Starbucks (SBUX) Chairman and CEO Howard Schultz did not receive a bonus last year for the second year in a row as the iconic Seattle-based coffee chain shuttered more than 600 stores and reported sliding sales amid a deepening recession.
NEW YORK — Starbucks Chairman and CEO Howard Schultz did not receive a bonus last year for the second year in a row as the iconic coffee chain shuttered more than 600 stores and reported sliding sales amid a deepening recession.
According to a filing with the Securities and Exchange Commission today, Schultz — who reclaimed the CEO title in January last year — received compensation valued by the company at about $9.7 million in fiscal 2008.
That was about 23 percent less than the $12.6 million Schultz got in fiscal 2007.
In the most recent fiscal year, Schultz earned $1.2 million in base salary, the same amount as the prior year. His overall compensation was boosted by stock options worth $7.8 million when granted and perquisites, or “perks,” worth $764,366.
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Those perks included $511,079 for personal security, $13,800 in retirement plan contributions and $236,250 to replace a life insurance benefit the company had previously provided and reimbursements for his personal use of the company plane.
The Associated Press calculations of total pay include executives’ salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
The Seattle-based gourmet coffee chain has struggled for the past year to turn around its sales and profits — a task assigned to Schultz when he took back the CEO chair at the company he helped build.
For the fiscal year ended Sept. 28, the company’s profit dropped 53 percent, partly because of a bevy of costs associated with shutting down more than 600 underperforming stores in the U.S. and more than 60 in Australia. In an attempt to boost its profit and sales, Starbucks also cut more than 1,000 positions — many of which were unfilled — and introduced a slew of new products in 2008, including Vivanno smoothie drinks and breakfast pastries.
The changes have yet to do much to bolster sales or bring profits back to the heady days of the early 2000s due largely to the recession that has forced more consumers to cut back on discretionary purchases.
Starbucks said in the filing that Schultz and other executives also will not receive a raise in base salary in 2009. Most of Schultz’s compensation, the company said, will be tied directly to its share price.
The stock closed today at $9.12, up 7 cents for the day but down more than 50 percent from its 52-week high of $20.68, set Jan. 25, 2008.
The company plans to hold its annual meeting on March 18 in Seattle.