Proposal 2 Advisory Resolution to Approve Our Executive Compensation
At Starbucks Corporations 2021 Annual Meeting, our shareholders will vote on an advisory resolution to approve the compensation program
for our named executive officers during fiscal-year 2020, or the Say-on-Pay resolution. Our board of directors recommends that shareholders vote in favor of the
resolution. Institutional Shareholder Services and Glass Lewis are recommending that shareholders vote against the resolution because they do not believe there is adequate rationale for the one-time long-term
performance-based cash award made in December 2019 to each of Kevin Johnson, our chief executive officer (ceo) (the Award) and our then chief operating officer (coo), who forfeited her award in connection with her departure from the
company in February 2021.
We respectfully disagree with the proxy advisors recommendations. The purpose of this supplemental
disclosure is to provide additional information regarding the rationale for the Award and clarify that the ultimate payout from the Award will not be known until the conclusion of fiscal-year 2022.
The Award was carefully considered and designed by our boards Compensation and Management Development Committee (the
Committee) reflecting advice from its independent compensation consultant, F.W. Cook & Co., Inc., with a clear rationale believed to serve the long-term interests of all our stakeholders. The Award was described in our proxy
statement Compensation Discussion and Analysis (CD&A) last year, when approximately 84% of votes were cast in favor of our Say-on-Pay resolution. In the
meantime, no actual value has been delivered from the Award, which is based on performance for a three-year period from October 1, 2019 through September 30, 2022. The Committee believes that the assessment of pay-for-performance alignment is most fairly judged based on the actual payout at the conclusion of the performance period.
Encourage Long-Term Leadership Continuity in an Intensely Competitive Market
The Award was designed to retain Mr. Johnson through at least the end of fiscal-year 2022 by providing compelling upside reward
opportunity beyond Starbucks regular executive compensation program for exceptional performance. Voluntary termination or retirement as both a Starbucks partner and director prior to the end of fiscal-year 2022 would result in forfeiture of the
Award.
Mr. Johnson became our ceo on April 3, 2017. From that date through March 5, 2021, the team of executive partners
(employees) that he assembled has driven more than $39 billion of growth in our market-capitalization value, which currently exceeds $123 billion. From the beginning of the performance period of the Award through March 5, 2021,
Starbucks market-capitalization value increased by $21 billion. Under Mr. Johnsons leadership since becoming ceo through March 5, 2021, Starbucks total shareholder return (TSR) was 95%, which is approximately the 68th percentile relative to current constituents of the S&P 500. From the beginning of the performance period of the Award through March 5, 2021, Starbucks TSR was 25%. Execution across
Mr. Johnsons multi-faceted, transformational Growth at Scale agenda led us to become an innovator in digital applications to improve the experience of our customers; an exemplary model for workforce engagement including COVID-19 protections and diversity, equity, and inclusion; and an advocate for protecting the environment by investing in reducing the companys carbon footprint.
Continuity in Mr. Johnsons role is of particular importance to Starbucks during the period covered by the Award, as we continue to
advance our highly successful Growth at Scale agenda. The Committee granted the Award with the view that it was critical to continue to reward extraordinary leadership and shareholder return, off the strong base that Starbucks had
delivered during 2019, but only to the extent such strong performance was sustained. As a result, the Committee designed the grant to reward forward-looking, multi-year performance and observes from our coos departure that even the potential
incremental reward opportunity from the Award did not eliminate the risk of losing Starbucks management talent.
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