Washington - Starbucks CEO Howard Schultz quite literally
handed the keys to the company to his successor on Wednesday. Reaching into his
pocket during the company's meeting of annual shareholders, Schultz plucked the
door key to Seattle's Pike Place Market store, the company's original location,
and handed it to president and chief operating officer Kevin Johnson, who will
officially succeed Schultz in early April.
"That has been in my pocket for 35 years," he
said.
Schultz has never shied away from turning the usually
drab annual investor meeting into a show of its own - a choreographed event
that has long mixed emotional video, lofty commentary on the state of the
nation and even pop star surprises for its shareholders. Wednesday was no
different, with an appearance from Grammy nominee Leon Bridges, a flag
presentation by the Seattle Recruiting Battalion Colour Guard and the singing
of the national anthem by a chorus of green-aproned Starbucks employees. Even
the corporate secretary, announcing results of shareholder votes, made a joke
about the Oscars.
Yet it was the passing of the torch from Schultz to
Johnson that took centre stage, the most visible handoff yet of the succession
announced in December. The company unveiled a handful of initiatives, from the
expansion of veteran and minority youth hiring programs to new food items in
its stores. A question from a conservative shareholder think tank prompted
Schultz to respond that boycotts over his pledge to hire refugees had
"unequivocally" no impact on the company's business - producing some
of the loudest applause of the event.
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But in the meeting - and in an interview two days before
the shareholder event - Schultz sought to reflect on the culture he'd built at
the coffee giant and reassure investors about the person who would soon take
the reins. "I have so much faith in Kevin's ability and leadership skills
that he's the right person at the right time," Schultz said in an
interview Monday with The Washington Post, comments that he echoed in the
meeting Wednesday. "I think he's better prepared than me to lead the
company into the future."
Stock is down
Still, Johnson will be taking over a company whose sales
in the US have not been on a caffeinated high. This year marks the first time
since the financial crisis that the stock has been down in the year preceding
the annual meeting. As US sales failed to meet analyst expectations five
quarters in a row, investors have driven down shares in Starbucks 4 percent
over the past year, compared with a 15 percent rise in the S&P 500 stock
index. In January, it trimmed its full-year revenue forecast.
Both Johnson and Schultz said they are confident about
the company's growth in China, where it now operates more than 2 600 stores and
is opening more than one store a day, as well as new digital efforts to enhance
ordering and gift-card sharing and new food and coffee options. Schultz, who
will step down from the CEO role but continue on as executive chairman, plans
to lead the company's new high-end Roastery and Reserve brands, as well as
focus on the company's social impact efforts.
That focus was on display in Wednesday's meeting, as
Schultz, known for leading the company with heart-on-his-sleeve talk of
corporate "humanity" and a willingness to enter the public debate on
social issues, spoke about those efforts, from being one of the first companies
to support same-sex marriage to having the "courage, the conviction, to
address the issue of race," a reference to the company's ill-fated
"Race Together" campaign.
Travel ban
Most recently, he was one of the first non-tech CEOs to
speak out about Trump's first travel ban temporarily prohibiting immigrants
from seven majority-Muslim countries, promising to hire 10 000 refugees over
the next five years in 75 countries. The move was lauded by many customers but
also drew boycott threats on social media from the right.
At Wednesday's meeting, a representative from the
National Centre for Public Policy Research, a conservative think tank, asked
about what the hiring of refugees would cost Starbucks and whether it was
politically driven. After boos from the audience, Schultz replied that he could
"unequivocally" say "there is zero, absolutely no evidence
whatsoever, that there's any dilution in the integrity of the Starbucks brand,
our reputation or our core business as a result of being compassionate."
"If there's one message that I hope you came away
with today it's that none of the things that we have tried to do as a company,
which is based on humanity and compassion, is based on politics," he said.
"It's based on principles and our core beliefs."
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Schultz's comfort with wading into social issues from the
corner office has led to frequent speculation that he may have aims on
political office, and an annual meeting that begins with a national anthem
could prompt some to believe the rumours. Over the years, Schultz has by turns
batted down that idea in op-eds and fuelled it with statements in interviews
like "let's see what the future holds."
But as he moves into the chairman's seat, Schultz again
reiterated in an interview Monday that "I don't have any plans to run for
political office." (Is there any chance he would consider it?
"No," Schultz said.) He does, however, intend to take that "social
impact" part of his mandate seriously. "As I have more time on my
hands then I have had as CEO, I hope that I can work toward elevating the
national conversation on a more compassionate society, on a more compassionate
government, and work alongside like-minded CEOs and government officials,"
he said.
Schultz says such lofty remarks aren't made to draw more
attention to him. "I'm not looking to make news as it relates to Howard
Schultz," he said. "What I am looking to do is to continue to be a
respectful, positive voice for humanity and for civil discourse on the things
that I think are important."