Starbucks has announced that Indian-born Laxman Narasimhan has its next CEO. Laxman Narasimhan will join the US coffee brand in October but will take over the top role in April 2023. Until then, Howard Schultz, the interim CEO, will continue to run Starbucks.
Laxman Narasimhan joins the list of Indian-born CEOs of leading companies around the world such as Sundar Pichai at Google, Leena Nair at Chanel and Parag Agrawal on Twitter. According to a statement from Mellody Hobson, president of Starbucks, to the Wall Street Journal, “We have asked Schultz to remain as interim CEO until April 2023 to assist the new CEO. Narasimhan will take over as CEO on April 1. He will take over the world’s largest coffee chain across multiple locations and sales.”
The 55-year-old previously served as CEO of Lysol and Enfamil baby formula, UK-based Reckitt Benckiser Group Plc. Schultz mentions that he is now in a “unique position” to run Starbucks. “As I had the opportunity to meet him, it was clear that he shares our passion for investing in humanity and our commitment to our partners, customers and communities,” he said in a statement.
Laxman Narasimhan salary
Narasimhan will be paid $1.3 million as his annual base salary, as mentioned in a regulatory filing. He will also receive a $1.5 million cash signing bonus, as well as a replacement capital grant with a target value of $9.25 million, to offset the incentives he will lose by parting with Reckitt Benckiser. Beginning in the fiscal year 2023, he will also be eligible for annual capital awards equal to $13.6 million.
“Starbucks’ commitment to uplifting humanity through connection and compassion has long set the company apart, building an unrivalled and globally admired brand that has transformed the way we connect with coffee. I am honoured to join this iconic company at such a pivotal time, as reinvention and investments in partner and customer experiences position us to meet the changing demands we face today and prepare us for an even stronger future. Narasimhan said.
Schultz has been at the helm since April, when his handpicked successor, Kevin Johnson, stepped down after five years in the job. Schultz returned to the company as its interim CEO, earning just $1 on his salary. Meanwhile, Schultz and the Starbucks board were searching for a long-term successor, with the intention of announcing the new CEO in the fall.
Who is Laxman Narasimhan?
Laxman Narasimhan is an Indian-American business executive who was CEO of Reckitt Benckiser and was previously Chief Commercial Officer of PepsiCo. Narasimhan grew up in Pune and is married with two children. He lives in Greenwich, Connecticut, and speaks six languages.
Schultz has previously said that he wants to reinvent the employee, customer and store experience to take into account how the world has changed since the pandemic. The company is holding an investor day on September 13 in Seattle, where it is expected to reveal more details about the bold changes it plans to make.
Starbucks said in a news release that Schultz will remain “closely involved” with the plan and will act as an adviser to Narasimhan.
Narasimhan previously worked at PepsiCo, where she served as a global chief commercial officer, among other roles. Before working at the food and beverage giant, he was a senior partner at McKinsey.
As CEO, he will have to deal with a number of challenges. In its home market, Starbucks is facing a union push, with more than 200 stores in the US voting to organize under Workers United. The battle has resulted in negative headlines and legal battles. Inflation hasn’t affected sales yet, but it has raised menu prices. And China, its second-biggest market, is struggling to recover from the pandemic, hampered by the country’s zero-Covid policy.
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