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Longtime Starbucks chief Schultz hands key to new CEO

Starbucks CEO Howard Schultz speaks at the Starbucks annual shareholders meeting, Wednesday, March 22, 2017, in Seattle. (Elaine Thompson / Associated Press)
Starbucks CEO Howard Schultz speaks at the Starbucks annual shareholders meeting, Wednesday, March 22, 2017, in Seattle. (Elaine Thompson / Associated Press)

Howard Schultz’s last Starbucks shareholders meeting as CEO began with patriotic flourishes, ended with the passing of a key from Schultz to his successor, and was peppered throughout with talk of core values, principles and compassion.

It was, in other words, a very Schultz-ian way to end his tenure atop the company he built into a global empire.

Schultz will become executive chairman and focus on the company’s higher-end businesses, including the Roasteries.

Some 3,300 Starbucks employees, shareholders and guests packed McCaw Hall Wednesday for the annual extravaganza, where the company recaps notable accomplishments of the past year, outlines its direction for the next year and welcomes a surprise guest star.

The meeting this year opened with the singing of the national anthem by members of Starbucks’ employee choir, joined by the Seattle Recruiting Battalion Color Guard.

It was, perhaps, a nod to the barrage of criticism the company received after Schultz announced earlier this year that Starbucks would hire 10,000 refugees globally over the next five years. His announcement, a reaction to President Donald Trump’s executive order temporarily banning all refugee entry into the U.S., sparked anger from Trump supporters who criticized Schultz for not emphasizing the hiring of Americans, including veterans.

Starbucks has in fact hired thousands of veterans – a point it made emphatically during Wednesday’s meeting as it set out a number of new hiring goals.

The company said it had reached its previously announced goal of hiring 10,000 U.S. military veterans and active-duty spouses a year ahead of schedule, and set a new, expanded goal of hiring 25,000 veterans and military spouses by 2025.

It held firm to its pledge to hire 10,000 refugees at stores around the world, saying it would work with the United Nations and other organizations to find and train refugee candidates.

Schultz said Starbucks has seen no “brand dilution” nor hits to its business because of that refugee commitment, contrary to some reports.

He added that “not every decision is an economic one.” The decision was based on compassion and the company’s principles and values, not politics, he said.

Schultz also said Starbucks has hired 40,000 young Americans who aren’t employed or in school, far exceeding its goal of hiring 10,000 by 2018. Its next goal is to hire 100,000 by 2020.

The company plans to open 12,000 new stores globally over the next five years, creating 240,000 jobs, 68,000 of them in the U.S.

Incoming CEO Kevin Johnson, who starts his new role April 3, talked about some developments in Starbucks’ food and digital offerings.

The company is testing a lunchtime menu, called Starbucks Mercato, featuring grab-and-go salads and sandwiches made fresh daily. It will launch next month in 100 Chicago stores and, depending on customer reception, will expand to other markets.

On the digital front, some Ford vehicle owners should soon be able to place Starbucks orders using voice command in their cars. Starbucks earlier this year had announced the ability to order by voice through Amazon’s Alexa platform (as well as through Starbucks’ own My Starbucks barista feature on its mobile app). With the planned integration of Alexa into Ford vehicles, owners of the cars equipped with SYNC3 will be able to place voice orders for Starbucks beverages using Alexa.

The company also announced that shareholders had elected to the board three new directors: Satya Nadella, CEO of Microsoft; Rosalind Brewer, former president and CEO of Sam’s Club; and Jorgen Vig Knudstorp, executive chairman of Lego Brand Group. A shareholder proposal to amend Starbuck’s proxy access bylaws was not approved.

During the question-and- answer period, a couple of shareholders asked about Starbucks’ recently expanded parental-leave policy, which offers far more generous benefits to corporate employees than baristas.

Johnson said that after boosting employee wages and boosting what it’s paying employees for the first six weeks of parental leave, the company “had to make a hard decision how to prioritize.”

“That said,” he added, “we are always taking feedback from our partners. This is just one point in time.”

A questioner from environmental group Stand.earth, which had erected a “monster” made of used Starbucks cups outside the meeting Wedneday morning, asked the company to commit to using fully recyclable cups.

Starbucks paper cups are coated with plastic on the inside, which makes the cups not recyclable in many areas. (They are recyclable in Seattle.)

Johnson, who offered to meet with the questioner, said Starbucks has “done quite a bit in the industry to make our cups green,” adding that the hot cups contain 10 percent post-consumer fiber, and that the company offers incentives for consumers to use reusable cups.

The musical guest at this year’s meeting was soul singer-guitarist and songwriter Leon Bridges, from Fort Worth, Texas.

As the formal portion of the meeting drew to an end, Johnson acknowledged the enormity of the role he would be stepping into, saying, “I know I have venti shoes to fill.”

Schultz then took the key for the historic Pike Place Starbucks store – the second location of the first Starbucks store – out of his pocket. It’s something he’s kept with him for nearly 30 years, he said.

“I am proud to give Kevin the key to the company and to the Pike Place store.”


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