Brian Niccol will receive a sizable pay package once he takes over as the CEO of Starbucks.
Starbucks said Wednesday in a Securities and Exchange Commission (SEC) filing the company will pay Niccol $1.6 million a year as an initial base salary.
The details of his package, which includes other compensation and has company performance requirements, came just a day after Starbucks revealed that Laxman Narasimhan was exiting and that the now-former Chipotle CEO would lead the coffee house chain starting Sept. 9.
On top of the salary, there is a $10 million signing bonus that Starbucks has agreed to give Niccol "in consideration for cash incentive opportunities that are being forfeited from his current employer, as well as equity that would have vested within approximately the next six months."
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The company is giving him a "replacement equity grant" worth $75 million in connection to forfeited Chipotle equity awards that will "consist of 60% performance-based restricted stock units and 40% time-based restricted stock units," according to the filing.
His contract with Starbucks also features eligibility for an annual cash bonus and equity awards.
The annual cash bonus will have a "target of 225% of base salary and a maximum of 450% of base salary, which will be prorated for fiscal year 2024," Starbucks said.
Niccol can get annual equity awards that could amount to $23 million beginning in the next fiscal year, per the filing.
Come early September, he is slated to assume the position of chairman of Seattle-based Starbucks in addition to stepping into the chief executive role, the company said.
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The offer letter Starbucks included in its SEC filing indicated Niccol "will not be required to relocate" to Seattle and has agreed to "commute from your resident to the Company’s headquarters (and engage in other business travel) as is required to perform your duties and responsibilities."
Niccol helmed Chipotle, headquartered in California, for about six years.
"It’s hard to leave such a great company and all of the talented people I’ve had the pleasure to work with, but I depart knowing the business is in great shape and poised for growth with a strong, experienced leadership team," he said in a press release from Chipotle announcing his departure from the fast-food chain.
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In a separate statement, he expressed excitement about joining Starbucks.
"I have long-admired Starbucks iconic brand, unique culture and commitment to enhancing human connections around the globe," Niccol said. "As I embark upon this journey, I am energized by the tremendous potential to drive growth and further enhance the Starbucks experience for our customers and partners, while staying true to our mission and values."
