Longtime consumer products executive Laxman Narasimhan will succeed Howard Schultz as Starbucks CEO, replacing the three-time chief executive this fall.
Narasimhan was the chief executive of U.K.-based Reckitt, which makes Lysol, baby formula products and other household goods. He starts Oct. 1 as incoming CEO, and will fully take over in April. Schultz will remain on the board after the transition.
In a statement, Narasimhan said Thursday that he will work with Schultz, the leadership team and Starbucks’ rank-and-file workers to “lead the company into its next chapter.”
Schultz stepped in as interim CEO after Kevin Johnson announced in March that he would retire. Schultz returned to the company he’d built into a worldwide coffee juggernaut amid a unionization movement in Starbucks stores across the U.S. Over 211 stores have successfully unionized, according to the National Labor Relations Board.
Since Schultz’s return, the company closed 16 stores across the U.S. — including six in the Puget Sound area — due to safety concerns. The closures are part of Starbucks’ so-called “Reinvention” project. Schultz said in June during a DealBook New York Times conference that unions have no place in the project.
Starbucks has replaced key executives in the center of the union fights. Rossann Williams resigned as head of North America in June, and general counsel Rachel Gonzalez was removed in April.
The company also saw its sales hurt in China, its second-largest market, because of COVID-19 restrictions that forced the coffee giant to close stores.
Narasimhan announced Wednesday he would step down as CEO of Reckitt, a role he held since 2019. He has held previous executive roles at PepsiCo and McKinsey, and is a trustee of the Brookings Institute, a Washington, D.C., think tank. PepsiCo bottles and distributes Starbucks’ ready-to-drink beverages, which Starbucks has cited as a steady source of revenue for the company.
“The perspectives he brings will be a strong asset as we build on our heritage in this new era of greater well-being,” Schultz said in a statement about Narasimhan. Narasimhan’s base annual salary will be $1.3 million, according to a document filed with the U.S. Securities and Exchange Commission.
Narasimhan was raised in India and came to the United States 31 years ago to pursue a master’s degree and MBA at the University of Pennsylvania. He speaks six languages — English, Spanish, German and three Indian languages. Narasimhan is relocating from London to Seattle.
Narasimhan joined Reckitt at a time when the consumer goods company was facing a cyberattack, a failed product launch, production glitches and flat performance by core brands.
Besides those issues, consumers were turning away from Reckitt due to Narasimhan’s predecessor’s pitch that sales of premium over-the-counter medicine would accelerate in the developing world, led by increasing income and higher health care standards. The failed decision affected a division of Reckitt that is responsible for two-thirds of its sales. Brazilian executive Nicandro Durante will take over the helm of Reckitt.
During his three years as CEO, investors said Narasimhan helped bring the company’s performance back to sustainable levels.
In a statement Thursday, Starbucks board chair Mellody Hobson described Narasimhan as an “inspiring leader” poised to accelerate the company’s growth.
“His understanding of our culture and values, coupled with his expertise as a brand builder, innovation champion and operational leader will be true differentiators as we position Starbucks for the next 50 years,” Hobson said.
Narasimhan will spend the coming months “fully immersed” in Starbucks, working with the management team and Schultz to familiarize himself with the plan Schultz put in place during his brief third tenure as CEO. Narasimhan is expected to visit Starbucks stores and manufacturing facilities during the transition period.
“The Reinvention and investments in the partner and customer experiences position us to meet the changing demands we face today and set us up for an even stronger future,” Narasimhan said in a statement.
Schultz will remain closely involved with the company’s “Reinvention” and act as an adviser to Narasimhan after the transition is complete, according to Starbucks. The announcement made no mention of the unionization effort or the company’s labor troubles.