February 12th, 2009 | Author: admin
Starbucks Annual Meeting – March 18, 2009 – Seattle
Starbucks will hold its annual stockholders meeting in Seattle next month. Among the items they are asking stockholders to vote on is the increasing of the board size from its current 9 members to 11. When you look at the agenda and statement for the annual meeting, and then take into account the current economic climate and the claims made by Starbucks to effectively “trim costs”, a few things don’t quite seem to add up.
In an open statement to ALL Starbucks stockholders, take a close look at the Meeting Statement and see if you have better answers to the questions we raise here.
New Board Members: It’s proposed to add two new members to the Board, Sheryl Sandberg, COO of Facebook and Kevin R Johnson and ex-Microsoft man and currently CEO of Jupiter Networks. Iteresting that both are IT related people – does this say something about where Starbucks sees future marketing efforts being concentrated – Social Networks?
While many long serving employees are being given their “pink slips”, these two Non-Executive directors will be given a compensation package of $240,000 EACH! This would bring the Non-Executive pay pot to $2.4M per year, just for attending 4-6 Board meetings per annum. The payments are of course in line the compensation packages recommended by the Compensation Review Committee in 2008. Oh, by the way, that committee is made up of Starbucks Non-Executive Directors – guess that’s why it was approved!
At a time when others are loosing their jobs and the emphasis is on reducing costs, where is the justification for adding 2 more part-time people to the Board at $240,000 EACH? Unless there are overwhelming and compelling reasons why these people should be appointed VOTE – NO to this proposal.
Selection of Board Members: The Starbucks rules are pretty broad when it comes to who should be nominated for a seat on the Board. What’s interesting is that there is an option for a nominee to come from within the company – an existing employee – Hooray!!!. So, why is it that apart from Howard Shultz, ALL other Board members are non-employees?
There is a distinct place for Non-Executive Directors on any Board, they can bring different perspectives and are not lost in the “can’t see the wood for the trees” syndrome that can color the decisions made by a Board that is totally Executive, but there does need to be a balanced mix between Executive and Non-Executive Board Directors. As there are no selections from within Starbucks ranks, does that say something about the caliber of senior executives within Starbucks? Just asking! Or are the appointments predicated around the “I’ll scratch your back if you scratch mine?” Again, just asking! Perhaps Ms. Sandberg’s political connections are what Howard i s seeking ( a former Chief of Staff at the Treasury under Clinton – no Monika jokes please). Can you see it – Headline News : The White House proudly brews Starbucks coffee!!!!!
Stockholders – stick to the principles of cutting costs VOTE NO to new board appointments.