Starbucks CEO resigns just before Senate testimony
Poised to testify before the Senate Health, Education, Labor and Pensions Committee later this month, Howard Schultz has stepped down from his position as interim Starbucks CEO, making way for his successor, Laxman Narasimhan, two weeks earlier than initially planned, as The Hill reports.
While the official transition at the top of the company was set for April 1, Narasimhan was tapped for the CEO role back in September and has spent the intervening months learning about a wide range of company functions, according to CNBC.
Schultz exits Starbucks...again
A veteran of Starbucks leadership, Schultz served as company CEO for three different periods – from 1986 to 2000, from 2008 to 2017, and then his most recent tenure as interim leader, which spanned 2022 to 2023.
In a letter to his fellow company executives, Schultz wrote, “Today, I am entrusting you all with Starbucks – something that holds a place in my heart second only to that of my beloved family,” but as he told CNBC last year, he has no plans to ever return to the helm of the coffee giant again.
During his most recent stint leading the company, Schultz suspended its buyback program, battled over baristas' attempts to unionize, and revamped the company's modernization plans, as the outlet noted.
Notably, since Schultz's return as interim CEO, company stock witnessed a roughly 8% increase in price, raising the total market value to $113 billion, according to CNBC.
Sanders threatens subpoena
Schultz's farewell comes in the wake of a contentious battle in which the company had been engaged with Sen. Bernie Sanders (I-VT), chair of the Health, Education, Labor, and Pensions Committee in the upper chamber.
Sanders has had an ongoing interest in probing numerous complaints against Starbucks alleging that the company ran afoul of federal labor law and had threatened to hold a vote on issuing a subpoena to Schultz earlier this month, as NBC News noted.
Speaking to the outlet, Sanders explained, “Look, the bottom line here is not complicated. You have a multibillionaire named Mr. Schultz, who's head of a profitable, multinational corporation, who apparently thinks that he doesn't have to pay attention to the law.”
“That's not what should go on in America. We all should have one system of justice, whether you're a billionaire or whether you're anybody else. And unfortunately, we don't have that right now. So I look forward to having Mr. Schultz before the committee to answer questions why he things he can break federal law,” Sanders added.
Company pushes back
However, Starbucks was apparently not enthusiastic about the idea of its now-former CEO appearing before Sanders' committee, with acting executive vice president and general counsel Zabrina Jenkins asserting, according to NBC News, “Respectfully, Howard Schultz is not the right witness for the hearing.
Jenkins further argued against Schultz's appearance by stating that he “assumed the interim CEO role nine months after the issues regarding unions arose and has been focused on the reinvention plan of Starbucks since that time.”
The company offered alternatives who might fill in for Schultz at any committee proceeding, specifically suggesting Jenkins herself, vice president for partner and labor relations, May Jensen, or executives vice president and chief communications officer A.J. Jones II, according to NBC.
Sanders, however, was not swayed, and he pledged to move forward with a subpoena vote in which he evidenced strong confidence of success.
Not long after Sanders indicated his plan to hold the aforementioned vote, Schultz agreed to provide testimony to the Senate panel as requested, as CNBC noted separately.
Schultz is slated to appear before the committee on March 29, and the company said in a statement, “Through the agreement reached today, our testimony will seek to foster a better understanding of our partner-first culture and priorities, including our benefit offerings and our long-standing commitment to support the shared success of all partners.”
Notably, more than 500 allegations of unfair labor practices have been filed with the National Labor Relations Board against Starbucks – including some accusing the company of engaging in retaliatory employment actions and store closures.
That factual backdrop, combined with Sanders' apparently high degree of preexisting skepticism, could make for a very bumpy day on Capitol Hill when Schultz finally heads to Washington at the end of the month.