Pay freeze for Starbucks's CEO, other top executives. Store managers and roasters still eligible for raises.

Share story

Howard Schultz and about 130 other Starbucks executives will receive no salary increases next year, according to a memo to employees on Monday that is posted at StarbucksGossip.com.

Schultz’s salary has been $1.2 million since 2004, although other compensation has varied. Last year, his total compensation was $10.6 million.

The memo said the pay freeze includes everyone at the U.S. vice president level and above.

The pay freeze applies to fiscal 2009, which begins Sept. 29. Starbucks said the memo is authentic.

In the memo, head of human resources Chet Kuchinad said that in fiscal 2009, a 3.5 percent salary increase will be available for eligible U.S. store managers, assistant store managers, retail management trainees, district managers and most hourly roasting plant employees.

Hourly employees in U.S. stores will continue to follow current guidelines for merit increases, he wrote. Other eligible U.S. employees below the vice president level who have a certain performance rating will receive 2 percent flat salary increases.

It is not clear whether executives will forego bonuses for fiscal 2008, although Kuchinad’s memo said, “We are not currently on track to reach the requisite financial targets” for the incentive plan. More information about bonuses will be available when Starbucks releases fiscal year earnings in November, he said.

“While faced with a tough environment,” he wrote, “we are energized and remain focused on our efforts to strengthen the business and build long-term value. This year, more than ever, we must come together to provide the Starbucks Experience to our customers in order to ensure the long-term health of the business — so that all partners can share in our future success.”

Starbucks stock rose 8 cents at $15.59 on Wednesday.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com