New company leader will have hands full with unionization wave
Starbucks has announced that Laxman Narasimhan will become the company’s next CEO and a member of the Starbucks Board of Directors.
Narasimhan, who previously served as CEO of The Reckitt Benckiser Group in England, will join the coffee giant as incoming CEO on October 1, 2022. He’ll work closely with interim CEO Howard Schultz before taking over and joining the board on April 1, 2023.
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“Laxman is an inspiring leader,” said Mellody Hobson, Independent Starbucks Board of Directors chair. “His deep, hands-on experience driving strategic transformations at global consumer-facing businesses makes him the ideal choice to accelerate Starbucks growth and capture the opportunities ahead of us. 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, generating value for all our stakeholders.”
Schultz, who filled in after former CEO Kevin Johnson retired in April, will remain on the Seattle-based company’s board. Schultz built Starbucks into one of the world’s most recognized brands. Under his leadership from 1987 to 2018, Starbucks grew from 11 stores with 100 partners to more than 28,000 stores in 77 countries. As CEO, he pioneered programs like comprehensive healthcare, stock ownership and free college tuition for full and part-time employees.
“When I learned about Laxman’s desire to relocate, it became apparent that he is the right leader to take Starbucks into its next chapter,” Schultz said. “He is uniquely positioned to shape this work and lead the company forward with his partner-centered approach and demonstrated track record of building capabilities and driving growth in both mature and emerging markets. As I have had the opportunity to get to know him, it has become clear that he shares our passion of investing in humanity and in our commitment to our partners, customers, and communities. The perspectives he brings will be a strong asset as we build on our heritage in this new era of greater well-being.”
Narasimhan has held various leadership roles at PepsiCo, including as global chief commercial officer. He also served as CEO of the company’s Latin America, Europe and Sub-Saharan Africa operations. Prior to PepsiCo, Narasimhan was a senior partner at McKinsey & Company, where he focused on its consumer, retail and technology practices in the U.S., Asia and India. Narasimhan is also a trustee of the Brookings Institution, a member of the Council on Foreign Relations and a member of Verizon’s Board of Directors. He also served as a member of the UK Prime Minister’s Build Back Better Council.
“I’m humbled to be joining this iconic company at such a pivotal time, as 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.
Narasimhan joins in the midst of the saga between Starbucks and its employees’ unionizing efforts, which escalated last week as the National Labor Relations Board’s (NLRB) Seattle office claimed the company is violating labor law by withholding pay hikes and other benefits from stores that have voted to unionize.
The complaint, based on charges filed by Starbucks Workers United, says that the company is offering raises, increased training, career development opportunities, expanded tipping and looser dress code policies only to non-union stores.
In May, Schultz said U.S. labor law requires union stores to negotiate their own contracts with the company. “We do not have the same freedom to make these improvements at locations that have a union,” Schultz said in a conference call with investors. In 2019, the NLRB ruled that employers can treat union and non-union employees differently, but only if the employer doesn't have an anti-union motive for doing so, ABC News reported.
Unless a settlement is reached, the complaint will be considered by an NLRB administrative law judge at a hearing set for Oct. 25. Once a decision is reached, either side can appeal to the full NLRB in Washington.