Starbucks Investor Group Calls for Director Replacement Amid Labor Dispute

• The investor group is targeting lead independent director Jorgen Vig Knudstorp and governance committee chair Beth Ford amid ongoing union negotiations following the company's longest-ever work stoppage late last year.
• Starbucks Workers United has been pressing for better staffing, more predictable schedules, and higher pay, creating a high-profile test for CEO Brian Niccol's revival strategy.
• The company responded by stating hourly partners earn an average of $30 per hour with benefits for those working just 20 hours weekly, while reallocating the eliminated committee's responsibilities across the board.

Summary: Starbucks Faces Investor Pressure Over Board Changes Amid Labor Dispute

A coalition of institutional investors, including major public-sector pension funds, is demanding the replacement of two Starbucks directors amid ongoing labor disputes with unionized workers. The group is targeting lead independent director Jorgen Vig Knudstorp and Beth Ford, chair of the Nominating and Corporate Governance Committee, ahead of the company's March 25 annual meeting.

Key Players:

The investor coalition includes New York State Comptroller Thomas DiNapoli, New York City Comptroller Mark Levine, Trillium ESG Global Equity Mutual Fund, SOC Investment Group, and the Merseyside Pension Fund.

Labor Dispute Context:

The pressure follows Starbucks' longest work stoppage in company history, which occurred late last year when Starbucks Workers United union staged strikes demanding better staffing, predictable schedules, and higher wages. Contract negotiations have been ongoing throughout this period.

Governance Concerns:

Investors also criticized the board's unexplained elimination of its Environmental, Partner, and Community Impact Committee in January. Starbucks responded that the committee's responsibilities were redistributed across existing committees, with the full board assuming primary labor oversight.

Company Response:

Starbucks defended its employment practices, stating hourly partners earn an average of $30 per hour with comprehensive benefits for those working just 20 hours weekly, calling it "the best job in retail."

Market Implications:

This dispute represents a significant test for CEO Brian Niccol as he attempts to revive sales. Investors warned that sustaining any turnaround may be difficult without constructive labor relations, suggesting potential risks to the company's operational stability and financial performance.