2024 PROXY |
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EXECUTIVE COMPENSATION PROGRAM |
PROPOSAL 5
Shareholder proposal requesting a report on direct and systemic discrimination
National Center for Public Policy Research (“NCPPR”), owner of at least $2,000 of Starbucks common stock for at least three years, with an address of 2005 Massachusetts Ave. NW, Washington, DC 20036, has notified us that it intends to present the following proposal at the Annual Meeting. In accordance with applicable proxy regulations, the proposal and supporting statement, for which Starbucks accepts no responsibility, are set forth below exactly as they were submitted by the proponent.
Report about direct or systemic discrimination
Resolved: Shareholders of Starbucks Corporation (“the Company”) request that the Company conduct an audit and report to determine if and to what extent its programs and practices direct systemic discrimination against groups or types of employees, including “non-diverse” employees. Optimally, the audit and report would include a review of the Partner Networks that have been established at the Company, and should reasonably consider the recommendations made by those groups, the mechanism or restrictions on setting up such groups, and the protections against reprisal for the actions or recommendations of any such groups. The report should be prepared at reasonable cost, omit confidential or proprietary information, and be publicly disclosed on the Company’s website.
Supporting Statement: The Company has spent significant resources and attention on implementing DEI policies into workplace practices and hiring. These efforts include the Company’s “Partner Networks,” which “are partner-led groups that bring together people with shared identities and experiences, along with allies, to promote a culture of inclusion…”[1]
All agree that every employee should feel welcome, but there is much disagreement about how to achieve that goal. Although employee “Partner Networks” theoretically sound like a good way to achieve the goal of “inclusivity,” all they really achieve is exclusivity.
Membership in such groups is often based on surface-level characteristics such as race, sex, and sexual orientation. In fact, Starbucks boasts a dozen partner networks, with more than half being grounded in surface-level characteristics. These groups include the Black Partner Network to focus on the “African diaspora,” the Hora del Cafe to focus on the “Latinx culture,” the India Partner Network to focus on the “growth of the India market,” the Indigenous Partner Network to “preserve and celebrate Indigenous cultural values,” the Pan-Asian Partner Network to “elevate the impact of Pan-Asian partners,” the Pride Network to “cultivate an equitable, dynamic and supportive environment for LGBTQIA2+ partners,” the Welcoming Refugees Alliance to “empower and advocate for refugee partners,” and the Women’s Impact Network to “ignite the power of women.”[2]
While Starbucks also has Networks that focus on the Armed Services, the disabled, and sustainability, it only has one group that actually focuses on performance: the “Next at Starbucks” group, to “support and empower the next generation of Starbucks leadership.”[3]
Starbucks has no Partner Networks, though, for any “non-diverse” groups. This is particularly a concern given the many programs Starbucks has established to facilitate disparate treatment in hiring and promotion against the “non-diverse.” Under equity theory itself, this gap indicates the existence of systemic discrimination against the non-diverse at Starbucks. The content of the current Partner Network groups’ recommendations and activities would further substantiate that claim and would help to demonstrate if there’s systemic discrimination by viewpoint at Starbucks.
Accordingly, we request the report consider the rights and interests of all employees and groups to ensure that the Company does not alienate individuals who lack certain “diverse” qualities in the name of “inclusivity.”
[1] https://stories.starbucks.com/stories/2020/starbucks-partner-networks-help-create-a-culture-of-belonging/
[2] https://stories.starbucks.com/stories/2020/starbucks-partner-networks-help-create-a-culture-of-belonging/
[3] https://stories.starbucks.com/stories/2020/starbucks-partner-networks-help-create-a-culture-of-belonging/
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98 |
|
STARBUCKS 2024 PROXY |
|
PROPOSALS 4-6: SHAREHOLDER PROPOSALS |
PROPOSAL 6
Shareholder proposal requesting a report on human rights policies
National Legal and Policy Center (“NLPC”), owner of at least $2,000 of Starbucks common stock for at least three years, with an address of 107 Park Washington Court, Falls Church, Virginia 22046, has notified us that it intends to present the following proposal at the Annual Meeting. In accordance with applicable proxy regulations, the proposal and supporting statement, for which Starbucks accepts no responsibility, are set forth below exactly as they were submitted by the proponent.
Congruency Report on Human Rights
WHEREAS: Inconsistencies persist between many companies’ published policies and actual practices and operations, which poses substantial risks to stakeholders and society at large.
The “Global Human Rights Statement”[1] and “Standards of Business Conduct”[2] published by Starbucks Corporation (the “Company”) espouse the following:
· |
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“With our (business and employee) partners, our coffee and our customers at our core, we live these values: ... Acting with courage, challenging the status quo and finding new ways to grow our company and each other ... Being present, connecting with transparency, dignity and respect ... “ |
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“Conducting business ethically, with integrity and transparency, is essential to preserving our culture and protecting our brand ... “ |
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“Our commitment to respect the human and civil rights of our Partners applies across the world ... “ |
Starbucks appears to uphold—or rescind—these principles inconsistently across countries where it conducts business.
For example in China, the Company seeks accelerated growth[3] in an environment where many U.S.-based businesses increasingly exercise caution[4] due to uninsurable risks.[5] In its zeal to grow to 9,000 stores within the next two years, Starbucks must comply with the expectations of the dictatorial and genocidal Chinese Communist Party, which controls the government.[6] One expert on business in China credited the Company’s success so far to “friends in high places,” adding, “They are very politically savvy when it comes to entering the Chinese marketplace. Most of their real estate partners are either high-ranking party officials or real estate entities that are in some way tied to the Chinese Communist Party, and some of the leaders. “[7]
Yet upon Russia’s invasion of Ukraine, the Company temporarily closed all its licensed cafes in Russia and paused shipments of all its products into the country.[8] Starbucks’s CEO at the time said,[9] “I want to express deep care for the livelihoods of our 2,000 green apron partners in Russia. In times like these, as a company and as partners, we strive to never be a bystander ... I want you to know that no matter what, we stand together, as partners.” Two months later the Company exited Russia permanently and said it would give 2,000 employees there six-months’ severance. The abandonment by the Company of its private licensing partner in Russia and its employees came despite no reports of endangerment to its cafes.
Considering these examples, it appears the Company’s principles to be “about humanity” to “inspire and nurture the human spirit—one person, one cup and one neighborhood at a time”—has its limits.
Resolved: Shareholders request the board of directors issue a report by March 31, 2025, at reasonable cost and omitting proprietary or confidential information, analyzing the congruency of the Company’s human rights policy positions with its actions, especially in countries in geopolitical conflicts or under oppressive regimes, as they impact how the Company maintains its reputation, viability and profitability.
[1] https://stories.starbucks.com/press/2020/global-human-rights-statement/
[2] https://globalassets.starbucks.com/assets/84F7DBEA77914F119230581D3EE50FD7.pdf
[3] https://finance.yahoo.com/news/starbucks-why-howard-schultzs-departure-could-open-the-door-for-expansion-in-china-151327623.html
[4] https://www.wsj.com/finance/stocks/wall-streets-china-dreams-slip-away-f68ac708
[5] https://www.wsj.com/articles/your-china-business-may-be-uninsurable-political-risk-coverage-222f15dd
[6] https://www.state.gov/reports/2022-country-reports-on-human-rights-practices/china/
[7] https://finance.yahoo.com/news/starbucks-why-howard-schultzs-departure-could-open-the-door-for-expansion-in-china-151327623.html
[8] https://www.cnbc.com/2022/05/23/starbucks-will-exit-russia-after-15-years-closing-130-licensed-cafes.html
[9] https://stories.starbucks.com/press/2022/update-to-starbucks-partners-on-our-business-in-russia/
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100 |
|
STARBUCKS 2024 PROXY |
|
PROPOSALS 4-6: SHAREHOLDER PROPOSALS |
ADDITIONAL INFORMATION
Expenses of Solicitation
The proxies being solicited hereby are being solicited by the board of directors of Starbucks. We will bear the expense of preparing, printing, and mailing this proxy statement and the proxies we solicit. Proxies will be solicited by mail, telephone, personal contact, and electronic means and may also be solicited by directors, officers, and Starbucks partners in person, by the Internet, by telephone, or by facsimile transmission, without additional remuneration for their services. Appendix B sets forth information relating to certain of Starbucks directors, director nominees and certain executive officers and employees who are considered to be “participants” in Starbucks solicitation under the rules of the SEC by reason of their position as directors of Starbucks or because they may be soliciting proxies on Starbucks behalf.
As a result of the proxy solicitation of the SOC Group, we will incur additional costs in connection with the solicitation of proxies. We have retained Innisfree M&A Incorporated for certain advisory and proxy solicitation services for an aggregate fee of approximately $[****], together with reimbursement of reasonable out-of-pocket expenses for these services, and Innisfree M&A Incorporated expects that approximately [****] of their employees will assist in the solicitation. Excluding amounts that we would have expended for a solicitation in an election of directors in the absence of a contested election, and excluding the compensation of our directors and partners involved in the solicitation, the aggregate expenses are estimated to be approximately $[****], approximately $[****] of which has been incurred (or accrued) to date. These expenses, which are estimates that may change, include the fees of Innisfree M&A Incorporated, outside counsel and other advisors, as well as retaining an independent inspector of election.
We also will request brokerage firms, banks, nominees, custodians, and fiduciaries to forward proxy materials to the beneficial owners of shares of our stock as of the record date and will reimburse them for the cost of forwarding the proxy materials in accordance with customary practice.
Internet Voting
Starbucks is incorporated under Washington law, which specifically permits electronically transmitted proxies, provided that the transmission must either set forth or be submitted with information from which it can reasonably be determined that the transmission was authorized by the shareholder. The electronic voting procedures provided for the Annual Meeting are designed to authenticate each shareholder by use of a Control Number so shareholders can vote their shares and to confirm that their instructions have been properly recorded.
Internet Availability of Annual Meeting Materials
As permitted by SEC rules, we are making this proxy statement and our annual report available to shareholders electronically via the Internet on Starbucks website at [****]. We will mail to certain shareholders a notice containing instructions on how to access this proxy statement and our annual report and how to vote online. We will mail to certain shareholders a notice containing instructions on how to access the proxy materials electronically and how to vote online. If you received that notice, you will not receive a printed copy of the proxy materials unless you request it by following the instructions for requesting such materials contained on the notice or set forth in the following paragraph.
If you received a paper copy of this proxy statement by mail and you wish to receive a notice of availability of next year’s proxy statement electronically via e-mail, you can elect to receive an e-mail message that will provide a link to these documents on our website. By opting to receive the notice of availability and accessing your proxy materials online, you will save Starbucks the cost of producing and mailing documents to you, reduce the amount of mail you receive and help preserve environmental resources. Registered shareholders may elect to receive electronic proxy and annual report access or a paper notice of availability for future annual meetings by registering online at [***]. If you are a registered holder and received electronic or paper notice of availability of these proxy materials and wish to receive paper delivery of a full set of future proxy materials, you may do so at [***]. Beneficial (or “street name”) shareholders who wish to elect one of these options may do so by following the instructions on the notice or voting instruction form received from their broker.
Proposals of Shareholders
Pursuant to SEC Rule 14a-8, shareholder proposals intended for inclusion in our 2025 proxy statement to be acted upon at our 2025 Annual Meeting must be received by us at our executive offices at 2401 Utah Avenue South, Mail Stop S-LA1, Seattle, Washington 98134, Attention: corporate secretary, on or prior to the close of business on [****], 2024.
Shareholder proposals submitted for consideration at the 2025 Annual Meeting but not for inclusion in the related proxy statement pursuant to SEC Rule 14a-8, including shareholder nominations for candidates for election as directors, generally must be delivered to the corporate secretary at our executive offices between [****], 2024 and the close of business on [****], 2024. However, if the date of the 2025 Annual Meeting is more than 30 days before or more than 60 days after [****], notice by the shareholder of a proposal must be delivered between the close of business on the 150th day prior to the date of such annual meeting and the close of business on the later of the 120th day prior to the date of such annual meeting or, if the first public announcement of the date of the annual meeting is less than 100 days prior to the date of such annual meeting, the 10th day following the day on which we first make a public announcement of the date of the annual meeting. Shareholder
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105 |
|
STARBUCKS 2024 PROXY |
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ADDITIONAL INFORMATION |
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Pay vs Performance Disclosure - USD ($)
|
12 Months Ended |
Oct. 01, 2023 |
Oct. 02, 2022 |
Oct. 03, 2021 |
Pay vs Performance Disclosure |
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Pay vs Performance Disclosure, Table |
This section provides disclosure about the relationship between executive compensation actually paid to our principal executive officer (“PEO”) and non-PEO NEOs and certain financial performance measures of the Company for the fiscal years listed below. This disclosure has been prepared in accordance with Item 402(v) of Regulation S-K under the Exchange Act (the “Pay Versus Performance Rules”) and does not necessarily reflect how the Compensation Committee evaluates compensation decisions.
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Value of Initial Fixed $100 Investment Based On (5) : |
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Summary Compensation Table Total for Kevin Johnson |
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Compensation Actually Paid to Kevin Johnson (2)(3) |
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Summary Compensation Table Total for Howard Schultz |
|
Compensation Actually Paid to Howard Schultz (2)(3) |
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Summary Compensation Table Total for Laxman Narasimhan |
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Compensation Actually Paid to Laxman Narasimhan (2)(3) |
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Average Summary Compensation Table Total for non-PEO NEOs |
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Average Compensation Actually Paid to non-PEO NEOs (2)(4) |
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Total Share- holder Return (3-Year) |
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Peer Group Total Share- holder Return (3-Year) |
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Net Income |
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2023 |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
757,597 |
|
|
|
$ |
757,597 |
|
|
|
$ |
14,604,531 |
|
|
|
$ |
20,654,309 |
|
|
|
$ |
5,232,397 |
|
|
|
$ |
6,676,906 |
|
|
|
$ |
114.96 |
|
|
|
$ |
107.23 |
|
|
|
$ |
4,124.5 |
|
|
|
$ |
3.618 |
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|
|
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|
|
|
|
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|
2022 |
|
|
$ |
16,718,154 |
|
|
|
$ |
1,938,250 |
|
|
|
$ |
374,558 |
|
|
|
$ |
374,558 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
(7) |
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|
$ |
7,460,700 |
|
|
|
$ |
2,368,335 |
|
|
|
$ |
103.93 |
|
|
|
$ |
94.25 |
|
|
|
$ |
3,281.6 |
|
|
|
$ |
3.010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
|
|
$ |
20,425,162 |
|
|
|
$ |
40,758,685 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
5,901,721 |
|
|
|
$ |
6,365,783 |
|
|
|
$ |
136.25 |
|
|
|
$ |
119.15 |
|
|
|
$ |
4,199.3 |
|
|
|
$ |
3.002 |
|
(1) |
The following table lists the PEO and non-PEO NEOs for each of fiscal years 2023, 2022, and 2021. |
|
|
|
|
|
Year |
|
PEO |
|
|
|
|
|
|
|
Laxman Narasimhan; Howard Schultz |
|
Rachel Ruggeri, Michael Conway, Bradley E. Lerman, and Sara Kelly |
|
|
|
|
|
Howard Schultz; Kevin Johnson |
|
Laxman Narasimhan; Rachel Ruggeri, John Culver, Michael Conway, and Rachel Gonzalez |
|
|
|
|
|
Kevin Johnson |
|
Rachel Ruggeri, John Culver, Michael Conway, Rachel Gonzalez, Patrick Grismer, and Rosalind Brewer |
(2) |
The dollar amounts reported represent the amount of “compensation actually paid,” as calculated in accordance with the Pay Versus Performance Rules. These dollar amounts do not reflect the actual amounts of compensation earned by or paid to our NEOs during the applicable year. For purposes of calculating “compensation actually paid,” the fair value of equity awards is calculated in accordance with ASC Topic 718 using the same assumption methodologies used to calculate the grant date fair value of awards for purposes of the Summary Compensation Table (refer to the Summary Compensation Table for additional information). |
(3) |
The following table shows the amounts deducted from and added to the Summary Compensation Table total to calculate “compensation actually paid” to our PEOs in accordance with the Pay Versus Performance Rules: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year |
|
2021 |
|
2022 |
|
2023 |
|
|
|
|
Summary Compensation Table Total |
|
|
$ |
20,425,162 |
|
|
|
$ |
16,718,154 |
|
|
|
$ |
0 |
|
|
|
|
|
- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year |
|
|
($ |
14,755,014 |
) |
|
|
($ |
15,385,875 |
) |
|
|
$ |
0 |
|
|
|
|
|
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year |
|
|
$ |
15,067,557 |
|
|
|
$ |
5,821,334 |
|
|
|
$ |
0 |
|
|
|
|
|
+ Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years |
|
|
$ |
13,773,087 |
|
|
|
($ |
12,178,090 |
) |
|
|
$ |
0 |
|
|
|
|
|
+ Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
|
$ |
6,247,893 |
|
|
|
$ |
6,216,807 |
|
|
|
$ |
0 |
|
|
|
|
|
+ Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
745,921 |
|
|
|
$ |
0 |
|
|
|
|
|
- Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
Compensation Actually Paid |
|
|
$ |
40,758,685 |
|
|
|
$ |
1,938,250 |
|
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year |
|
2021 |
|
2022 |
|
2023 |
|
|
|
|
Summary Compensation Table Total |
|
|
$ |
0 |
|
|
|
$ |
374,558 |
|
|
|
$ |
757,597 |
|
|
|
|
|
- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
+ Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
+ Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
+ Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
- Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
Compensation Actually Paid |
|
|
$ |
0 |
|
|
|
$ |
374,558 |
|
|
|
$ |
757,597 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year |
|
2021 |
|
2022 |
|
2023 |
|
|
|
|
Summary Compensation Table Total |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
14,604,531 |
|
|
|
|
|
- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
($ |
9,717,954 |
) |
|
|
|
|
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
15,160,156 |
|
|
|
|
|
+ Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
275,413 |
|
|
|
|
|
+ Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
+ Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
332,163 |
|
|
|
|
|
- Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
Compensation Actually Paid |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
20,654,309 |
|
(4) |
The following table shows the amounts deducted from and added to the average Summary Compensation Table total compensation to calculate the average “compensation actually paid” to our non-PEO NEOs in accordance with the Pay Versus Performance Rules. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year |
|
2021 |
|
2022 |
|
2023 |
|
|
|
|
Summary Compensation Table Total |
|
|
$ |
5,901,721 |
|
|
|
$ |
7,460,700 |
|
|
|
$ |
5,232,397 |
|
|
|
|
|
- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year |
|
|
($ |
4,105,805 |
) |
|
|
($ |
4,833,690 |
) |
|
|
($ |
3,466,952 |
) |
|
|
|
|
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year |
|
|
$ |
3,234,333 |
|
|
|
$ |
3,307,886 |
|
|
|
$ |
3,731,194 |
|
|
|
|
|
+ Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years |
|
|
$ |
2,789,345 |
|
|
|
($ |
1,901,074 |
) |
|
|
$ |
153,303 |
|
|
|
|
|
+ Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
|
$ |
430,912 |
|
|
|
$ |
481,320 |
|
|
|
$ |
698,348 |
|
|
|
|
|
+ Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
|
$ |
984,174 |
|
|
|
($ |
290,338 |
) |
|
|
$ |
328,616 |
|
|
|
|
|
- Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
|
($ |
2,868,897 |
) |
|
|
($ |
1,856,469 |
) |
|
|
$ |
0 |
|
|
|
|
|
Compensation Actually Paid |
|
|
$ |
6,365,783 |
|
|
|
$ |
2,368,335 |
|
|
|
$ |
6,676,906 |
|
(5) |
In accordance with the Pay Versus Performance Rules, the Company and the Company’s peer group cumulative total shareholder return (the “Peer Group TSR”) is determined based on the value of an initial fixed investment of $100 on September 25, 2020, through the end of the listed fiscal year. The Peer Group TSR set forth in this table was determined using S&P 500 Consumer Discretionary, which we also use in preparing the stock performance graph required by Item 201(e) of Regulation S-K for our Annual Report on Form 10-K for the fiscal year ended October 1, 2023. |
(6) |
We have determined that adjusted EPS is the financial performance measure that, in the Company’s assessment, represents the most important financial performance measure used to link “compensation actually paid” to our NEOs, for fiscal year 2023, to Company performance (the “Company Selected Measure” as defined in the Pay Versus Performance Rules). Adjusted EPS is a non-GAAP measure. Appendix A includes a reconciliation of adjusted EPS to the most directly comparable measure reported under GAAP as well as information regarding how these measures are calculated. |
(7) |
Mr. Narasimhan was an NEO for fiscal year 2022 but was not appointed as ceo until fiscal year 2023. As a result, Mr. Narasimhan has been included as a non-PEO NEO for fiscal year 2022. |
|
|
|
Company Selected Measure Name |
Adjusted EPS
|
|
|
Named Executive Officers, Footnote |
|
|
|
|
|
Year |
|
PEO |
|
|
|
|
|
|
|
Laxman Narasimhan; Howard Schultz |
|
Rachel Ruggeri, Michael Conway, Bradley E. Lerman, and Sara Kelly |
|
|
|
|
|
Howard Schultz; Kevin Johnson |
|
Laxman Narasimhan; Rachel Ruggeri, John Culver, Michael Conway, and Rachel Gonzalez |
|
|
|
|
|
Kevin Johnson |
|
Rachel Ruggeri, John Culver, Michael Conway, Rachel Gonzalez, Patrick Grismer, and Rosalind Brewer |
|
|
|
Peer Group Issuers, Footnote |
(5) |
In accordance with the Pay Versus Performance Rules, the Company and the Company’s peer group cumulative total shareholder return (the “Peer Group TSR”) is determined based on the value of an initial fixed investment of $100 on September 25, 2020, through the end of the listed fiscal year. The Peer Group TSR set forth in this table was determined using S&P 500 Consumer Discretionary, which we also use in preparing the stock performance graph required by Item 201(e) of Regulation S-K for our Annual Report on Form 10-K for the fiscal year ended October 1, 2023. |
|
|
|
Adjustment To PEO Compensation, Footnote |
(3) |
The following table shows the amounts deducted from and added to the Summary Compensation Table total to calculate “compensation actually paid” to our PEOs in accordance with the Pay Versus Performance Rules: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year |
|
2021 |
|
2022 |
|
2023 |
|
|
|
|
Summary Compensation Table Total |
|
|
$ |
20,425,162 |
|
|
|
$ |
16,718,154 |
|
|
|
$ |
0 |
|
|
|
|
|
- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year |
|
|
($ |
14,755,014 |
) |
|
|
($ |
15,385,875 |
) |
|
|
$ |
0 |
|
|
|
|
|
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year |
|
|
$ |
15,067,557 |
|
|
|
$ |
5,821,334 |
|
|
|
$ |
0 |
|
|
|
|
|
+ Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years |
|
|
$ |
13,773,087 |
|
|
|
($ |
12,178,090 |
) |
|
|
$ |
0 |
|
|
|
|
|
+ Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
|
$ |
6,247,893 |
|
|
|
$ |
6,216,807 |
|
|
|
$ |
0 |
|
|
|
|
|
+ Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
745,921 |
|
|
|
$ |
0 |
|
|
|
|
|
- Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
Compensation Actually Paid |
|
|
$ |
40,758,685 |
|
|
|
$ |
1,938,250 |
|
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year |
|
2021 |
|
2022 |
|
2023 |
|
|
|
|
Summary Compensation Table Total |
|
|
$ |
0 |
|
|
|
$ |
374,558 |
|
|
|
$ |
757,597 |
|
|
|
|
|
- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
+ Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
+ Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
+ Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
- Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
Compensation Actually Paid |
|
|
$ |
0 |
|
|
|
$ |
374,558 |
|
|
|
$ |
757,597 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year |
|
2021 |
|
2022 |
|
2023 |
|
|
|
|
Summary Compensation Table Total |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
14,604,531 |
|
|
|
|
|
- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
($ |
9,717,954 |
) |
|
|
|
|
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
15,160,156 |
|
|
|
|
|
+ Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
275,413 |
|
|
|
|
|
+ Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
+ Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
332,163 |
|
|
|
|
|
- Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
Compensation Actually Paid |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
20,654,309 |
|
|
|
|
Non-PEO NEO Average Total Compensation Amount |
$ 5,232,397
|
$ 7,460,700
|
$ 5,901,721
|
Non-PEO NEO Average Compensation Actually Paid Amount |
$ 6,676,906
|
2,368,335
|
6,365,783
|
Adjustment to Non-PEO NEO Compensation Footnote |
(4) |
The following table shows the amounts deducted from and added to the average Summary Compensation Table total compensation to calculate the average “compensation actually paid” to our non-PEO NEOs in accordance with the Pay Versus Performance Rules. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year |
|
2021 |
|
2022 |
|
2023 |
|
|
|
|
Summary Compensation Table Total |
|
|
$ |
5,901,721 |
|
|
|
$ |
7,460,700 |
|
|
|
$ |
5,232,397 |
|
|
|
|
|
- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year |
|
|
($ |
4,105,805 |
) |
|
|
($ |
4,833,690 |
) |
|
|
($ |
3,466,952 |
) |
|
|
|
|
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year |
|
|
$ |
3,234,333 |
|
|
|
$ |
3,307,886 |
|
|
|
$ |
3,731,194 |
|
|
|
|
|
+ Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years |
|
|
$ |
2,789,345 |
|
|
|
($ |
1,901,074 |
) |
|
|
$ |
153,303 |
|
|
|
|
|
+ Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
|
$ |
430,912 |
|
|
|
$ |
481,320 |
|
|
|
$ |
698,348 |
|
|
|
|
|
+ Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
|
$ |
984,174 |
|
|
|
($ |
290,338 |
) |
|
|
$ |
328,616 |
|
|
|
|
|
- Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
|
($ |
2,868,897 |
) |
|
|
($ |
1,856,469 |
) |
|
|
$ |
0 |
|
|
|
|
|
Compensation Actually Paid |
|
|
$ |
6,365,783 |
|
|
|
$ |
2,368,335 |
|
|
|
$ |
6,676,906 |
|
|
|
|
Compensation Actually Paid vs. Total Shareholder Return |
COMPENSATION ACTUALLY PAID, TSR, AND PEER GROUP TSR
|
|
|
Compensation Actually Paid vs. Net Income |
COMPENSATION ACTUALLY PAID AND NET INCOME
|
|
|
Compensation Actually Paid vs. Company Selected Measure |
COMPENSATION ACTUALLY PAID AND ADJUSTED EPS
|
|
|
Total Shareholder Return Vs Peer Group |
COMPENSATION ACTUALLY PAID, TSR, AND PEER GROUP TSR
|
|
|
Tabular List, Table |
Tabular Disclosure of Most Important Performance Measures In accordance with the Pay Versus Performance Rules, the following table lists the four measures that, in the Company’s assessment, represent the most important financial performance measures used to link “compensation actually paid” to the Company’s NEOs, for fiscal year 2023, to Company performance, as further described in our CD&A within the sections titled “ Fiscal Year 2023 Executive Compensation Overview ” (see page 5 5 ), “ Financial Performance Goals (70%) ” (see page 54 ), “ ” (see page 5 8 ).
|
Most Important Performance Measures |
|
Adjusted EPS (1) (Company selected measure) |
|
|
|
Adjusted Operating Income (3) |
|
Relative Total Shareholder Return |
(1) |
Adjusted EPS is a non-GAAP measure. Appendix A includes a reconciliation of adjusted EPS to the most directly comparable measure reported under GAAP as well as information regarding how these measures are calculated. |
(2) |
Adjusted net revenue is a non-GAAP measure. Appendix A includes a reconciliation of adjusted net revenue to the most directly comparable measure reported under GAAP as well as information regarding how these measures are calculated. |
(3) |
Adjusted operating income is a non-GAAP measure. Appendix A includes a reconciliation of adjusted operating income to the most directly comparable measure reported under GAAP as well as information regarding how these measures are calculated. |
|
|
|
Total Shareholder Return Amount |
$ 114.96
|
103.93
|
136.25
|
Peer Group Total Shareholder Return Amount |
107.23
|
94.25
|
119.15
|
Net Income (Loss) |
$ 4,124.5
|
$ 3,281.6
|
$ 4,199.3
|
Company Selected Measure Amount |
3.618
|
3.01
|
3.002
|
Measure:: 1 |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Name |
Adjusted EPS
|
|
|
Non-GAAP Measure Description |
(6) |
We have determined that adjusted EPS is the financial performance measure that, in the Company’s assessment, represents the most important financial performance measure used to link “compensation actually paid” to our NEOs, for fiscal year 2023, to Company performance (the “Company Selected Measure” as defined in the Pay Versus Performance Rules). Adjusted EPS is a non-GAAP measure. Appendix A includes a reconciliation of adjusted EPS to the most directly comparable measure reported under GAAP as well as information regarding how these measures are calculated. |
|
|
|
Measure:: 2 |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Name |
Adjusted Net Revenue
|
|
|
Measure:: 3 |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Name |
Adjusted Operating Income
|
|
|
Measure:: 4 |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Name |
Relative Total Shareholder Return
|
|
|
Laxman Narasimhan [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
PEO Total Compensation Amount |
$ 14,604,531
|
$ 0
|
$ 0
|
PEO Actually Paid Compensation Amount |
$ 20,654,309
|
0
|
0
|
PEO Name |
Laxman Narasimhan
|
|
|
Howard Schultz [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
PEO Total Compensation Amount |
$ 757,597
|
374,558
|
0
|
PEO Actually Paid Compensation Amount |
$ 757,597
|
374,558
|
0
|
PEO Name |
Howard Schultz
|
|
|
Kevin Johnson [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
PEO Total Compensation Amount |
$ 0
|
16,718,154
|
20,425,162
|
PEO Actually Paid Compensation Amount |
$ 0
|
1,938,250
|
40,758,685
|
PEO Name |
Kevin Johnson
|
|
|
PEO | Laxman Narasimhan [Member] | Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
$ (9,717,954)
|
0
|
0
|
PEO | Laxman Narasimhan [Member] | Fair Value at Fiscal YearEnd of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
15,160,156
|
0
|
0
|
PEO | Laxman Narasimhan [Member] | Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
275,413
|
0
|
0
|
PEO | Laxman Narasimhan [Member] | Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
0
|
0
|
PEO | Laxman Narasimhan [Member] | Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
332,163
|
0
|
0
|
PEO | Laxman Narasimhan [Member] | Fair Value as of Prior Fiscal YearEnd of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
0
|
0
|
PEO | Howard Schultz [Member] | Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
0
|
0
|
PEO | Howard Schultz [Member] | Fair Value at Fiscal YearEnd of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
0
|
0
|
PEO | Howard Schultz [Member] | Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
0
|
0
|
PEO | Howard Schultz [Member] | Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
0
|
0
|
PEO | Howard Schultz [Member] | Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
0
|
0
|
PEO | Howard Schultz [Member] | Fair Value as of Prior Fiscal YearEnd of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
0
|
0
|
PEO | Kevin Johnson [Member] | Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
(15,385,875)
|
(14,755,014)
|
PEO | Kevin Johnson [Member] | Fair Value at Fiscal YearEnd of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
5,821,334
|
15,067,557
|
PEO | Kevin Johnson [Member] | Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
(12,178,090)
|
13,773,087
|
PEO | Kevin Johnson [Member] | Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
6,216,807
|
6,247,893
|
PEO | Kevin Johnson [Member] | Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
745,921
|
0
|
PEO | Kevin Johnson [Member] | Fair Value as of Prior Fiscal YearEnd of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
0
|
0
|
Non-PEO NEO | Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
(3,466,952)
|
(4,833,690)
|
(4,105,805)
|
Non-PEO NEO | Fair Value at Fiscal YearEnd of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
3,731,194
|
3,307,886
|
3,234,333
|
Non-PEO NEO | Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
153,303
|
(1,901,074)
|
2,789,345
|
Non-PEO NEO | Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
698,348
|
481,320
|
430,912
|
Non-PEO NEO | Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
328,616
|
(290,338)
|
984,174
|
Non-PEO NEO | Fair Value as of Prior Fiscal YearEnd of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
$ 0
|
$ (1,856,469)
|
$ (2,868,897)
|