Starbucks Chairman and CEO Howard Schultz speaks during the annual shareholder meeting in Seattle, Washington on March 22, 2017.
Jason Redmond | AFP | Getty Images
Starbucks’ next CEO will come from outside the company, acting chief Howard Schultz told the Wall Street Journal.
Schultz returned for his third stint in the top job in April following the departure of former CEO Kevin Johnson. Despite speculation from analysts and investors, he has publicly denied that he intends to stay on as CEO for the long term. The company’s board said Monday it was on track to appoint a successor this fall. Schultz will remain as interim CEO until the first quarter of the company’s fiscal year 2023, which is near the end of the calendar year.
“This timeline provides the company with the ideal runway for a smooth transition and continuity of leadership throughout the 2022 holiday season as business transformation continues,” Starbucks said.
Schultz will remain on the company’s board of directors.
Whoever takes the reins will inherit a business still recovering from the Covid pandemic, particularly in China, and facing a growing effort by baristas to unionize in the United States. The company is also modernizing its American cafes to match the way customers want to order and choose their coffees and is striving to achieve ambitious sustainability goals.
“For the future of the business, we need an area of experience and expertise in a number of disciplines that we currently don’t have,” Schultz told the Journal.
Schultz waged an aggressive campaign against union pressure, which weighed on Starbucks’ stock. Shares have fallen 13% since he returned to the company.
Union efforts could also be the reason the company is looking for new blood.
“The publicity about unionization could be a factor pushing the company to look outside for a company culture built on the benevolence of Mr. Schultz,” Cowen analyst Andrew Charles wrote to clients in March after the announcement of the search for a CEO.
Labor organizers and the National Labor Relations Board have accused Starbucks of illegal labor practices, which the company has denied. Workers United, the union that supports organizing efforts at Starbucks, said in a filing on Friday that the coffee chain violated federal labor laws by permanently closing a unionized store in Ithaca, New York. A Starbucks spokesperson told CNBC that opening and closing stores is an integral part of its business.
Read more about Schultz’s thoughts on Starbucks succession plans here.