$110 million, Starbucks' new CEO salary surpasses Apple's Tim Cook

Starbucks splurges on its new CEO.

According to filings disclosed on August 14, Starbucks has granted its new CEO Brian Niccol cash and stock worth over $110 million, four times the compensation of his ousted predecessor.

If fully realized, this would also be one of the most expensive compensation packages in the history of U.S. corporations.

Using the S&P 500 CEO pay rankings as a reference, the $110 million compensation surpasses that of Apple CEO Tim Cook ($63 million) and approaches the level of Blackstone Group's Stephen Schwarzman ($120 million), who ranks third on the list.

(Starbucks' offer to Niccol)

Niccol's contract with Starbucks was signed on August 11, 2024. The filings show that Niccol will first receive a $10 million signing bonus and $75 million in equity grants. These equity grants are intended to compensate him for unearned bonuses and stock at his former company, Chipotle.

Each year going forward, Niccol will receive a base salary of $1.6 million and a target bonus ranging from $3.6 million to $7.2 million (225%-450% of his base salary), depending on performance.

Additionally, there is an annual equity award worth $23 million, to be paid out over multiple years.

If all these incentives are fully realized, Niccol will receive over $110 million. Last year, Niccol's total compensation at Chipotle was $22.47 million, along with tens of millions in unvested awards.

Eager to secure talent, Starbucks has offered Niccol additional perks—he doesn’t even need to relocate to Starbucks' Seattle headquarters. Instead, Starbucks will set up a small remote office in Newport Beach, California. Chipotle had previously moved its headquarters from Denver to Newport Beach for Niccol.

The CEO Who Won’t Move

Following this high-profile executive change, Starbucks founder Howard Schultz's longtime friend and current board chair Mellody Hobson revealed the backstory.

In an interview, she said the board had been considering the company’s direction for some time. While the board had no prior connection to Niccol, they viewed him as the best candidate to potentially replace former CEO Laxman Narasimhan.

Hobson had a trusted colleague reach out to Niccol for an initial discussion. She recalled feeling excited when Niccol answered the call and later flew from Europe to California to meet him in person.

The Starbucks board handled the entire recruitment process themselves, using minimal external consultants. Later in the process, they brought founder Schultz into the discussions, and he fully supported the new candidate.

Niccol spent six years at Chipotle, turning the company around and making it one of the industry’s top performers. To lure him away, Starbucks offered him dual roles as CEO and board chair.

Only after everything was finalized was former CEO Narasimhan informed of the board’s decision on Sunday, August 11—the same day Niccol signed with Starbucks.

When Narasimhan moved from the UK to join Starbucks two years ago, he received a compensation package worth over $28 million, including a $1.6 million signing bonus, $9.25 million in equity grants, a $1.3 million base salary, performance-based annual bonuses of 200%-400% of his salary ($2.6 million-$5.2 million), and eligibility for $13.6 million in equity awards.

As CEO of Chipotle, Niccol earned $16.1 million and $14 million in 2019 and 2020, respectively, as the company’s turnaround took hold. In 2021, amid soaring performance and stock prices during the pandemic, his total compensation peaked at $38 million.

Under Niccol’s leadership, Chipotle’s stock surged 770%, significantly boosting the value of his compensation package.

The Turnaround Specialist

Chipotle in 2018 and Starbucks in 2024 share similarities.

From 2015 to 2018, Chipotle faced severe customer traffic declines due to food safety issues, with its stock plunging nearly 50% in one year.

Starting in Q3 2016, activist investor Bill Ackman’s Pershing Square aggressively acquired shares, putting pressure on Chipotle.

At the time, Chipotle had been public for years and operated about 2,000 restaurants.

A year and a half after Pershing Square’s investment, in March 2018, Niccol replaced Chipotle co-founder Steve Ells as CEO, driven by major shareholder Ackman.

Today, Starbucks faces analogous challenges: slowing growth in China, declining U.S. sales, and pressure from activist investor Elliott Investment Management, which has taken a stake and is pushing for change.

Niccol previously took over Chipotle from its co-founder and now steps into Starbucks, a company deeply shaped by its founder. He’s transitioning from leading a U.S.-focused chain with 3,500+ restaurants and 120,000 employees to managing a global coffee empire with nearly 40,000 stores and 400,000 partners.

Early in his career, as marketing chief at Yum Brands’ Taco Bell, Niccol rebranded the chain as a youth favorite, hiring interns to handle its Twitter account with witty engagement. He introduced breakfast, mobile payments, and open-kitchen snacks, stealing business from burrito rival Chipotle—until Chipotle poached him.

At Chipotle, Niccol overhauled the supply chain, invested heavily in restaurant upgrades and staff training, and boosted marketing. These changes repositioned Chipotle as a health-conscious brand—high-protein, low-carb, customizable—allowing it to raise prices multiple times during inflation while remaining more popular than other fast-food chains.

In Q2 2024, Chipotle’s revenue hit a record $3 billion, driven by an 11% year-over-year increase in comparable-store sales, an 8.7% rise in transactions, and operating margins improving to 19.7%.

By comparison, Starbucks’ operating margin was 16.7% in the most recent quarter, while Luckin Coffee’s was 12.5%.

Chipotle’s restaurant-level operating margin reached 28.9% in Q2—remarkable given it has no franchised locations, unlike McDonald’s. For context, KFC China’s restaurant margin was 16.2% in Q2 2024.

During his tenure, Niccol shared many operational insights on earnings calls. Below are key excerpts that may hint at his approach to transforming Starbucks.

April 2018, Opening Remarks:

For those who don’t know me well, I’ll share my core beliefs and leadership principles so you know what to expect.

I believe in results over activity—holding people accountable as business owners. I believe in innovation; to win, we must create and lead change. We need an external focus and the agility to interpret shifts and respond quickly.

I believe in people. Creating a culture that prioritizes running great restaurants, putting customers first, living our purpose, innovating for today and tomorrow, and supporting and recognizing each other is critical.

We’ll innovate better by keeping customers central. Execution will rely on simple choices, clear goals, and aligned metrics.

April 2020, Pandemic Response:

Only about 100 restaurants are fully closed. The rest remain open for takeout and digital pickup/delivery, which is vital when food options are limited. We’re fortunate to have the financial strength to weather this storm.

Amid rapid global changes, we’ve found ways to support employees personally and financially. We’re grateful to those working March 16–May 10 and have raised hourly wages by 10%.

We’ve paid nearly $7 million in discretionary Q1 bonuses to crew, managers, and eligible hourly staff.

We donate surplus food daily to food banks. For National Burrito Day, we gave 100,000 burritos to healthcare heroes.

Chipotle will donate 10% of proceeds to Direct Impact, which provides PPE and medical supplies to frontline workers, through May 31.

We’ve also launched a buy-one-give-one promo: from April 21–26, for every burrito bought online, we’ll donate one to medical workers. We’ll keep supporting those on the frontlines.

As social distancing took hold, we accelerated digital and delivery investments to reduce contact while increasing convenience.

We reprioritized marketing, offering free delivery from March 15 through at least early May. Our national Uber Eats partnership has attracted new customers and increased frequency.

March digital sales grew 103% YoY, accounting for 37.6% of sales. A recent survey showed ~15% of Chipotle customers ordered delivery for the first time in late March.

April 2024, Operational Excellence:

One of Chipotle’s secret weapons is throughput. Peers from Cheesecake Factory to Starbucks track this efficiency metric, but they’d need improvements to match Chipotle’s level.

Niccol aims to restore Chipotle’s 2014 throughput—serving 20–30+ entrees in a 15-minute peak. In Q1 2024, Chipotle neared this goal at ~25 entrees, up from just over 20 in 2023.

“I’m thrilled to report throughput keeps improving. We’ve added nearly two entrees per 15-minute peak vs. last year, accelerating monthly.

We focus on four throughput pillars: expo (speeding up bagging/payment), linebacker (managers stocking lines so staff don’t step back), prepping peak ingredients, and training/positioning staff.

When customers see fast-moving lines, they’ll queue up—better experience, right? Faster throughput means shorter waits, hotter food, and incremental transactions.

Our Boston Financial District location exemplifies this: a year ago, they served ~25 entrees in 15-minute peaks. Now, it’s over 40, sometimes 80—the highest in the company.

Customer satisfaction scores, bonuses, and food quality all rise when throughput improves.”