Published - August 19, 2022 @ 12:51 PM (EET)
Starbucks (NASDAQ:SBUX) announced Thursday that Chief Operating Officer John Culver would leave the company in October after two decades as the coffee chain eliminates the role and undergoes a broader leadership transition.
Mr. Culver will serve as an executive adviser before departing at the end of 2022, while Executive Vice President George Dowdie will also be stepping down next year.
Day-to-day business operations will now report directly to chief executive Howard Schultz while chief strategy and transformation officer, Frank Britt, will oversee some additional functions.
"Our reinvention requires us to rethink our leadership structure to create every opportunity for our new CEO and, most importantly, to accelerate delivery of modernized and elevated experiences for employees and customers," said Schultz.
As part of a separation agreement, Mr. Culver will receive $3.75 million in severance as well as some stock units, stock option awards, and an amount equivalent to the cost of 18 months of ongoing COBRA coverage.
WHY IT MATTERS
Schultz has moved swiftly to make his mark on the company after returning to Starbucks earlier this year as interim CEO for the third time.
In April, Schultz dismissed former General Counsel Rachel Gonzales in a message to employees, criticizing "false promises" and poor short-term decisions by prior management.
While many investors probably sighed with relief when Schultz returned in March as Starbucks' interim CEO, the recent changes are both a blessing and a burden.
Schultz stepped down as CEO for the first time in 2000, and after 22 years, when his first term ended, the company clearly failed to move on from him. Since he has left the position twice already, it's reasonable to assume that he won't stay long.
In addition, both his returns came when the company's management deteriorated and some employees started to unionize, leaving one to wonder whether Starbucks was built for only one successful leader.
On the same day that Starbucks announced Culver's departure, A US judge ordered the coffee giant to reinstate seven employees who were allegedly fired for supporting a union organizing campaign as the company seeks to halt pending nationwide union elections.
Starbucks said it strongly disagrees with the court and will appeal.
