Starbucks’ Howard Schultz Steps Down From Executive Board

Key takeaways

• Starbucks former three-time CEO, Howard Schultz, has stepped down from the board
• His latest stint as CEO ended earlier this year and drew criticism around his alleged anti-union stance
• Starbucks shares dipped 0.6% in after-hours trading on Friday

Howard Schultz is retiring from Starbucks — and this time, it will probably stick. The man is a legend at the popular coffee chain, having held the top at Starbucks no less than three times, the most recent of which being last year when the company needed someone — fast.

The move has left Starbucks’ stock price down, though investors should look on the bright side and focus on whether the global coffee brand can deliver on its promises at its last investors day earlier this year. Let’s get into the details of Schultz’s departure and what life without Schultz looks like for Starbucks.

What’s happening at Starbucks?

Former CEO Howard Schultz has confirmed he’s stepping down from Starbucks’ board. “I look forward to supporting this next generation of leaders to steward Starbucks into the future as a customer, supporter and advocate in my role as chairman emeritus,” Schultz said in a statement, elaborating that he will now focus on various philanthropic initiatives.

Schultz is a Starbucks legend, first taking the reins in 1986 when Starbucks was a small coffee chain and turning it into a powerhouse national brand. He retired in 2000 but was back again from 2008 to 2017. His latest stint as CEO was for 11 months as the company struggled with recovering after the pandemic, with Laxman Narasimhan taking over in April this year.

His latest stint as CEO drew criticism from the likes of Senator Bernie Sanders and the Starbucks Workers United union over Schultz’s hard-line position about baristas unionizing, which ended up seeing the former CEO grilled by a Senate committee over the Starbucks’ alleged union busting.

Wei Zhang will take Schultz’s spot on the board, having previously served as a senior advisor to Alibaba and as president of Alibaba Pictures Group. China is Starbucks’ biggest market outside of the U.S.

What was the market reaction?

Given Schultz’s impact on Starbucks, taking the coffee chain to 36,000 stores worldwide and with over $30 billion a year in yearly revenue, it’s disappointing for Wall Street to see the business titan finally step away from the helm once and for all. Shares in Starbucks fell 0.6% in after-hours trading on Friday; the stock has decreased 3.9% so far this year.

But the last investor day Starbucks held around a year ago promised strong growth. Starbucks’ COO, John Culver, said that the global brand planned to open 2,000 more stores from 2023 to 2025, delivering a 50% return on investment and 25% cash margins.

China was also a key growth driver for the company, with a whopping 9,000 stores operating by 2025. Now all that’s left is for Starbucks to deliver what it’s promised.

The bottom line

Howard Schultz is a big name for Starbucks and the business world, so losing an MVP would always be a blow. But the coffee chain has been operating without him at the helm for a few months now — it’s time for Wall Street to give Narasimhan a chance to make a mark.