It was the coffee giant's first report of the CEO pay ratio under a new regulatory requirement. The pay ratio includes caveats, and doesn't count Starbucks' industry-leading employee benefits.
Starbucks CEO Kevin Johnson’s total compensation last fiscal year was about $13.4 million, or approximately 1,049 times the $12,754 that the coffee giant’s median employee earned in pay and stock.
This was the first time the Seattle company disclosed its CEO pay ratio, a new reporting requirement for most publicly traded companies beginning with fiscal years starting on or after Jan. 1, 2017. The disclosure was made in the company’s annual proxy statement, filed Friday.
Starbucks undertook a complex calculation to identify a median employee and compensation for purposes of the pay ratio. It settled on what it described as “a part-time barista in California.” Starbucks employees “frequently work in flexible, part-time roles, which has the effect of lowering the annual total compensation for our median partner,” the company said in its filing. It included compensation for employees outside the U.S. But it did not attempt to put a value on the health-care benefits Starbucks has long offered even to part-time employees and a suite of other benefits that are among the most generous in its industry.
The compensation ratio came out days before former Starbucks CEO Howard Schultz announced he was considering running for president in 2020 as an independent. Schultz stepped down from the job in April 2017 to become executive chairman, before retiring in 2018. In Starbucks’ 2016 fiscal year, the last full year Schultz was CEO, his total compensation was more than $21.8 million.
Most Read Business Stories
- As body cameras gain more attention, their uses are expanding well beyond law enforcement
- American Air to book jets to capacity, shelve social distancing
- Tapping funds when you're home-equity rich but cash poor
- We've been isolated for months, and now we hate our home assistants
- Five things to make part of your new financial normal
Using the 2018 median employee pay reported Friday, the pay ratio under Schultz would have been at least 1,700 to 1.