Kevin Johnson surprisingly turned in his resignation as Starbucks (SBUX) chief executive after 13 years with the coffee chain.
The company called it a retirement for the executive, 61, who has served the past five years as CEO.
He will step down April 4 and continue as an employee and special consultant to the company and the board through September, a company statement said.
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 rejoin the board.
“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 Chairwoman Mellody Hobson said in a statement.
"The economic certainty provided to partners during the early months of the Covid shutdown, 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.”
Image source: TheStreet.
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 U.S. He led the company from its founding -- at least its founding in its current form -- until he stepped 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 oversaw the expansion of 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 Schultz 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 had 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, which 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 enabled it to operate when all its dining rooms were closed during the pandemic.
The Return of a Starbucks Legend
In his role as interim CEO, "Schultz will focus on setting an innovation framework, while also coaching and onboarding the next permanent CEO of Starbucks," the company said.
“Our success is not an entitlement. We must continue to earn the trust of our people and our customers every day by how we deliver the Starbucks Experience, how we treat each other, and how we act as responsible community members and corporate citizens," Schultz said.
"With the backdrop of Covid recovery and global unrest, it's critical we set the table for a courageous reimagining and reinvention of the future Starbucks experience for our partners and customers.”
Hobson, an independent director, made 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 socioeconomic 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.”
Schultz will receive a salary of $1 for serving as interim CEO.
“When you love something, you have a deep sense of responsibility to help when called," Schultz said.
"Although I did not plan to return to Starbucks, I know the company must transform once again to meet a new and exciting future where all of our stakeholders mutually flourish."
