One of the things that marked the end of the pandemic was the return to the office. In some cases, the return was absolute. In others, however, companies opted for a hybrid model, allowing employees to work at home a certain number of days per week and requiring them to be in the office the rest of the week.
This is the case at Starbucks. Effective January 2023, the company’s policy requires employees to be in the office at least three days a week. The policy includes the company's next CEO, Brian Niccol. However, unlike other employees, he'll have specific amenities worthy of a person earning $1.6 million a year plus incentives.
1,000 miles. This is the distance between Newport Beach, California, and Seattle, Washington. The first city is where Niccol lives. The second is the headquarters of Starbucks. As the company’s CEO, one might expect he would move to Washington to work from the headquarters, but that's not the case. As the offer letter made public last week states:
“During your employment with the company, you will not be required to relocate to the company’s headquarters (currently in Seattle, Washington). You agree to commute from your residence to the company’s headquarters (and engage in other business travel) as is required to perform your duties and responsibilities.”
That means that Starbucks expects the CEO to go to its Seattle headquarters at least three times a week when he’s not on a business trip, a company spokesman told CNBC.
The subway doesn’t go this far. Unfortunately, driving from Newport Beach to Seattle and back three times a week doesn’t seem feasible, but that’s not a problem for Niccol, as the offer also includes the use of the company plane for “business-related travel in accordance with the company’s travel policy, travel between your city of residence and the company’s headquarters in Seattle, Washington and your personal travel in accordance with the company’s policies, up to a maximum amount of $250,000 per year.”
In addition, Starbucks will establish a small remote office in Newport Beach for its new CEO and an assistant of his choice.
Niccol's schedule. The same company spokesperson told CNBC that “Brian’s primary office and a majority of his time will be spent in our Seattle Support Center or out visiting partners and customers in our stores, roasteries, roasting facilities, and offices around the world. His schedule will exceed the hybrid work guidelines and workplace expectations we have for all partners.”
His salary. Niccol, who was previously the CEO of Chipotle, will earn $1.6 million annually. Depending on his performance, he will receive between $3.6 million and $7.2 million in bonuses and up to $23 million per year in stock.
Imagen | Starbucks
His previous job. Niccol was the CEO of Taco Bell until 2018. Taco Bell’s headquarters are in Irvine, California, a 15-minute drive from Niccol’s home in Newport Beach. In 2018, he became CEO of Chipotle, whose headquarters were in Denver, Colorado, 1,000 miles from his home. Three months after he took the job, Chipotle moved its headquarters from Denver to Newport Beach. The move affected 400 people.
Power differentials. This case is striking for one simple reason: it brings to the table the differences in bargaining power between a senior executive and a more junior employee when it comes to flexibility, remote work, and transportation. In fact, it’s not a matter of differences. It’s a huge gap, but it’s one of the prices that companies like Starbucks are willing to pay to hire a star executive like its future CEO.
Former Starbucks CEO Laxman Narasimhan. Image | Starbucks
Starbucks is going through a tough time. Its stock has been falling for a year, and a few months ago, former CEO Howard Schultz posted a message on LinkedIn criticizing the company’s leadership. CEO Laxman Narasimhan left the company in the aftermath, and Starbucks announced hiring Niccol, a person who had successfully managed major crises at two well-known brands, Taco Bell and Chipotle.
Remote work at two tiers. This case illustrates how the return to the office happens in two separate ways. On one hand, CEOs and senior executives can live where they want and commute to the office at no additional cost if the company covers the expenses.
On the other hand, companies may force lower-level employees to move to a different city and even live in specific neighborhoods. They may also be forced to choose between never being promoted or spending a significant amount of time and money to get to the office.
This article was written by Jose García and originally published in Spanish on Xataka.
Image | Chipotle, Starbucks edited by Xataka On
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