Kevin Johnson has given his resignation and founder/former CEO Howard Schultz will take over on an interim basis.
Kevin Johnson has surprisingly turned in his resignation as Starbucks (SBUX) – Get Starbucks Corporation Report CEO after 13 years with the coffee chain. The company has called it a “retirement” for the executive who has served 13 years at the company, the last five as its chief executive.
He will step down as of April 4 and “will continue to serve as a Starbucks partner (employee) and special consultant to the company and Board of Directors through September.”
The company has hired an outside firm to help with a search for Johnson’s successor. His predecessor, Howard Schultz will take over as interim CEO on April 4 and will also rejoin the company’s board of directors.
“On behalf of the entire Board, I want to express our sincerest thanks to Kevin for his leadership of Starbucks. Kevin and the entire executive team stepped up to the challenge of the pandemic and navigated one of the most difficult periods in modern history,” Starbucks Chair Mellody Hobson said in a press release. “The economic certainty provided to partners during the early months of the COVID shut down, as well as during mandatory quarantines, underscores our core values and will be an enduring legacy for the company. During Kevin’s tenure, Starbucks scaled an industry-leading digital offering spanning nearly 45 million Starbucks Rewards members in the U.S. and China.”
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Howard Schultz Comes Back to Starbucks
Schultz built Starbucks from a single coffee roasting location into an international chain of cafes. It was his vision that brought the idea of an Italian-style coffee shop to the United States. He led the company from its founding — at least its founding in its current form — until stepping down in 2000.
After he left, the company kept growing but struggled. Schultz returned as CEO in 2008 and reinvigorated the brand, growing it into the company it has become. He stepped down as CEO again in 2017, briefly taking a role as executive chairman.
In that position, he was overseeing expanding the company’s premium brand. That did not appear to be a priority for Johnson, who instead chose to focus resources on improving the company’s operations and efficiency.
No rift was reported between the two men, but Shultz fully stepped away from the company in 2018 and briefly flirted with running for president.
Johnson Said This Move Was Planned
While Johnson’s resignation seems stunning, he said he has planned to make this move and that he’s not springing it on the company.
“A year ago, I signaled to the Board that as the global pandemic neared an end, I would be considering retirement from Starbucks. I feel this is a natural bookend to my 13 years with the company,” he said.
Johnson also praised his predecessor and interim replacement.
“As I make this transition, we are very fortunate to have a founder who is able to step in on an interim basis, giving the Board time to further explore potential candidates and make the right long-term succession decision for the company,” he said. “I have enjoyed every minute of the job and am proud of what we have achieved together. It has been an honor to serve the 400,000 Starbucks green apron partners around the world and I want to thank them for their service, resilience, and optimism.”
Johnson has been a hands-on leader for the company serving shifts in stores in order to gain first-hand experience as to what’s happening in the field. He also led the creation of the company’s Tryer Center, its innovation center that has led to a number of menu and in-store innovations.
A champion of the company’s digital strategy, Johnson looked prescient when the coffee chain’s digital operations allowed it to still operate when all of its dining rooms were closed during the pandemic.
Hobson, an independent director, made it clear what the company expected from Schultz. She did not comment as to whether he would be considered for the permanent position and Schultz has not commented on that either.
“For 50 years, Starbucks has been relentlessly focused on exceeding the expectations of our people and our customers, while delivering best-in-class financial performance,” said Hobson. “As the company navigates the aftermath of the pandemic and socio-economic forces impacting the lives of all our stakeholders, Howard will reinforce the company’s culture, underscoring the organization’s commitment to innovating and executing on our core purpose and reason for being: to inspire and nurture the human spirit—one person, one cup and one neighborhood at a time.”
