Howard Schultz opposes Starbucks settlement with activist investor Elliott

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Howard Schultz, the former CEO of Starbucks, is opposing a potential settlement between the company and activist investor Elliott Investment Management, the latest sign of tension at the world’s largest coffee chain.

Approximate founder of Starbucks has raised its objections to a Elliott The resolution was known to some board members, people familiar with the matter said.

Schultz has be censured leadership of the company in recent months despite no longer holding an official role at the company. He remains Starbucks’ sixth-largest shareholder, with a stake worth about $1.6 billion.

Elliott, known as an aggressive investor, has built a significant minority stake in the $86 billion company and has privately pushed for changes in recent weeks, including board representation, in an effort to revive Starbucks’ poor performance. Schultz and Elliott have not been in touch about the matter, one of the people said.

Companies under pressure from activists like Elliott often seek to negotiate deals with them rather than face a public fight, but the status of any settlement discussions between Starbucks and Elliott remains unclear.

“Howard left the board a year ago and while he has had limited contact with the board since then, his input has always been focused on Starbucks’ values ​​and culture as the primary drivers of success and performance,” said a person close to Schultz.

Billionaire former coffee machine salesman has led the company three separate times — for about 14 years starting in 1986, then from 2008 to 2017, and most recently as interim CEO from 2022 to 2023.

He was succeeded as CEO last year by Laxman Narasimhan, who joined from UK-based consumer health and hygiene group Reckitt. ​​Schultz remains chairman emeritus but has stepped down from the company’s board and said he does not have access to financial information.

Schultz, who has said he has no interest in returning to the CEO job, has remained calm. This spring, he criticized the company’s performance on LinkedIn, writing an open letter saying that senior executives and board members need to “spend more time with the people in blue aprons.”

He also appears on business podcasts. Buy in June, when talking about Starbucks’ history and his recommendations to management. “It hasn’t been a great year for Starbucks,” he said. “To be fair to Laxman, there have been a lot of external issues that have contributed to the pressure, as they do for any company. But the company hasn’t executed the way I think they should have.”

“If the company is going in a direction of mediocrity, I think the management and the board are responsible for that,” he shared later in the three-hour podcast.

Starbucks’ stock has fallen about 20 percent since the start of 2024. The company cut its financial guidance in January and again in April, when it reported a 4 percent decline in comparable-store sales for the quarter, its first decline since late 2020. The company is scheduled to report its third-quarter results on Tuesday.

Starbucks has had changes to its board of directors over the past year. Three new members, including YouTube and T-Mobile CEOs Neal Mohan and Mike Sievert, joined earlier this year. Microsoft CEO Satya Nadella left the board this spring.

Spokespeople for Schultz, Starbucks and Elliott declined to comment.