Earlier this week, after Starbucks’ annual shareholders’ meeting, company investors voted on several initiatives, including a new executive compensation package that would omit diversity and sustainability goals from bonus considerations for top leadership at the company. Shareholders voted overwhelmingly (90% yes votes) to approve the new compensation packages, though the vote is technically nonbinding to company policy.
This bonus initiative was first introduced in 2020 as a company-wide effort to support diversity, equity, and inclusion at Starbucks and was quickly emulated by other major foodservice chains nationally, including Chipotle, which increased the percentage of its executive bonus ties to company ESG goals from 10% to 15% in 2022.
Last year, 7.5% of Starbucks executive bonus consideration was tied to diversity, while 7.5% was based on sustainability goals. In the proposed outline for 2024, 75% of executive bonus consideration would be tied to overall financial performance and 25% would be based on individual performance. Additionally, the company replaced the word “representation” with “talent” in its PRSU (performance-related restricted stock unit grant) program “to include a broader spectrum of the workforce and provide for different representation improvement targets.”