Brian Niccol, CEO of Chipotle
Anjali Sundaram | CNBC
Starbucks New CEO and Chairman Brian Nichol was offered a salary increase and a huge one-time bonus to entice him to step down from his previous position as CEO. Chipotle Mexican Restaurant.
Nicol will officially take the reins at the struggling coffee chain on September 9. As CEO, he will be tasked with turning around the company’s slumping sales, improving the in-store customer experience, and figuring out what to do with the company’s struggling China business. It’s a huge task — and he’ll be well compensated for it.
Starbucks disclosed Nichol’s pay plan in a filing Wednesday. The majority of his compensation package consists of stock that vests over time and is based on the company’s performance targets and other metrics. In his first year, his pay package could be worth up to $116.8 million if the company hits its targets and fully vests.
Nicole will receive a base salary of $1.6 million per year, with the opportunity to earn up to $7.2 million in cash. He will also be eligible for annual stock awards worth up to $23 million.
Under his decision to leave Chipotle, Niccol will receive a $10 million cash bonus and $75 million in stock to replace the losses he lost by leaving the burrito chain. The stock will vest over three to four years, based on the company’s performance and Niccol’s length of tenure.
“Brian Nichol has proven to be one of the most effective leaders in our industry, delivering significant financial returns over many years,” Starbucks said in a statement. “His compensation at Starbucks is directly tied to the performance of the company and the shared success of all of our stakeholders. We are confident in his ability to deliver long-term, lasting value to our partners, customers and shareholders.”
At Chipotle, Niccol earned a base salary of $1.3 million last year, with total compensation of $22.5 million. Stock and options awards made up the bulk of his earnings, but he also received a cash bonus of $5.2 million.
During his tenure at Chipotle, the stock rose 773%, increasing his total compensation.
Nicol’s pay package is also more generous than that of his ousted predecessor, Lakshman Narasimhan. His base salary was $1.3 million, with potential cash bonuses of up to $5.85 million and stock awards of $13.6 million, according to filings. In fiscal 2023, Narasimhan’s compensation was estimated at $14.6 million, mostly from stock awards.
Unlike Narasimhan, who was previously based in the UK, Nicole will not be required to move to Starbucks' Seattle headquarters.
— CNBC's Kate Rogers contributed to this report.
