UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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☐ | Soliciting Material Pursuant to §240.14a-12 |
STARBUCKS CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Cover La Lucila, Greater Buenos Aries. First Starbucks store in Argentina with Drive Thru.
Letter to Our
Shareholders
Dear Fellow Shareholders:
Thank you for your support of Starbucks in 2018. This was a pivotal year for the Company, as we continued to streamline the business to amplify our focus on core value drivers and, with Howard Schultzs retirement, transitioned from founder-led to founder-inspired. Our goal is to drive growth at scale, and in many respects, it is a new era at Starbucks: we are growing off a larger base, requiring a sharper strategic focus and greater discipline. Nevertheless, Starbucks mission, values and guiding principles remain core to who we are as a Company.
Sustainable, long-term growth
Our view is that to continue to drive sustainable growth, we must evolve our relevance to customers and executing against this vision requires focus on our most important strategic priorities. To that end, we began streamlining our business in 2017, and in 2018 we advanced this initiative through a combination of retail market alignment, business simplification and the landmark deal to form the Global Coffee Alliance with Nestlé. While these measures are part of our long game, we began to see significant traction by year-end. Our record fourth quarter performance reflected meaningful sequential improvement in virtually every critical operating metric. Moreover, we entered fiscal 2019 executing against a clear growth agenda, with a focus on our long-term growth markets, the U.S. and China.
Effective executive leadership
As we enter this next phase of driving growth at scale, we are transforming to increase the velocity of innovation that is relevant to our customers, inspiring to our partners and meaningful to the business. We are embracing change and have evolved the executive leadership team to match current needs. Key additions in the past year and a half include Rosalind G. Brewer as our chief operating officer; Rachel A. Gonzalez as general counsel and secretary; and Patrick J. Grismer as chief financial officer. All bring exceptional qualifications to their important roles and value to an already strong executive leadership team that will drive growth in the years ahead.
High-functioning board
The board of directors remains as high functioning and engaged as ever, continuously monitoring the Companys business strategy, leadership, operations and risk management in the dynamic business environment in which we operate. Our governance is values-based, and the board has long been comprised of accomplished leaders representing diverse backgrounds and experience. After adding three new independent directors in 2017, Howards retirement along with the departure of other long-serving members in 2018 updated the dynamic in the boardroom. We move forward with an average tenure of just eight years, an independent board chair and vice chair and three strong leaders, Jørgen Vig Knudstorp, Mary N. Dillon and Mellody Hobson, as chairs of our Nominating and Corporate Governance Committee, Compensation and Management Development Committee and Audit and Compliance Committee, respectively. Your board exhibited strong oversight and engagement on our strategy, collaboration with management and advocacy on the part of shareholders in 2018, and we look forward to engaging with you and obtaining your feedback through Starbucks governance outreach program in the year ahead.
Partnerships and community
Starbucks success has always been linked to the meaningful relationships we have with our partners and how we serve our communities. Starbucks mission, values and guiding principles are core to our focus on amplifying the brand. We have every confidence that our commitment to care for our partners, to serve our communities, to innovate and to pursue operational excellence in every market will keep us on the right path for long-term, sustainable growth.
On behalf of our board of directors and management team, we cordially invite you to attend the 2019 Annual Meeting of Shareholders on March 20, 2019 at 10:00 a.m. PT. Please note the new location at the WAMU Theater next to CenturyLink Field, in Seattle, Washington. More information about attending the Annual Meeting appears on the back cover of this proxy statement. The matters to be acted upon are described in the notice of Annual Meeting of Shareholders and the proxy statement. At the Annual Meeting of Shareholders, we will also report on our operations and respond to questions from shareholders.
As always, we anticipate a large number of attendees at the Annual Meeting of Shareholders. The new location at WAMU Theater allows us to increase the seating capacity, however, seating will be on a first-come, first-served basis. As we have done before, we will also provide a live webcast of the meeting from the Investor Relations website at http://investor.starbucks.com. We hope this provides those unable to attend the meeting the opportunity to hear Starbucks leaders discuss our operating results and plans for the future.
Thank you for your continued investment in Starbucks.
Warm Regards,
Myron E. Ullman III independent board chair |
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Kevin R. Johnson president and ceo |
Starbucks Corporation
2401 Utah Avenue South
Seattle, Washington 98134
Notice of Annual Meeting
of Shareholders
The 2019 Annual Meeting of Shareholders (Annual Meeting) of Starbucks Corporation will be held at WAMU Theater next to CenturyLink Field, located at 800 Occidental Avenue South, in Seattle, Washington, on March 20, 2019 at 10:00 a.m. (Pacific Time) for the following purposes:
1. | To elect 10 directors nominated by the board of directors to serve until the 2020 Annual Meeting of Shareholders; |
2. | To approve an advisory resolution on our executive officer compensation; |
3. | To ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending September 29, 2019; |
4. | To consider shareholder proposals described in the accompanying proxy statement, if properly presented at the Annual Meeting; and |
5. | To transact such other business as may properly come before the Annual Meeting. |
Only shareholders of record at the close of business on January 10, 2019 will be entitled to notice of, and to vote at, the Annual Meeting and any adjournments or postponements thereof.
YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the Annual Meeting, we urge you to cast your vote and submit your proxy in advance of the Annual Meeting by one of the methods below. Make sure to have your proxy card or voting instruction form (VIF) in hand:
Submitting your proxy now will not prevent you from voting your shares at the Annual Meeting, as your proxy is revocable at your option. Shareholders may also vote in person at the Annual Meeting. If you are a registered shareholder (that is, you hold your shares in your name), you must present valid identification and proof of share ownership to vote at the Annual Meeting. If you are a beneficial shareholder (that is, your shares are held in the name of a broker, bank or other holder of record), you will also need to obtain a legal proxy from the registered shareholder to vote at the Annual Meeting.
Rachel A. Gonzalez
executive vice president, general counsel and secretary
Seattle, Washington
January 25, 2019
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on March 20, 2019. Our proxy statement follows. Financial and other information concerning Starbucks is contained in our Annual Report. The proxy statement and Annual Report are available on our Investor Relations website at http://investor.starbucks.com. Additionally, you may access our proxy materials at www.proxyvote.com, a site that does not have cookies that identify visitors to the site.
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This proxy statement contains forward-looking statements regarding Starbucks current expectations within the meaning of the applicable securities laws and regulations. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. These risks and uncertainties include, but are not limited to, the risks detailed in the company filings with the Securities and Exchange Commission, including the Risk Factors section of Starbucks Annual Report on Form 10-K for the fiscal year ended September 30, 2018. We assume no obligation to update any of these forward-looking statements.
STARBUCKS CORPORATION | 2018 PROXY STATEMENT / i |
This summary highlights information contained elsewhere in this proxy statement. It does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.
Wednesday, March 20, 2019 at 10:00 a.m. (Pacific Time) Doors open at 8:00 a.m. (Pacific Time) |
WAMU Theater next to CenturyLink Field 800 Occidental Avenue South Seattle, WA 98134 |
Voting: |
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Shareholders as of the record date, January 10, 2019, are entitled to vote. | ||
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Your broker will not be able to vote your shares with respect to any of the matters presented at the meeting, other than the ratification of the selection of our independent registered public accounting firm, unless you give your broker specific voting instructions.
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Attending the Annual Meeting: |
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In Person. To be admitted, you will be required to present a government-issued photo identification (such as a drivers license or passport) and proof of share ownership. More information can be found on the back cover of this proxy statement.
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| Via Webcast. Shareholders may view and listen to a live webcast of the meeting. The webcast will start at 10:00 a.m. (Pacific Time). See our Investor Relations website at http://investor.starbucks.com.
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| You do not need to attend the Annual Meeting of Shareholders to vote if you submitted your proxy in advance of the meeting.
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Even if you plan to attend our Annual Meeting in person, please cast your vote as soon as possible. Make sure to have your proxy card or voting instruction form (VIF) in hand:
ANNUAL MEETING AGENDA AND VOTING RECOMMENDATIONS
Proposal |
Board Voting Recommendation |
Page Reference (for more detail) |
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Management proposals
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Election of 10 directors
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FOR EACH
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9
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Approval of an advisory resolution on our executive officer compensation
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FOR
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25
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Ratification of selection of
Deloitte & Touche LLP as our independent registered
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FOR
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53
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Shareholder proposals
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True Diversity Board Policy
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AGAINST
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55
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Report on Sustainable Packaging
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AGAINST
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57
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STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 1 |
PROXY STATEMENT SUMMARY
The following tables provide summary information about our director nominees. Directors are elected annually by a majority of votes cast. Your board of directors recommends that you vote FOR the election of each of the ten nominees.
COMMITTEE MEMBERSHIPS
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NAME
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AGE
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DIRECTOR SINCE
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PRINCIPAL OCCUPATION
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INDEPENDENT
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ACC
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CMDC
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NCGC
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Rosalind G. Brewer
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56
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2017
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group president, Americas and chief operating officer of Starbucks Corporation |
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Mary N. Dillon
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57
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2016
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chief executive officer and director of Ulta Beauty, Inc. |
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C
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Mellody Hobson
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49
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2005
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president and director of Ariel Investments, LLC |
VC
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C
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Kevin R. Johnson
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58
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2009
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president and chief executive officer of Starbucks Corporation |
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Jørgen Vig Knudstorp
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50
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2017
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executive chairman of LEGO Brand Group |
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C
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Satya Nadella
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51
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2017
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chief executive officer and director of Microsoft Corporation |
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Joshua Cooper Ramo
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50
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2011
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co-chief executive officer and vice chairman of Kissinger Associates, Inc. |
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Clara Shih
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37
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2011
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chief executive officer and director of Hearsay Systems, Inc. |
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Javier G. Teruel
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68
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2005
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retired vice chairman of Colgate-Palmolive Company |
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Myron E. Ullman, III
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72
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2003
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retired executive chairman and ceo of J.C. Penney Company, Inc.
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CB
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2 / 2019 PROXY STATEMENT |
PROXY STATEMENT SUMMARY
EXECUTIVE COMPENSATION ADVISORY VOTE
Our board of directors recommends that shareholders vote to approve an advisory resolution on the compensation paid to the Companys named executive officers, as described in this proxy statement, for the following reasons.
Pay Delivery Aligned with Performance
Based on effective program design and best practices, consistent with our pay for performance philosophy, our executive compensation is aligned with Company performance. The vast majority of compensation value we deliver to our executives is in the form of compensation that is variable and at-risk based on performance.
Starbucks has a demonstrated history of rigorous goal setting. The chart below illustrates that realizable compensation of our chief executive officer (ceo) is aligned with shareholder value creation and our performance against rigorous financial goals in fiscal 2018. Realizable compensation delivered in fiscal 2018 differs greatly from our ceos target compensation because: annual incentive bonuses were earned at 32%, stock options granted during the year had exercise prices near our share price at fiscal year-end and performance-based restricted stock units (PRSUs) granted during the year are expected be earned at 0%:
CEO Fiscal 2018 Target vs Realizable Compensation
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STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 3 |
PROXY STATEMENT SUMMARY
With more than 29,000 stores around the globe, Starbucks is the premier roaster and retailer of specialty coffee in the world. Since 1971, we have been committed to ethically sourcing and roasting high-quality arabica coffee. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup.
Starbucks reported solid top line growth in fiscal 2018, as we fundamentally streamlined our
business to focus on our most important strategic priorities.
Fiscal 2018 was a year of transition for our business and leadership team as we realigned our strategies to drive growth at scale. While we achieved record revenues, we fell short of our expectations for the year. To accelerate growth and create long-term shareholder value, we took several actions throughout the year to streamline our business to enhance focus on our core value drivers (encompassed by the three strategic priorities summarized below).
We are committed to amplifying our brand through the Global Coffee Alliance and a targeted set of growth initiatives in the U.S. and China:
ENHANCING THE IN-STORE STARBUCKS EXPERIENCE
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DELIVERING BEVERAGE QUALITY AND INNOVATION
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DRIVING DIGITAL RELATIONSHIPS
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4 / 2019 PROXY STATEMENT |
PROXY STATEMENT SUMMARY
Leadership Transition
In fiscal 2018, Howard Schultz retired from his executive position and our board and was honored with the distinction of chairman emeritus. Mr. Johnson continues as ceo, reporting to a board led by Starbucks independent board chair, Myron E. (Mike) Ullman, III, with support from Mellody Hobson, board vice chair. This transition from founder-led to founder-inspired is a significant milestone both for executive leadership and for the functioning of our board. We have also solidified the executive leadership team reporting to our ceo with the appointment of new leaders in our top operations, finance and legal positions. During fiscal 2018 we completed many significant initiatives to realign our strategic focus, which allowed Starbucks to demonstrate an improved trajectory by year-end. We believe this is evidence of the successful transition of executive leadership, resulting from our boards focus on succession planning.
Fiscal 2018 Achievements
INCREASED NET REVENUES 10% TO A RECORD $24.7B
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GREW NON-GAAP EPS 17% TO $2.42*
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RETURNED NEARLY $9B TO SHAREHOLDERS
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GREW U.S. ACTIVE DIGITAL STARBUCKS REWARDS MEMBERS TO 15.3M UP 15% YEAR OVER YEAR
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FORMED THE ALLIANCE WITH NESTLÉ ahead OF SCHEDULE
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* | Annex A includes a reconciliation of Non-GAAP EPS to diluted net earnings per share (EPS), the most directly comparable measure reported under accounting principles generally accepted in the United States (GAAP). |
Our record fourth quarter performance reflected meaningful sequential improvement in virtually
every critical operating metric, and we entered fiscal 2019 executing against a clear growth agenda,
with a focus on our long-term growth markets of the U.S. and China.
Long-Term Performance
Streamline initiatives released $8 billion of capital for redeployment, which supports our fiscal 2018 commitment to return $25 billion to shareholders through fiscal 2020. Our record of delivering total shareholder return (TSR) and returning capital to shareholders reflects our commitment to long-term shareholder value creation.
Cumulative TSR as of 9/30/18 |
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Starbucks has returned a total of $15.5 billion in capital to shareholders in the last three years. |
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STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 5 |
GLOBAL SOCIAL IMPACT HIGHLIGHTS
What is the Role and Responsibility of a For-Profit, Public Company?
We believe Starbucks canand shouldhave a positive impact on the communities we serve: one person, one cup and one neighborhood at a time. As we have grown to more than 29,000 stores in more than 78 international markets, so too has our ability to lead and create global social impact. It is our vision that together we will elevate our partners, customers, suppliers and neighbors to create positive change. Doing good is so much a part of who we are as people, a company and a brand that our mission and values are ingrained in our business strategy.
Be Globally Responsible
Helping people thrive supports the long-term sustainability and availability of the premium products we provide. Whether its arabica coffee, tea, cocoa or manufactured goods, were committed to offering ethically sourced and responsibly produced sustainable high-quality products.
Here are a few examples of how we try to bring to life our goal of being globally responsible:
We continue to work towards making coffee the worlds first sustainable agricultural product to improve the lives of at least 1 million people in coffee communities around the world
Since 2015, 99% of our coffee has been ethically sourced ¡ we are committed to our goal of reaching 100% ethically sourced coffee, not just in our supply chain, but working with others to make coffee the worlds first sustainable agricultural product
Thanks to our partners and customers, more than 25 million disease-resistant trees have been donated to coffee farmers ¡ we aim to provide 100 million rust-resistant coffee trees to farmers by 2025
Our Global Agronomy Center at Hacienda Alsacia in Costa Rica and nine Farmer Support Centers in coffee growing regions across the globe provide open-sourced training to farmers around the world
We are investing $50 million in the Starbucks Global Farmer Fund to provide farmer loans to strengthen farms through coffee tree renovation and infrastructure |
We are committed to minimizing our environmental footprint and inspiring others to do the same
We expect to build and operate 10,000 Greener Stores by 2025:
¡ Powered by renewable energy
¡ Deploying technologies that deliver 25-30% energy and water savings
¡ Operated by partners (employees) who are certified sustainability experts
We are working across our industry to develop an open-sourced solution to provide a more recyclable cup (through the Next Gen Cup Challenge)
We are committed to eliminating the use of plastic straws from our products, globally, by 2020 |
Create Opportunities
Starbucks has and continues to look to create opportunities for our partners and customers in the communities we serve. From the neighborhoods where our stores are located to those where our coffee is grown, we are committed to creating and investing in opportunities for people around the world.
| Starbucks College Achievement Plan is helping partners complete their education through Arizona State University onlinewe aim to have 25,000 partners graduate by 2025 |
| Since 2013, we have hired more than 21,000 veterans and military spouseswe expect to hire 25,000 by 2025 |
| We expect to employ 10,000 refugees globally by 2022 |
| We have hired over 65,000 Opportunity Youth (young people who are not working or in school)we strive to employ 100,000 by 2020 |
Strengthen Communities
Each Starbucks store is a part of a community, and were committed to strengthening neighborhoods wherever we do business.
We are committed to helping end hunger by DONATING 100% of food available for donation in our U.S. company-owned stores by 2020
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By 2020, we aim to have 100% OF OUR STORES worldwide participating in community service annually |
For more information, please visit www.starbucks.com/responsibility
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 7 |
We are making this proxy statement available to you on January 25, 2019 in connection with the solicitation of proxies by our board of directors for the Starbucks Corporation 2019 Annual Meeting of Shareholders. At Starbucks and in this proxy statement, we refer to our employees as partners. Also in this proxy statement, we sometimes refer to Starbucks as the Company, we or us, and to the 2019 Annual Meeting of Shareholders as the Annual Meeting. When we refer to the Companys fiscal year, we mean the annual period ending on the Sunday closest to September 30 of the stated year. Information in this proxy statement for 2018 generally refers to our 2018 fiscal year, which was from October 2, 2017 through September 30, 2018 (fiscal 2018). Fiscal years 2018 and 2017 each included 52 weeks. Fiscal 2016 included 53 weeks with the additional week falling in our fourth fiscal quarter.
Even if you plan to attend our Annual Meeting in person, please cast your vote as soon as possible. Make sure to have your proxy card or voting instruction form (VIF) in hand:
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8 / 2019 PROXY STATEMENT |
PROPOSAL 1 ELECTION OF DIRECTORS
The table below summarizes the key experience, qualifications and attributes for each director nominee and highlights the balanced mix of experience, qualifications and attributes of the board as a whole. This high-level summary is not intended to be an exhaustive list of each director nominees skills or contributions to the board.
INDUSTRY EXPERIENCE |
FINANCIAL/ CAPITAL |
GENDER, ETHNIC OR NATIONAL DIVERSITY |
BRAND MARKETING EXPERIENCE |
INTERNATIONAL OPERATIONS & DISTRIBUTION EXPERIENCE |
DOMESTIC AND INTERNATIONAL SUSTAINABILITY & PUBLIC POLICY EXPERIENCE |
TECHNOLOGY EXPERIENCE |
HUMAN CAPITAL MANAGEMENT EXPERIENCE |
PUBLIC COMPANY BOARD EXPERIENCE |
SENIOR LEADERSHIP EXPERIENCE | |||||||||||
Rosalind G. Brewer |
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Mary N. Dillon |
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Mellody Hobson |
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Kevin R. Johnson |
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Jørgen Vig Knudstorp |
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Satya Nadella |
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Joshua Cooper Ramo |
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Clara Shih |
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Javier G. Teruel |
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Myron E. Ullman, III |
The board of directors recommends that shareholders vote FOR the election of each of the nominees to the board of directors.
10 / 2019 PROXY STATEMENT |
PROPOSAL 1 ELECTION OF DIRECTORS
12 / 2019 PROXY STATEMENT |
PROPOSAL 1 ELECTION OF DIRECTORS
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 13 |
PROPOSAL 1 ELECTION OF DIRECTORS
14 / 2019 PROXY STATEMENT |
We have a long-standing history of actively engaging with our shareholders.
We believe that strong corporate governance should include year-round engagement with our shareholders. We have a long-standing, robust shareholder outreach program led by a cross-functional team including partners from our Investor Relations, Global Rewards, Law & Corporate Affairs and Global Social Impact departments. Through this outreach, we solicit feedback on our executive compensation program, corporate governance, disclosure practices and environmental and social impact programs and goals. We share feedback we receive with our board of directors and the Compensation Committee as demonstrated below.
As part of our regular outreach, during 2018 we reached out to our top shareholders and had conversations with corporate governance contacts of shareholders representing approximately 30% of our total shares outstanding. Additionally, our senior management team, including our ceo and chief financial officer (cfo), regularly engage in meaningful dialogue with our shareholders through our quarterly earnings calls and other channels of communication.
In recent years, shareholder feedback has influenced our implementation of proxy access and the specific terms adopted, disclosure regarding partner diversity, as well as certain of our compensation design and philosophy changes, including most recently lengthening the performance period for PRSUs from two years to three years and including relative TSR in the PRSU design (as discussed in the Compensation Discussion and Analysis section of this proxy statement). In prior years, shareholder feedback influenced our replacing EPS with adjusted net revenue as a performance measure for annual incentive bonuses and lengthening the performance period for PRSUs from one year to two years.
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 15 |
CORPORATE GOVERNANCE
16 / 2019 PROXY STATEMENT |
CORPORATE GOVERNANCE
The current composition of each board committee and the number of meetings held by each during fiscal 2018 are set forth below.
Director |
Audit and Compliance Committee (ACC) |
Compensation and Management Development Committee (CMDC) |
Nominating and Corporate Governance Committee (NCGC) |
Board of Directors | ||||||||||||||||
Rosalind G. Brewer
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Mary N. Dillon
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C
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Mellody Hobson
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C
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VC
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Kevin R. Johnson
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Jørgen Vig Knudstorp
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C
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Satya Nadella
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Joshua Cooper Ramo
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Clara Shih
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Javier G. Teruel
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Myron E. Ullman, III
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CB
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Fiscal 2018 Meetings
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9
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7
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4
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9
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C |
Committee Chair |
CB |
Chair of Board |
VC |
Vice Chair of Board |
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Member |
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 17 |
CORPORATE GOVERNANCE
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS, ANNUAL MEETING
During fiscal 2018, each director attended at least 75% of all meetings of the board and board committees on which he or she served (held during the period that such director served). Our Corporate Governance Principles and Practices require each board member to attend our annual meeting of shareholders except for absences due to causes beyond the reasonable control of the director. 10 of the 12 directors who then served on the board attended our 2018 Annual Meeting of Shareholders.
AUDIT AND COMPLIANCE COMMITTEE
Committee Members* Mellody Hobson ◆ (Chair) Robert M. Gates Jørgen Vig Knudstorp Joshua Cooper Ramo Javier G. Teruel ◆ Craig E. Weatherup◆
Number of meetings in |
The Audit Committee annually reviews and reassesses the adequacy of its charter and recommends any proposed changes to the charter to the board for approval. As more fully described in its charter, the primary responsibilities of the Audit Committee are to:
oversee our accounting and financial reporting processes, including the review of the Companys quarterly and annual financial results; appoint the Companys independent registered public accounting firm and oversee the relationship, including monitoring the auditors independence and reviewing the scope of the auditors work, including pre-approval of audit and non-audit services; review the annual audit and quarterly review processes with management and the independent registered public accounting firm; review managements assessment of the effectiveness of the Companys internal controls over financial reporting and the independent registered public accounting firms related attestation; oversee the Companys internal audit function, including review of internal audit staffing and review of the internal audit plan; discuss any material weakness or significant deficiency and any steps taken to resolve the issue; review any significant findings and recommendations from internal audit; review and approve or ratify all transactions with related persons and potential conflicts of interests that are required to be disclosed in the proxy statement; and review periodically and discuss with management the Companys major and emerging risk exposures, including financial, operational, privacy, data security, food safety and legal and regulatory risks, the steps the Company has taken to monitor and control such exposures, and the Companys risk assessment and risk management policies; and regularly report to the board the substance of such reviews and discussions.
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◆Audit Committee Financial Expert |
*Each of Ms. Hobson and Messrs. Gates, Knudstorp, Ramo, Teruel and Weatherup served on the Audit Committee during fiscal 2018. Secretary Gates ceased membership on the Committee upon his retirement from the board in March 2018, and Mr. Weatherup ceased membership on the Committee upon his retirement from the board in June 2018. Currently, each of Ms. Hobson, and Messrs. Knudstorp, Ramo and Teruel: (i) meets the independence criteria prescribed by applicable law and the rules of the SEC for audit committee membership and is an independent director as defined by NASDAQ rules; and (ii) meets NASDAQs financial knowledge and sophistication requirements. Each of Ms. Hobson and Mr. Teruel have been determined by the board of directors to be an audit committee financial expert under SEC rules. The Audit and Compliance Committee Report describes in more detail the Audit Committees responsibilities with regard to our financial statements and its interactions with our independent auditor, Deloitte & Touche LLP. |
18 / 2019 PROXY STATEMENT |
CORPORATE GOVERNANCE
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
Committee Members* Mary N. Dillon (Chair) Satya Nadella Clara Shih Javier G. Teruel Myron E. Ullman, III
Number of meetings in |
The Compensation Committee annually reviews and reassesses the adequacy of its charter and recommends any proposed changes to the charter to the board for approval. As more fully described in its charter, the primary responsibilities of the Compensation Committee are to:
conduct an annual review of and recommend to the independent directors of the board for their review and approval the compensation package for the ceo; conduct an annual review and approve the compensation package for the Companys executive officers and senior officers (as defined in its charter); annually review and approve objective performance measures and performance targets for all executive officers and senior officers participating in the annual incentive bonus plan and long-term incentive plans, and certify achievement of performance measures after the measurement period; approve, modify and administer partner-based equity plans, the Executive Management Bonus Plan and deferred compensation plans; after consulting with the independent directors, together with the chair of the Nominating/Governance Committee, the chair of the Compensation Committee annually reviews the performance of our ceo and meets with him to share the findings of the review; annually review and approve our management development and succession planning practices and strategies, including the review and oversight of risks and exposures associated with the succession planning practices and strategies; annually review and approve the Companys peer group companies and review market data; provide recommendations to the board of directors on compensation-related proposals to be considered at the Companys annual meeting, including say-on-pay and any related shareholder feedback; determine management stock ownership guidelines and periodically review ownership levels for compliance; and annually review a report regarding potential material risks, if any, created by the Companys compensation policies and practices and inform the board of any necessary actions.
The charter allows the Compensation Committee to form and delegate any or all of its responsibilities to a subcommittee or subcommittees of the Compensation Committee, as may be necessary or appropriate, and within certain limits.
| |
*Messrs. Nadella, Teruel, Ullman, and Mses. Dillon and Shih served on the Compensation Committee during fiscal 2018. Mr. Ullman ceased membership on the Compensation Committee upon selection as independent board chair in June 2018. At least annually, the Compensation Committee reviews and approves our executive compensation strategy and principles to confirm that they are aligned with our business strategy and objectives, shareholder interests, desired behaviors and corporate culture. |
Compensation Committee Interlocks and Insider Participation
Messrs. Nadella, Teruel, Ullman and Mses. Dillon, and Shih served on the Compensation Committee during fiscal 2018. As stated above, Mr. Ullman ceased membership on the Compensation Committee upon selection as independent board chair. During fiscal 2018, none of our executive officers served on the Compensation Committee (or its equivalent) or on the board of directors of another entity where one of our Compensation Committee members was an executive officer.
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 19 |
CORPORATE GOVERNANCE
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
Committee Members* Jørgen Vig Knudstorp (Chair) William W. Bradley Mary N. Dillon Robert M. Gates Joshua Cooper Ramo Clara Shih Myron E. Ullman, III Craig E. Weatherup
Number of meetings in |
The Nominating/Governance Committee annually reviews and reassesses the adequacy of its charter and recommends any proposed changes to the charter to the board for approval. As more fully described in its charter, the primary responsibilities of the Nominating/Governance Committee are to:
recommend to the board on a biennial basis a director for election by the board as chair of the board and, if one or more vice chairs are to be elected by the board, recommend to the board directors to serve as vice chairs; make recommendations to the board about our corporate governance processes; assist in identifying and screening board candidates; administer the Director Nominations Policy; consider shareholder nominations to the board; make recommendations to the board regarding membership and chairs of the boards committees; oversee the annual evaluation of the effectiveness of the board and each of its committees; biennially recommend the boards lead independent director, if the chair of the board is not an independent director; annually review the type and amount of board compensation for independent directors; annually review the Companys corporate political contributions and expenditures to confirm alignment with Company policies and values; and annually review and assess the effectiveness of the Companys environmental and social responsibility policies, goals and programs through the annual Global Social Impact Performance Report, and makes recommendations as deemed appropriate based on such review and assessment.
| |
The Nominating/Governance Committee also annually assists the board of directors with its affirmative independence and expertise determinations. After consulting with the independent directors of the board, the chair of the Nominating/Governance Committee and the chair of the Compensation Committee annually review the performance of the ceo and meets with him to share the findings of the review.
*Messrs. Bradley, Gates, Knudstorp, Ramo, Ullman and Weatherup and Mses. Dillon and Shih served on the Nominating/Governance Committee during fiscal 2018. Senator Bradley and Secretary Gates ceased membership on the Nominating/Governance Committee upon their retirement from the board in March 2018. Mr. Weatherup ceased membership on the Nominating/Governance Committee upon his retirement from the board in June 2018. |
20 / 2019 PROXY STATEMENT |
CORPORATE GOVERNANCE
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 21 |
CORPORATE GOVERNANCE
22 / 2019 PROXY STATEMENT |
COMPENSATION OF DIRECTORS
Mr. Johnson and Ms. Brewer do not participate in the compensation program for non-employee directors, but rather are compensated as executive officers. Mr. Schultz was also compensated as an executive officer for the portion of the year he was executive chairman prior to his retirement. Mr. Schultz ceased being a board member and an officer of the Company upon his retirement and does not receive any compensation as chair emeritus. Information on compensation paid to Mr. Schultz, Mr. Johnson and Ms. Brewer in fiscal 2018 is described in the Compensation Discussion and Analysis section of the proxy statement.
FISCAL 2018 NON-EMPLOYEE DIRECTOR COMPENSATION
The following table shows fiscal 2018 compensation for non-employee directors.
Name |
Fees ($) |
Stock Awards ($)(1)(2) |
Option Awards ($)(3)(4) |
Total ($) |
||||||||||||
William W. Bradley(5)
|
|
|
|
|
254,520
|
|
|
|
|
|
254,520
|
| ||||
Mary N. Dillon
|
|
|
|
|
254,520
|
|
|
|
|
|
254,520
|
| ||||
Robert M. Gates(5)
|
|
|
|
|
254,520
|
|
|
|
|
|
254,520
|
| ||||
Mellody Hobson
|
|
|
|
|
254,520
|
|
|
|
|
|
254,520
|
| ||||
Jørgen Vig Knudstorp
|
|
|
|
|
|
|
|
149,122
|
|
|
149,122
|
| ||||
Satya Nadella
|
|
|
|
|
127,232
|
|
|
74,545
|
|
|
201,777
|
| ||||
Joshua Cooper Ramo
|
|
130,000
|
|
|
127,232
|
|
|
|
|
|
257,232
|
| ||||
Clara Shih
|
|
130,000
|
|
|
|
|
|
74,545
|
|
|
204,545
|
| ||||
Javier G. Teruel
|
|
|
|
|
|
|
|
149,122
|
|
|
149,122
|
| ||||
Myron E. Ullman, III
|
|
|
|
|
|
|
|
149,122
|
|
|
149,122
|
| ||||
Craig E. Weatherup(6)
|
|
|
|
|
|
|
|
149,122
|
|
|
149,122
|
|
(1) | The amounts shown in this column represent the grant date fair values of the RSU awards granted to each of the non-employee directors on November 15, 2017. The grant date fair values have been determined based on the assumptions and methodologies set forth in the Companys fiscal 2018 Annual Report on Form 10-K (Note 12: Employee Stock and Benefit Plans). |
(2) | As of September 30, 2018, the aggregate number of shares of Starbucks common stock underlying outstanding unvested RSU awards for each non-employee director were: Sen. Bradley0; Ms. Dillon4,585; Sec. Gates0; Ms. Hobson4,585; Mr. Knudstorp0; Mr. Nadella2,292; Mr. Ramo2,292; Ms. Shih0; Mr. Teruel0; Mr. Ullman0; and Mr. Weatherup0. |
(3) | The amounts shown in this column represent the grant date fair values of the stock option awards granted to each of the non-employee directors on November 15, 2017. The grant date fair values have been determined based on the assumptions and methodologies set forth in the Companys fiscal 2018 Annual Report on Form 10-K (Note 12: Employee Stock and Benefit Plans). |
(4) | As of September 30, 2018, the aggregate number of shares of Starbucks common stock underlying outstanding option awards for each non-employee director were: Sen. Bradley6,426; Ms. Dillon3,480; Sec. Gates0; Ms. Hobson106,616; Mr. Knudstorp20,661; Mr. Nadella6,876; Mr. Ramo0; Ms. Shih19,998; Mr. Teruel165,623; Mr. Ullman245,345; and Mr. Weatherup138,729. |
(5) | Mr. Bradley and Mr. Gates retired from the board effective March 21, 2018, pursuant to the board mandatory retirement age requirements. |
(6) | Mr. Weatherup retired from the board effective June 1, 2018. |
Deferred Compensation Plan
Under the Deferred Compensation Plan for Non-Employee Directors, a non-employee director may irrevocably elect to defer receipt of shares of common stock the director would have received upon vesting of RSUs until (1) the earlier of three years from the vesting of the RSU and separation from the board or (2) separation from the board. The purpose of the plan is to enhance the Companys ability to attract and retain non-employee directors by providing individual financial and tax planning flexibility.
Director Stock Ownership Guidelines
In June 2018, the board of directors increased the minimum Company stock ownership guidelines for non-employee directors from $480,000 to five (5) times the maximum portion of annual compensation that can be paid in cash, not including cash payable as additional retainer for serving as chair or vice chair of the board or for serving as a committee chair. The guidelines serve to align the interests of our non-employee directors to those of our shareholders. Under this formula, the current holding requirement is $650,000 (5 x $130,000) of Company stock. Current directors will have five years to meet this new requirement and new directors will have five years from when they first join the board.
Deferred stock units resulting from deferrals under the deferred compensation plan for directors described above count toward meeting the guidelines. Each director is expected to continue to meet the ownership requirement for as long as he or she serves as a non-employee director of the board. Except for Mr. Nadella, who joined the board in March 2017 and has additional time to meet the requirement, all current non-employee directors have met these guidelines as of the date of this proxy statement.
24 / 2019 PROXY STATEMENT |
Compensation Discussion and Analysis
This Compensation Discussion and Analysis provides information on our executive compensation program and the amounts shown in the executive compensation tables that follow. NEOs refers to the Named Executive Officers, who are the following six executive officers named in the compensation tables of this proxy statement. Compensation Committee or Committee refers to the Compensation and Management Development Committee of the board of directors. We refer to all of our employees as partners, due to the significant role that they all play in the success of the Company.
Named Executive Officers (NEOs)
Fiscal 2018 was a year of transition for our business and our leadership team as we realigned our strategies to drive growth at scale. While we achieved record revenues, overall financial performance for fiscal 2018, following years of outstanding growth, fell below our rigorous internal goals. As a result, consistent with our pay for performance philosophy and compensation program design, realizable pay of our NEOs for fiscal 2018 was well below target levels. Responding to the dynamic environment, as well as feedback from our shareholders, the Committee actively engaged in the review and adaptation of our incentive compensation program following the close of fiscal 2018 to fit the program to the current needs of the Company. In this executive summary we review business performance and its alignment with fiscal 2018 executive compensation and summarize the actions that the Committee took following fiscal 2018 to drive our growth-at-scale agenda.
Fiscal 2018 Financial Highlights
The Company delivered solid results in fiscal 2018, increasing consolidated net revenue by 10% and Non-GAAP* EPS by 17% to $2.42 per share. During the year, Starbucks made significant investments to support the growth of our business, adding 1,985 net new stores to end fiscal 2018 with more than 29,000 stores globally. We also returned nearly $9 billion to shareholders in fiscal 2018 through a combination of dividends and share repurchases.
Starbucks reported solid top line growth in fiscal 2018, as we fundamentally streamlined our business
to focus on our most important strategic priorities.
+10% | +17%* | $8.9 billion | ||
Revenues | Non-GAAP EPS |
Capital Returned to Shareholders |
* | Annex A includes a reconciliation of Non-GAAP EPS to diluted net earnings per share, the most directly comparable GAAP measure. |
Total Shareholder Return
Starbucks cumulative TSR for the ten years ending September 30, 2018 was an impressive 770%, despite more modest returns towards the end of that period as we fell off the pace of our long-term growth targets. As discussed below, solidifying our growth-at-scale agenda was a major theme of fiscal 2018. Though we are in the early stages of implementation, we are beginning to see traction with strong relative TSR performance since the end of the fiscal year, as shown in the following graph.
26 / 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
TSR* Comparison Graph
|
* | $100 invested on 9/29/13, including reinvestment of dividends, through 12/31/18. Calculated on the same basis as the performance comparison graph in our 2018 Annual Report on Form 10-K. |
Executive Compensation Objectives and Program Design
Our success is based on having the right leaders to guide Starbucks and successfully execute our strategy, so it is critical to attract and retain the highest level of executive talent. Further, our executive compensation program is structured to closely align with our business purpose and commitment to shareholder value creation: focusing on long-term sustainable growth and increasing shareholder returns while staying true to our core principles. We believe our compensation structure and its realizable pay results for executives demonstrates our strong commitment to linking compensation to Company performance and strategy.
The vast majority of compensation value we deliver to our executives is in the form of compensation that is variable and at-risk based on performance. The at-risk elements of our fiscal 2018 program include our cash annual incentive bonus and the stock options and performance-based restricted stock units (PRSUs) that were granted as long-term incentives. Our executive compensation program for fiscal 2018 remained consistent with our fiscal 2017 program, with only a minor change to the weighting of performance measures in our annual incentive bonus plan.
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 27 |
EXECUTIVE COMPENSATION
Pay Delivery and Performance Alignment
The charts below illustrate that our ceos realizable compensation is aligned with shareholder value creation and our performance against rigorous financial goals during our last two fiscal years. For each of the two years shown, the realizable value of Mr. Johnsons compensation package as of September 30, 2018 is significantly less than the target value awarded due to (i) a common stock price that was only slightly above the exercise prices of stock options and (ii) EPS performance below PRSU payout thresholds. The values he may ultimately realize from his stock options will match or exceed targets only when Starbucks common stock price increases.
CEO Target vs Realizable Compensation
|
(1) | Target Value at Award Date reflects: (i) annual base salary rate, (ii) target annual incentive bonus opportunity and (iii) grant date value of long-term equity awards (40% stock options and 60% PRSUs). |
(2) | Realizable Value at September 30, 2018 reflects: (i) paid base salary during the fiscal year, (ii) the actual annual incentive bonus earned for that year and (iii) the actual prevailing value of long-term equity at September 30, 2018. For stock options: reflects exercise prices of $56.10 (fiscal 2017) and $56.70 (fiscal 2018) relative to Starbucks closing common stock price at September 28, 2018 (the last trading day of fiscal 2018) of $56.84. PRSUs reflect 0% payout percentage based on failure to meet two-year EPS performance goal of 2017 PRSUs and the expectation that 2018 PRSUs will not be earned based on EPS performance tracking as of September 30, 2018. |
28 / 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
Growth-at-Scale Agenda
True to our values.
Following leadership transition, we move forward with the renewed focus of the executive team led by ceo Kevin Johnson. Our mission and values, which are ingrained in our business strategy, are unchanged. Please see page 7 for an update on Starbucks global social impact agenda.
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 29 |
EXECUTIVE COMPENSATION
30 / 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
Compensation Policy Highlights
The remainder of this Compensation Discussion and Analysis details our fiscal 2018 executive compensation program for NEOs.
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 31 |
EXECUTIVE COMPENSATION
ELEMENTS OF FISCAL 2018 EXECUTIVE COMPENSATION
The following table provides information regarding the elements of our fiscal 2018 executive compensation program.
Element |
Form | Objectives and Basis | ||
Base Salary
|
Cash
|
Attract and retain highly qualified executives to drive our success
| ||
Annual Incentive Bonus |
Cash |
Drive Company performance
Target bonus amount set as a percentage of base salary
Actual payout based on financial performance against pre-established net revenue and operating income targets and Committee discretion
| ||
Long-Term Incentive |
PRSUs and stock options |
Drive Company performance; align interests of executives with those of shareholders; retain executives through long-term vesting; and provide potential wealth accumulation
Delivered 60% in PRSUs and 40% in stock options
PRSUs are earned based on two-year EPS performance against pre-established targets, subject to downward adjustment based on ROIC; vesting is 50% after two years and 50% after three years; options have ten-year terms and vest ratably over four years
| ||
Perquisites and Other Executive Benefits
|
Limited (See Other CompensationPerquisites and Other Executive Benefits)
|
Provide for the safety and wellness of our executives and other purposes as discussed below
| ||
Deferred Compensation |
401(k) plan and non-qualified Management Deferred Compensation Plan
|
Provide methods for general savings including for retirement
| ||
General Benefits |
Health and welfare plans, stock purchase plan and other broad-based partner benefits
|
Offer competitive benefits package that generally includes benefits offered to all partners
|
32 / 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
Starbucks Fiscal 2018 Executive Compensation Peer Group Companies
Consumer Staples |
Consumer Discretionary | IT-Software and Services | ||
Coca-Cola Company
|
Estee Lauder Companies
|
PayPal Holdings, Inc.
| ||
Colgate-Palmolive Co.
|
Home Depot
|
Visa Inc.
| ||
General Mills, Inc.
|
L Brands, Inc.
|
|||
Kellogg Company
|
McDonalds Corp.
|
|||
Kraft Heinz Company
|
Marriott International
|
|||
PepsiCo. Inc.
|
NIKE, Inc.
|
|||
Procter & Gamble Co.
|
Target Corp.
|
|||
V.F. Corporation
|
||||
Yum! Brands, Inc.
|
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 33 |
EXECUTIVE COMPENSATION
Dollar amounts below, except per share data, are in millions.
(1) | Our fiscal year ends on the Sunday closest to September 30. Fiscal years 2018 and 2017 each included 52 weeks. Fiscal year 2016 included 53 weeks with the additional week falling in our fourth fiscal quarter. The objective performance goals under our annual incentive bonus plan for fiscal 2016 were set on a comparable 52-week fiscal year. The impact of the 53rd week was excluded from our fiscal 2016 EPS results for purposes of our PRSUs. |
(2) | The fiscal 2018 adjusted net revenue result excludes the impact of foreign currency fluctuations, ownership changes related to E. China, Singapore, Taiwan, Tazo and Brazil, the Nestlé transaction and other items. The fiscal 2017 adjusted net revenue result excludes the impact of foreign currency fluctuations and ownership changes in Singapore. The fiscal 2016 adjusted net revenue result excludes the impact of foreign currency fluctuations and the sale of our German market retail operations. |
(3) | The fiscal 2018 adjusted operating income result excludes the impact of foreign currency fluctuations, restructuring, impairment and optimization costs, ownership changes related to E. China, Singapore, Taiwan, Tazo, Brazil and Japan, the net impact of U.S. tax reform and other items. The fiscal 2017 adjusted operating income result excludes the impact of foreign currency fluctuations, ownership changes in Japan and Singapore, Greater China transaction costs, restructuring and impairment charges associated with our restructuring efforts, a donation to The Starbucks Foundation and other items. The fiscal 2016 adjusted operating income result excludes the impact of foreign currency fluctuations, mark to market adjustments of our Management Deferred Compensation Plan liability, an accrual for a multi-year tax audit, the sale of our German market retail operations, the sale of our ownership interest in our Spanish joint venture and an accounting change and costs associated with the Starbucks Japan transaction and integration. |
(4) | ROIC is calculated as adjusted net operating profit after taxes (adjusted for implied interest expense on operating leases), divided by average invested capital. Invested capital is calculated on a five-point average and includes shareholders equity, short- and long-term debt, all other long-term liabilities, and capitalized operating leases, less cash, cash equivalents and short- and long-term investments. The fiscal 2018 ROIC result excludes the impact of certain impairment charges associated with our restructuring efforts, acquisition and integration costs and One-time Partner Investments. The fiscal 2017 ROIC result excludes the impact of certain impairment charges associated with our restructuring efforts. The fiscal 2016 ROIC result excludes the impact of the sale of our German market retail operations and the reclassification of deferred income taxes on our balance sheet associated with the adoption of new accounting guidance. |
34 / 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
(5) | The fiscal 2018 adjusted earnings per share result excludes the impact of foreign currency fluctuations, restructuring, impairment and optimization costs, ownership changes related to E. China, Singapore, Taiwan, Tazo, Brazil and Japan, the net impact of U.S. federal tax reform and other items. The fiscal 2017 adjusted earnings per share result excludes the impact of foreign currency fluctuations, ownership changes in Japan, Germany and Singapore, Greater China transaction costs, restructuring and impairment charges associated with our restructuring efforts, a donation to The Starbucks Foundation, and unbudgeted share repurchases. The fiscal 2016 adjusted earnings per share result excludes the impact of foreign currency fluctuations, incremental benefits from additional manufacturing deductions, the Starbucks Japan transaction and integration, the sale of our German market retail operations, the 53rd week of fiscal 2016 and unbudgeted share repurchases. |
The Compensation Committee generally reviews and approves base salaries annually at its November meeting with new salaries effective in late November or early December and also makes periodic adjustments in connection with promotion or changes in position. For fiscal 2018, the Committee reviewed and approved the base salaries shown below (and with respect to Messrs. Schultz and Johnson, the Committee recommended, and the independent directors approved).
Base Salary (Annualized Rate) |
||||||||||
Named Executive Officer |
Fiscal 2018
|
Fiscal 2017
|
% Change
| |||||||
| ||||||||||
Kevin Johnson |
$ | 1,500,000 | $ | 1,300,000 | (1) | 15% | ||||
Scott Maw |
$ | 800,000 | $ | 800,000 | 0% | |||||
Rosalind Brewer |
$ | 1,000,000 | (2) | | N/A | |||||
Clifford Burrows |
$ | 825,000 | $ | 825,000 | 0% | |||||
John Culver |
$ | 825,000 | $ | 825,000 | 0% | |||||
Howard Schultz |
$ | 1 | $ | 1 | (3) | 0% |
(1) | Mr. Johnson was named president and chief executive officer effective April 3, 2017. In connection with this change in role, Mr. Johnsons annualized salary was increased to $1,300,000 from $1,000,000. |
(2) | Ms. Brewer was named group president and chief operating officer effective October 2, 2017. |
(3) | Mr. Schultz was named executive chairman and ceased serving as chief executive officer effective April 3, 2017. In connection with this change in role, Mr. Schultzs annualized salary was reduced to $1 from $1,500,000. |
Starbucks annual incentive bonuses for NEOs are paid pursuant to our shareholder-approved Executive Management Bonus Plan. The target opportunities as a percentage of base salary for fiscal 2018 for our NEOs are shown below.
Bonus Targets Percentage of Base Salary |
||||||||||
Named Executive Officer |
Fiscal 2018
|
Fiscal 2017
|
% Change
| |||||||
| ||||||||||
Kevin Johnson
|
|
200%
|
|
|
200%
|
|
0%
| |||
Scott Maw
|
|
100%
|
|
|
100%
|
|
0%
| |||
Rosalind Brewer
|
|
150%
|
|
|
N/A
|
|
N/A
| |||
Clifford Burrows
|
|
120%
|
|
|
120%
|
|
0%
| |||
John Culver
|
|
120%
|
|
|
120%
|
|
0%
| |||
Howard Schultz
|
$
|
3,750,000
|
|
|
$3,750,000
|
|
0%
|
The total annual incentive bonus delivered to each NEO (other than Mr. Schultz) for fiscal 2018 was determined based on both the extent to which objective financial performance goals were achieved and discretionary factors considered by the Committee. The possible payouts for each NEO based on achievement of threshold, target and maximum performance levels are disclosed in the Fiscal 2018 Grants of Plan-Based Awards Table. Mr. Schultzs award was determined in connection with his retirement in June 2018.
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 35 |
EXECUTIVE COMPENSATION
Adjusted Net Revenue (1) |
Threshold (Millions US$) |
Target (Millions US$) |
Maximum (Millions US$) |
Adjusted Actual Performance (Millions US$) |
Payout Percentage |
|||||||||||||||
Consolidated
|
|
23,142.1
|
|
|
24,360.1
|
|
|
25,090.9
|
|
|
24,065.8
|
|
|
80%
|
|
(1) | The performance measures under the plan that were approved at the beginning of the performance period provided for certain non-GAAP adjustments so that the performance measures would more consistently reflect underlying business operations than the comparable GAAP measures. The fiscal 2018 consolidated adjusted net revenue result excludes the impact of foreign currency fluctuations, ownership changes related to E. China, Singapore, Taiwan, Tazo and Brazil, the Nestlé transaction and other items. |
Adjusted Operating Income(1) |
Threshold (Millions US$) |
Target (Millions US$) |
Maximum (Millions US$) |
Adjusted Actual Performance (Millions US$) |
Payout Percentage | |||||
Consolidated (All NEOs)
|
4,494.6
|
4,832.9
|
5,267.8
|
4,424.8
|
0%
|
(1) | The performance measures under the plan that were approved at the beginning of the performance period provided for certain non-GAAP adjustments so that the performance measures would more consistently reflect underlying business operations than the comparable GAAP measures. The fiscal 2018 consolidated operating income result excludes the impact of foreign currency fluctuations, restructuring, impairment and optimization costs, ownership changes related to E. China, Singapore, Taiwan, Tazo, Brazil and Japan, the net impact of U.S. tax reform and other items. |
36 / 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
Fiscal 2018 Bonuses Earned
Fiscal 2018 Annual Incentive Bonus Plan
| ||||||||||||
Named Executive Officer |
Payout on Consolidated Adjusted Operating Income (60% Weighting) |
Payout on Consolidated |
Formulaic (%) of |
Individual (%) of |
Bonus Earned | |||||||
(%) of Target | ($) | |||||||||||
Kevin Johnson
|
0%
|
80%
|
32%
|
0%
|
32%
|
$960,000
| ||||||
Scott Maw
|
0%
|
80%
|
32%
|
0%
|
32%
|
$256,000
| ||||||
Rosalind Brewer
|
0%
|
80%
|
32%
|
33%
|
65%
|
$980,000
| ||||||
Clifford Burrows
|
0%
|
80%
|
32%
|
0%
|
32%
|
$316,800
| ||||||
John Culver
|
0%
|
80%
|
32%
|
33%
|
65%
|
$643,500
| ||||||
Howard Schultz
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
$1,875,000(1)
|
(1) | Pursuant to his retirement agreement, Mr. Schultz was paid 50% of this target bonus upon retirement as explained below under Employment Agreements and Termination Arrangements. |
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 37 |
EXECUTIVE COMPENSATION
Value of Annual Long-Term Incentive Compensation Awards
|
Named Executive Officer |
Granted in Fiscal 2018 |
Granted in Fiscal 2017 |
% Change |
|||||||||
Kevin Johnson |
$ | 11,100,000 | $ | 10,300,000 | 8 | % | ||||||
Scott Maw |
$ | 5,000,000 | $ | 5,000,000 | 0 | % | ||||||
Rosalind Brewer(1) |
N/A | N/A | N/ | A | ||||||||
Clifford Burrows |
$ | 4,500,000 | $ | 4,500,000 | 0 | % | ||||||
John Culver |
$ | 4,500,000 | $ | 4,500,000 | 0 | % | ||||||
Howard Schultz |
$ | 14,500,000 | $ | 13,750,000 | 5.5 | % |
(1) | Pursuant to the sign-on agreement entered into by Ms. Brewer and the Company, Ms. Brewer was awarded $7,000,000 in sign-on equity and did not receive an annual grant in fiscal 2018. |
38 / 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 39 |
EXECUTIVE COMPENSATION
40 / 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 41 |
EXECUTIVE COMPENSATION
The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on this review and discussion, the Compensation Committee recommended to the board of directors that the Compensation Discussion and Analysis be included in the Starbucks 2018 Form 10-K and this proxy statement.
Respectfully submitted,
Mary N. Dillon (Chair)
Satya Nadella
Clara Shih
Javier G. Teruel
42 / 2019 PROXY STATEMENT |
The following table sets forth information regarding fiscal year 2018, 2017 and 2016 compensation for our NEOs, except fiscal year 2017 and 2016 information for Ms. Brewer is not provided because she was not an NEO in those years.
Name and Principal Position |
Year | Salary ($) |
Bonus ($)(1) |
Stock Awards ($)(2) |
Option Awards(2) |
Non-Equity Incentive Plan Compensation ($)(3) |
All Other Compensation ($)(4) |
Total ($) |
||||||||||||||||||||||||
Kevin R. Johnson president and chief executive officer |
2018 | 1,461,533 | | 6,659,982 | 4,233,929 | 960,000 | 67,036 | 13,382,480 | ||||||||||||||||||||||||
2017 | 1,154,808 | | 5,914,248 | 3,919,630 | 469,688 | 21,990 | 11,480,364 | |||||||||||||||||||||||||
2016 | 1,000,000 | 500,000 | 4,934,433 | 3,579,055 | 1,020,000 | 24,424 | 11,057,912 | |||||||||||||||||||||||||
Scott Maw executive vice president and chief financial officer (retired November 30, 2018) |
2018 | 800,007 | | 2,999,997 | 1,907,175 | 256,000 | 17,590 | 5,980,769 | ||||||||||||||||||||||||
2017 | 789,423 | | 2,868,709 | 1,907,030 | 180,000 | 16,440 | 5,761,602 | |||||||||||||||||||||||||
2016 | 727,404 | 1,741,585 | 1,263,192 | 637,500 | 15,750 | 4,385,431 | ||||||||||||||||||||||||||
Rosalind G. Brewer group president Americas and chief operating officer |
2018 | 961,540 | 334,000 | 4,050,177 | 2,681,771 | 980,000 | 144,594 | 9,152,082 | ||||||||||||||||||||||||
Clifford Burrows group president Siren Retail |
2018 | 824,993 | | 2,699,997 | 1,716,456 | 316,800 | 22,240 | 5,580,486 | ||||||||||||||||||||||||
2017 | 822,885 | | 2,581,817 | 1,716,322 | 222,750 | 21,990 | 5,365,764 | |||||||||||||||||||||||||
2016 | 811,404 | | 2,031,850 | 1,473,724 | 619,400 | 30,216 | 4,966,594 | |||||||||||||||||||||||||
John Culver group president International, Channel Development and Global Coffee & Tea(5) |
2018 | 824,993 | | 2,699,997 | 1,716,456 | 643,500 | 22,240 | 5,907,186 | ||||||||||||||||||||||||
2017 | 809,135 | | 2,581,817 | 1,716,322 | 237,600 | 21,990 | 5,366,864 | |||||||||||||||||||||||||
2016 | 727,558 | | 2,031,850 | 1,473,724 | 990,000 | 20,992 | 5,244,124 | |||||||||||||||||||||||||
Howard Schultz executive chairman (retired June 26, 2018) |
2018 | 1 | | 11,849,295 | 16,108,324 | 1,875,000 | 348,990 | 30,181,610 | ||||||||||||||||||||||||
2017 | 807,693 | (6) | | 7,893,379 | 8,096,499 | 843,750 | 339,569 | 17,980,890 | ||||||||||||||||||||||||
2016 | 1,500,000 | | 7,546,811 | 9,362,066 | 3,187,500 | 219,121 | 21,815,498 |
(1) | For Ms. Brewer, this includes her sign-on bonus, one-third of which was paid upon commencing employment with the Company as group president and chief operating officer. |
(2) | Represents the aggregate grant date fair value, as computed in accordance with FASB ASC Topic 718. These amounts do not reflect whether the recipient has realized or will realize a financial benefit from the awards (such as by exercising stock options). The grant date fair values have been determined based on the assumptions and methodologies set forth in the Companys Form 10-K (Note 12: Employee Stock and Benefit Plans) for that year. The grant date fair value for PRSUs is reported based upon the probable outcome of the performance conditions (target) on the grant date. The value of the annual PRSU awards granted in fiscal year 2018, except for Ms. Brewer, assuming achievement of the maximum performance level of 200% would have been: Mr. Johnson-$13,319,964; Mr. Maw-$5,999,994; Mr. Burrows-$5,399,994; Mr. Culver-$5,399,994; and Mr. Schultz-$17,399,982. Ms. Brewers stock awards did not include the maximum performance level feature. The assumed expected term of stock options shown in the Companys Form 10-K (Note 12: Employee Stock and Benefit Plans) is a weighted average expected term covering all optionees. However, Mr. Schultzs historical practice of not exercising stock options until very late in their term requires us to apply a unique expected term assumption that exceeds eight years when valuing options granted to him for purposes of GAAP. In addition, in accordance with GAAP, the fair value of a stock option granted to a retirement-eligible partner will be expensed earlier than an identical stock option granted to a partner who is not retirement eligible. During fiscal 2018, Messrs. Burrows and Culver were retirement eligible. Mr. Schultz previously waived the accelerated vesting feature for options granted subsequent to fiscal year 2006. For Mr. Schultz, 2018 option awards include $8,479,035, and 2018 stock awards include $3,149,304, in incremental value arising from the modification of awards pursuant to his retirement agreement. |
(3) | These amounts represent earned annual incentive bonuses. |
(4) | The table below shows the components of All Other Compensation for the NEOs. |
(5) | Effective October 2, 2017, Mr. Culvers title changed from group president, Global Retail to group president, International, Channel Development and Global Coffee. |
(6) | Effective April 3, 2017, Mr. Schultz stepped down as chief executive officer and assumed the role of executive chairman. At that time his annualized salary was reduced from $1,500,000 to $1. |
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 43 |
EXECUTIVE COMPENSATION TABLES
FISCAL 2018 ALL OTHER COMPENSATION TABLE
Name |
Insurance Premiums ($)(1) |
Retirement Contributions ($)(2) |
Security ($)(3) |
Other ($) |
Total ($) |
|||||||||||||||
Kevin Johnson |
5,490 | 13,750 | 44,796 | 3,000 | (4) | 67,036 | ||||||||||||||
Scott Maw |
3,840 | 13,750 | | | 17,590 | |||||||||||||||
Rosalind Brewer |
4,941 | | | 139,653 | (5) | 144,594 | ||||||||||||||
Clifford Burrows |
5,490 | 13,750 | | 3,000 | (4) | 22,240 | ||||||||||||||
John Culver |
5,490 | 13,750 | | 3,000 | (4) | 22,240 | ||||||||||||||
Howard Schultz |
4,817 | 19,173 | 325,000 | | 348,990 |
(1) | Represents the premiums paid on behalf of our NEOs under our executive life and disability insurance plans. |
(2) | Represents Company matching contributions to the accounts of our NEOs in the Companys 401(k) plan. |
(3) | Represents the aggregate incremental costs to the Company of providing home security services and equipment. We determine the incremental cost to us for this benefit based on the actual costs or charges incurred. |
(4) | Represents the cost of providing an annual physical examination. |
(5) | Represents relocation expenses as a result of Ms. Brewer joining the Company as chief operating officer in fiscal 2018. |
44 / 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION TABLES
FISCAL 2018 GRANTS OF PLAN-BASED AWARDS TABLE
The following table sets forth information regarding fiscal 2018 annual incentive bonus awards and equity awards granted to our NEOs in fiscal 2018.
All Other |
All Other |
Exercise or Base Price of Option Awards ($/SH) |
Grant of Stock |
|||||||||||||||||||||||||||||||||||||||||||||||
Potential Future Payouts Under Non-Equity Incentive Plan Awards |
Potential Future Payouts Under Equity Incentive Plan Awards |
|||||||||||||||||||||||||||||||||||||||||||||||||
Name |
Award | Approval Date |
Grant Date(1) |
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
|||||||||||||||||||||||||||||||||||||||||
Kevin Johnson |
Annual Incentive(3) Stock Options(4) PRSUs(5)
|
|
11/14/2017
|
|
|
11/15/2017
|
|
240,000 | 3,000,000 | 6,000,000 |
|
29,365
|
|
|
117,460
|
|
|
234,920
|
|
|
535,615 |
|
|
56.70 |
|
|
4,233,929
|
| ||||||||||||||||||||||
Scott Maw |
Annual Incentive(3) Stock Options(4) PRSUs(5)
|
|
11/14/2017
|
|
|
11/15/2017
|
|
64,000 | 800,000 | 1,600,000 |
|
13,228
|
|
|
52,910
|
|
|
105,820
|
|
|
241,268 |
|
|
56.70 |
|
|
1,907,175
|
| ||||||||||||||||||||||
Rosalind Brewer |
Annual Incentive(3) Stock Options(6) RSUs(7)
|
|
8/18/2017 8/18/2017
|
|
|
11/15/2017 10/16/2017
|
|
120,000 | 1,500,000 | 3,000,000 |
|
N/A
|
|
|
76,489
|
|
|
N/A
|
|
|
367,376 |
|
|
54.91 |
|
|
2,681,771
|
| ||||||||||||||||||||||
Clifford Burrows |
Annual Incentive(3) Stock Options(4) PRSUs(5)
|
|
11/14/2017
|
|
|
11/15/2017
|
|
79,200 | 990,000 | 1,980,000 |
|
11,905
|
|
|
47,619
|
|
|
95,238
|
|
|
217,141 |
|
|
56.70 |
|
|
1,716,456 |
| ||||||||||||||||||||||
John Culver |
Annual Incentive(3) Stock Options(4) PRSUs(5)
|
|
11/14/2017
|
|
|
11/15/2017
|
|
79,200 | 990,000 | 1,980,000 |
|
11,905
|
|
|
47,619
|
|
|
95,238
|
|
|
217,141 |
|
|
56.70 |
|
|
1,716,456
|
| ||||||||||||||||||||||
Howard Schultz |
Annual Incentive(3) Stock Options(4) PRSUs(5)
|
|
11/14/2017
|
|
|
11/15/2017 11/15/2017
|
|
300,000 | 3,750,000 | 7,500,000 |
|
38,360
|
|
|
153,439
|
|
|
306,878
|
|
|
699,677 |
|
|
56.70 |
|
|
7,629,289
|
|
(1) | Annual option awards granted in fiscal 2018 were approved by the independent directors on the recommendation of the Compensation Committee except for grants to Messrs. Johnson and Schultz, which were approved by the independent members of the board. In accordance with our equity grant timing policy in place at the time of the November 2017 grant, the grant date for the regular annual equity grant was the final date of the November board meeting. |
(2) | The grant date fair value for PRSUs is reported based upon the probable outcome of the performance conditions (target) at the grant date. |
(3) | Reflects information regarding awards under the annual incentive bonus plan. |
(4) | Reflects stock options that vest in four equal annual installments (subject to rounding of partial shares) beginning on the first anniversary of the grant date. |
(5) | Reflects PRSUs that, if earned, vest 50% on the second anniversary of the grant date and 50% on the third anniversary of the grant date. |
(6) | Reflects stock options that vest in three equal annual installments (subject to rounding of partial shares) beginning on the first anniversary of the grant date. |
(7) | Reflects performance-vesting RSUs that, if earned, vest in three annual installments (subject to rounding of partial shares) beginning on the first anniversary of the grant date. |
The following narrative provides further detail with respect to the information in the table above.
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 45 |
EXECUTIVE COMPENSATION TABLES
46 / 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION TABLES
OUTSTANDING EQUITY AWARDS AT FISCAL 2018 YEAR-END TABLE
The following table provides information regarding stock options, RSUs and PRSUs held by our NEOs as of September 30, 2018. No NEO has any other form of equity award outstanding. For stock awards granted in November 2017, the amount listed below includes accrued dividend equivalents on unearned and unvested restricted stock units.
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||||||||||||||||||||||
Name |
Grant Date | Number of Securities Underlying Options (#) Total Grant |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Un Exercisable |
Number of Securities Underlying Options (#) Previously Exercised |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested ($)(1) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) |
|||||||||||||||||||||||||||||||||
Kevin |
11/15/2010 | (3) | 23,390 | 23,390 | | | 15.39 | 11/15/20 | ||||||||||||||||||||||||||||||||||||
Johnson |
3/16/2015 | (4) | 323,290 | 323,290 | | | 47.02 | 3/16/25 | ||||||||||||||||||||||||||||||||||||
11/16/2015 | (5) | 359,177 | 179,589 | 179,588 | | 60.68 | 11/16/25 | |||||||||||||||||||||||||||||||||||||
11/16/2015 | (6) | 27,315 | 1,552,585 | |||||||||||||||||||||||||||||||||||||||||
11/21/2016 | (5) | 445,633 | 111,409 | 334,224 | | 56.10 | 11/21/26 | |||||||||||||||||||||||||||||||||||||
11/21/2016 | (7) | 101,604 | 5,775,171 | |||||||||||||||||||||||||||||||||||||||||
4/17/2017 | (8) | 36,248 | 9,062 | 27,186 | | 58.08 | 4/17/27 | |||||||||||||||||||||||||||||||||||||
4/17/2017 | (7) | 8,264 | 469,726 | |||||||||||||||||||||||||||||||||||||||||
11/15/2017 | (5) | 535,615 | | 535,615 | | 56.70 | 11/15/27 | |||||||||||||||||||||||||||||||||||||
11/15/2017 | (9) | 119,509 | 6,792,915 | |||||||||||||||||||||||||||||||||||||||||
Scott |
11/19/2012 | (5) | 25,130 | 6,282 | | 18,848 | 24.87 | 11/19/22 | ||||||||||||||||||||||||||||||||||||
Maw |
11/11/2013 | (5) | 46,268 | 46,268 | | | 40.50 | 11/11/23 | ||||||||||||||||||||||||||||||||||||
2/18/2014 | (5) | 33,350 | 33,350 | | | 36.99 | 2/18/24 | |||||||||||||||||||||||||||||||||||||
11/17/2014 | (5) | 126,958 | 95,220 | 31,738 | | 38.92 | 11/17/24 | |||||||||||||||||||||||||||||||||||||
11/16/2015 | (5) | 126,768 | 63,384 | 63,384 | | 60.68 | 11/16/25 | |||||||||||||||||||||||||||||||||||||
11/16/2015 | (6) | 9,641 | 547,994 | |||||||||||||||||||||||||||||||||||||||||
11/21/2016 | (5) | 234,544 | 58,636 | 175,908 | | 56.10 | 11/21/26 | |||||||||||||||||||||||||||||||||||||
11/21/2016 | (7) | 53,476 | 3,039,576 | |||||||||||||||||||||||||||||||||||||||||
11/15/2017 | (5) | 241,268 | | 241,268 | | 56.70 | 11/15/27 | |||||||||||||||||||||||||||||||||||||
11/15/2017 | (9) | 53,833 | 3,059,877 | |||||||||||||||||||||||||||||||||||||||||
Rosalind |
10/16/2017 | (4) | 367,376 | | 367,376 | | 54.91 | 10/16/27 | ||||||||||||||||||||||||||||||||||||
Brewer |
5/1/2017 | (10) | 2,302 | 130,846 | ||||||||||||||||||||||||||||||||||||||||
10/16/2017 | (11) | 76,489 | 4,347,635 | |||||||||||||||||||||||||||||||||||||||||
Clifford |
11/19/2012 | (5) | 125,654 | 62,828 | | 62,828 | 24.87 | 11/19/22 | ||||||||||||||||||||||||||||||||||||
Burrows |
11/11/2013 | (5) | 185,076 | 185,076 | | | 40.50 | 11/11/23 | ||||||||||||||||||||||||||||||||||||
7/16/2014 | (12) | 15,242 | 866,355 | |||||||||||||||||||||||||||||||||||||||||
11/17/2014 | (5) | 179,610 | 134,708 | 44,902 | | 38.92 | 11/17/24 | |||||||||||||||||||||||||||||||||||||
11/16/2015 | (5) | 147,896 | 73,948 | 73,948 | | 60.68 | 11/16/25 | |||||||||||||||||||||||||||||||||||||
11/16/2015 | (6) | 11,247 | 639,279 | |||||||||||||||||||||||||||||||||||||||||
11/21/2016 | (5) | 211,089 | 52,773 | 158,316 | | 56.10 | 11/21/26 | |||||||||||||||||||||||||||||||||||||
11/21/2016 | (7) | 48,128 | 2,735,596 | |||||||||||||||||||||||||||||||||||||||||
11/15/2017 | (5) | 217,141 | | 217,141 | | 56.70 | 11/15/27 | |||||||||||||||||||||||||||||||||||||
11/15/2017 | (9) | 48,450 | 2,753,889 | |||||||||||||||||||||||||||||||||||||||||
John |
11/11/2013 | (5) | 129,554 | 32,388 | | 97,166 | 40.50 | 11/11/23 | ||||||||||||||||||||||||||||||||||||
Culver |
7/16/2014 | (12) | 15,242 | 866,355 | ||||||||||||||||||||||||||||||||||||||||
11/17/2014 | (5) | 136,708 | 102,532 | 34,176 | | 38.92 | 11/17/24 | |||||||||||||||||||||||||||||||||||||
11/16/2015 | (5) | 147,896 | 73,948 | 73,948 | | 60.68 | 11/16/25 | |||||||||||||||||||||||||||||||||||||
11/16/2015 | (6) | 11,247 | 639,279 | |||||||||||||||||||||||||||||||||||||||||
11/21/2016 | (5) | 211,089 | 52,773 | 158,316 | | 56.10 | 11/21/26 | |||||||||||||||||||||||||||||||||||||
11/21/2016 | (7) | 48,128 | 2,735,596 | |||||||||||||||||||||||||||||||||||||||||
11/15/2017 | (5) | 217,141 | | 217,141 | | 56.70 | 11/15/27 | |||||||||||||||||||||||||||||||||||||
11/15/2017 | (9) | 48,450 | 2,753,889 | |||||||||||||||||||||||||||||||||||||||||
Howard |
11/16/2009 | (5) | 1,220,448 | 820,448 | | 400,000 | 11.03 | 11/16/2019 | ||||||||||||||||||||||||||||||||||||
Schultz |
11/15/2010 | (5) | 1,050,932 | 1,050,932 | | | 15.39 | 11/15/2020 | ||||||||||||||||||||||||||||||||||||
11/14/2011 | (5) | 859,304 | 859,304 | | | 21.82 | 6/26/2021 | (13) | ||||||||||||||||||||||||||||||||||||
11/19/2012 | (5) | 861,624 | 861,624 | | | 24.87 | 6/26/2021 | (13) | ||||||||||||||||||||||||||||||||||||
11/11/2013 | (5) | 687,424 | 687,424 | | | 40.50 | 6/26/2021 | (13) | ||||||||||||||||||||||||||||||||||||
11/17/2014 | (5) | 667,122 | 667,122 | | | 38.92 | 6/26/2021 | (13) | ||||||||||||||||||||||||||||||||||||
11/16/2015 | (5) | 549,330 | 549,330 | | | 60.68 | 6/26/2021 | (13) | ||||||||||||||||||||||||||||||||||||
11/21/2016 | (5) | 609,813 | 609,813 | | | 56.10 | 6/26/2021 | (13) | ||||||||||||||||||||||||||||||||||||
4/17/2017 | (8) | 33,982 | 33,982 | | | 58.08 | 6/26/2021 | (13) | ||||||||||||||||||||||||||||||||||||
11/15/2017 | (5) | 699,677 | 699,677 | | | 56.70 | 6/26/2021 | (13) |
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 47 |
EXECUTIVE COMPENSATION TABLES
(1) | Value is calculated by multiplying the number of RSUs that have not vested by the closing market price of our stock ($56.84) as of the close of trading on September 28, 2018 (the last trading day prior to our September 30, 2018 fiscal year-end). |
(2) | Value is calculated by multiplying the number of RSUs that may be earned upon achievement of PRSU threshold performance by the closing market price of our stock ($56.84) as of the close of trading on September 28, 2018; actual number of RSUs earned will be based upon performance against applicable adjusted EPS and ROIC goals. |
(3) | Options vest 100% on the first anniversary of the grant date. |
(4) | Options vest in three equal annual installments (subject to rounding of partial shares) beginning on the first anniversary of the grant date. |
(5) | Options vest in four equal annual installments (subject to rounding of partial shares), beginning on the first anniversary of the grant date. |
(6) | RSUs that have been earned under PRSU awards and vest 50% on the second anniversary of the grant date and 50% on the third anniversary of the grant date. |
(7) | Reflects the number of RSUs that may be earned under the PRSU award upon achievement of target performance; actual number of RSUs earned will be based on the fiscal 2018 adjusted EPS and ROIC goals. On November 13, 2018, the Compensation Committee determined that the fiscal 2018 performance goals were not achieved and the PRSUs were paid at 0%. |
(8) | Options vest in four equal annual installments (subject to rounding of partial shares), beginning on November 21, 2017. |
(9) | Reflects the number of RSUs that may be earned under the PRSUs award upon achievement of target performance; actual number of RSUs earned will be based on the fiscal 2019 adjusted EPS and ROIC goals. |
(10) | Reflects deferred RSUs provided to Ms. Brewer as a non-employee director of the Company prior to becoming an executive. |
(11) | Reflects the number of performance-vesting RSUs earned upon achievement of the pre-established performance goal. |
(12) | Reflects RSUs that have been earned under PRSU awards and vest 60% on the third anniversary of the grant date, and 20% on each of the fourth and fifth anniversary of the grant date. |
(13) | Pursuant to Mr. Schultzs retirement agreement, the options expire on the earlier of (a) the applicable expiration date or (b) 36 months from his retirement date. |
48 / 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION TABLES
FISCAL 2018 OPTION EXERCISES AND STOCK VESTED
The following table provides information regarding stock options that were exercised by our NEOs and stock awards that vested during fiscal 2018. Option award value realized is calculated by subtracting the aggregate exercise price of the options exercised from the aggregate market value of the shares of common stock acquired on the date of exercise. Stock award value realized is calculated by multiplying the number of shares shown in the table by the closing price of our stock on the date the stock awards vested. As illustrated by the Grant Date column in the table below, Value Realized on Exercise and Value Realized on Vesting represent long-term gain over many years.
Option Awards
|
Stock Awards
|
|||||||||||||||||||
Name |
Grant Date |
Number of Shares Acquired on Exercise (#) |
Value Realized on Exercise ($) |
Number of Shares Acquired on Vesting (#) |
Value Realized on Vesting ($) |
|||||||||||||||
Kevin Johnson |
3/16/2015 | 29,772 | 1,756,548 | |||||||||||||||||
11/16/2015 | 27,316 | 1,563,568 | ||||||||||||||||||
Scott Maw |
2/18/2014 | 4,056 | 227,014 | |||||||||||||||||
11/17/2014 | 25,747 | 1,465,777 | ||||||||||||||||||
11/16/2015 | 9,641 | 551,851 | ||||||||||||||||||
Rosalind Brewer |
5/1/2017 | 2,302 | 131,813 | |||||||||||||||||
Clifford Burrows |
11/14/2011 | 100,000 | 5,700,000 | |||||||||||||||||
11/19/2012 | 62,826 | 3,583,733 | ||||||||||||||||||
7/16/2014 | 15,242 | 776,427 | ||||||||||||||||||
11/17/2014 | 36,425 | 2,073,675 | ||||||||||||||||||
11/16/2015 | 11,248 | 643,836 | ||||||||||||||||||
John Culver |
7/16/2014 | 15,242 | 776,427 | |||||||||||||||||
11/17/2014 | 27,725 | 1,578,384 | ||||||||||||||||||
11/16/2015 | 11,248 | 643,836 | ||||||||||||||||||
Howard Schultz |
11/19/2007 | 1,074,226 | 61,278,843 | |||||||||||||||||
11/17/2014 | 135,294 | 7,702,287 | ||||||||||||||||||
11/16/2015 | 72,722 | 3,950,324 | ||||||||||||||||||
11/15/2017 | 31,566 | 1,590,295 |
STARBUCKS CORPORATION | 2019 PROXY STATEMENT / 49 |
EXECUTIVE COMPENSATION TABLES
FISCAL 2018 NONQUALIFIED DEFERRED COMPENSATION TABLE
The following table shows contributions, earnings, withdrawals and distributions during fiscal 2018 and the account balances as of September 30, 2018 for our NEOs under the Management Deferred Compensation Plan.
Name |
Executive Contributions ($)(1) |
Aggregate Earnings ($)(2) |
Aggregate Withdrawals/ |