<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



Starbucks announced Thursday that former PepsiCo executive Laxman Narasimhan will succeed Howard Schultz as its CEO, as the company wrangles with issues from a massive unionization push at its stores to declining sales in China.



<h2 class="wp-block-heading">KEY FACTS</h2>



Narasimhan, 55, will take over Starbucks&#8217; day-to-day operations from Schultz on April 1, the company&nbsp;<a href="https://stories.starbucks.com/press/2022/starbucks-names-laxman-narasimhan-as-next-chief-executive-officer/" target="_blank" rel="noreferrer noopener">said</a>&nbsp;in a news release.



Narasimhan said earlier Thursday that he <a href="https://www.wsj.com/articles/lysol-makers-ceo-departs-in-surprise-move-11662029259?mod=article_inline" target="_blank" rel="noreferrer noopener">planned</a> to step down at the end of September as CEO of the U.K.-based cleaning and health products manufacturer Reckitt Benckiser, the maker of Lysol and Clearasil, a role he&#8217;s served in for three years.



The Indian-born Narasimhan&nbsp;<a href="https://www.reckitt.com/about-us/our-leadership/the-board/laxman-narasimhan/" target="_blank" rel="noreferrer noopener">worked</a>&nbsp;in various executive roles at PepsiCo from 2012 to 2019, rising to chief commercial officer, and at one point struck a deal with Starbucks to partner to sell the coffee brand&#8217;s pre-packaged beverages, according to the&nbsp;<a href="https://www.wsj.com/articles/starbucks-names-laxman-narasimhan-new-ceo-11662062713?mod=djemalertNEWS" target="_blank" rel="noreferrer noopener">Wall Street Journal</a>.



Narasimhan spent 19 years at McKinsey &amp; Co. prior to joining PepsiCo.



Narasimhan was&nbsp;<a href="https://www.wsj.com/articles/lysol-makers-ceo-departs-in-surprise-move-11662029259?mod=article_inline" target="_blank" rel="noreferrer noopener">credited by analysts</a>&nbsp;with executing an effective turnaround strategy at Reckitt, selling underperforming units and capitalizing on a surge in demand for Lysol amid the pandemic.



His two grown children live in the U.S. and he had been looking to return to the country, according to the <a href="https://www.nytimes.com/2022/09/01/business/dealbook/starbucks-ceo.html" target="_blank" rel="noreferrer noopener">New York Times</a>.



<h2 class="wp-block-heading">CRUCIAL QUOTE</h2>



“He’s a true operator and has the DNA of an entrepreneur,” Schultz told the&nbsp;<a href="https://www.nytimes.com/2022/09/01/business/dealbook/starbucks-ceo.html" target="_blank" rel="noreferrer noopener">Times</a>, asserting that Narasimhan’s strengths in technology and supply chain management would be an asset to Starbucks.



<h2 class="wp-block-heading">KEY BACKGROUND</h2>



Schultz has served as interim CEO since March—marking his third stint as head of the company—after former company head Kevin Johnson stepped down. Schultz&#8217;s tenure has been tumultuous, with the CEO pushing back&nbsp;<a href="https://news.bloomberglaw.com/daily-labor-report/starbucks-ceos-anti-union-comments-straddle-line-of-legality" target="_blank" rel="noreferrer noopener">against</a>&nbsp;a rapidly expanding unionization effort at the company&#8217;s stores. Unions have formed at more than 200 Starbucks locations over the past few months, while organization efforts are in the works at many more stores. Schultz has also&nbsp;<a href="https://www.wsj.com/articles/starbucks-howard-schultz-change-frappuccinos-11661888871" target="_blank" rel="noreferrer noopener">pushed</a>&nbsp;for a major company overhaul, which includes rethinking how baristas make drinks.



<h2 class="wp-block-heading">FURTHER READING</h2>



<a href="https://www.wsj.com/articles/starbucks-names-laxman-narasimhan-new-ceo-11662062713?mod=djemalertNEWS" target="_blank" rel="noreferrer noopener">Starbucks Names Laxman Narasimhan New CEO</a>&nbsp;(Wall Street Journal)



<a href="https://www.wsj.com/articles/starbucks-howard-schultz-change-frappuccinos-11661888871" target="_blank" rel="noreferrer noopener">Starbucks Is Rethinking Almost Everything, Including How to Make Frappuccinos</a> (Wall Street Journal)



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<a href="https://www.forbes.com/companies/starbucks/" target="_blank" rel="noopener">Starbucks</a> chairman and former CEO <a href="http://www.forbes.com/profile/howard-schultz/" target="_blank" rel="noopener">Howard Schultz</a> has never been one to hold back on giving his opinion about the state of the country. On Thursday, speaking at the DealBook conference in New York City, Schultz continued his outspoken streak &#8211; especially when it came to the subject of the GOP&#8217;s new <a href="https://waysandmeansforms.house.gov/uploadedfiles/bill_text.pdf" target="_blank" rel="noopener">tax proposal</a>, which has suggested lowering the corporate tax rate to 20%.
<a href="https://twitter.com/intent/tweet?url=http%3A%2F%2Fwww.forbes.com%2Fsites%2Fmaggiemcgrath%2F2017%2F11%2F09%2Fstarbucks-howard-schultz-gop-tax-plan-is-fools-gold-that-doesnt-help-vulnerable-americans%2F&amp;text=It%E2%80%99s%20fool%E2%80%99s%20gold%20that%20he%20wants%20to%20take%20the%20corporate%20tax%20rate%20from%2035%25%20to%2020%25.%22%20Howard%20Schultz%20on%20GOP%20tax%20proposal%3A" target="_blank" rel="noopener">&#8220;This is not tax reform. This is a tax cut. It’s fool’s gold that he wants to take the corporate tax rate from 35% to 20%,&#8221;</a> Schultz said Thursday morning. &#8220;For what purpose? Is that profit going to go back to the people who need it the most? Is that going to help half the country that doesn’t have $400 in their bank account for a crisis? No.”
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Schultz didn&#8217;t stop there. &#8220;I don’t believe corporate America needs a 20% tax cut when in fact you’re <a href="https://www.forbes.com/sites/startswithabang/2017/11/07/the-gop-tax-plan-will-destroy-graduate-education/#2849f31f3d2f" target="_blank" rel="noopener">not doing anything to help students</a>, you’re taking away that benefit, and you’re <a href="https://www.forbes.com/sites/samanthasharf/2017/11/03/what-the-republican-tax-plan-means-for-the-value-of-your-home/#4ae0cb3a3c4d" target="_blank" rel="noopener">[reducing] the mortgage benefit</a> and so many people in America are living paycheck to paycheck,&#8221; he continued. &#8220;The country and American people are asking for and demanding and in great need of a more compassionate government and more compassionate society. The tax cut is not going to create a level playing field and more compassionate society.&#8221;
(For more details on the bill, which was released last week, see Forbes senior editor <a href="https://www.forbes.com/sites/kellyphillipserb/2017/11/02/from-mortgage-caps-to-tax-brackets-how-the-house-tax-bill-could-impact-your-taxes/#29faec0feb83" target="_blank" rel="noopener">Kelly Erb&#8217;s breakdown here</a>.)
When asked by an audience member what Starbucks would do with its tax cut, Schultz said first that he doesn&#8217;t think the tax proposal will pass, but then said that if it does, the majority of the savings would &#8220;not&#8221; go to corporate profits. &#8220;We will find other ways to create a contribution back to either the communities we serve, the initiatives we have with our veterans or obviously our people with benefits,&#8221; he said.
Schultz had come to the DealBook conference to discuss the role that public corporations should play in America in 2017 &#8211; a subject he is well-qualified to pontificate upon given some of his public comments and activity throughout President Trump&#8217;s first year in office. (&#8220;The moral fiber, the values, and what we as a country have stood for is literally hanging in the abyss,&#8221; Schultz <a href="https://www.cnbc.com/2017/08/18/starbucks-chairman-questions-countrys-moral-fiber.html" target="_blank" rel="noopener">told Starbucks employees</a> in August, following Trump&#8217;s equivocating remarks about the white supremacist violence in Charlottesville. And in January, in response to the president&#8217;s attempted travel ban on immigrants and refugees from seven Muslim-majority countries, Schultz and Starbucks announced a plan to hire <a href="https://www.forbes.com/sites/maggiemcgrath/2017/01/29/hitting-back-at-trumps-executive-order-starbucks-ceo-vows-to-hire-10000-refugees/#1579f3920bb3" target="_blank" rel="noopener">10,000 refugees over the next five years</a>.)
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On Thursday, Schultz said that he doesn&#8217;t believe any company or chief executive should take a political position for vanity or personal gain. But, he continued, <a href="https://twitter.com/intent/tweet?url=http%3A%2F%2Fwww.forbes.com%2Fsites%2Fmaggiemcgrath%2F2017%2F11%2F09%2Fstarbucks-howard-schultz-gop-tax-plan-is-fools-gold-that-doesnt-help-vulnerable-americans%2F&amp;text=%24SBUX%20chairman%20Howard%20Schultz%3A%20%22I%20do%20think%20the%20rules%20of%20engagement%20for%20a%20public%20company%20have%20changed%20dramatically.%22" target="_blank" rel="noopener">&#8220;I do think the rules of engagement for a public company have changed dramatically.</a> And I think we have a moral obligation to try to raise the national discourse on the things that are not so much political, but are conversations that need to take place.&#8221;
His rhetoric and actions may resemble those of a person with political ambitions, but Schultz has repeatedly denied that he is interested in running for public office. Last year, <a href="https://www.forbes.com/sites/georgeanders/2016/03/01/howard-schultzs-stormy-crusades-the-starbucks-boss-opens-up/#1bbd463a4154" target="_blank" rel="noopener">he told Forbes</a> that he doesn&#8217;t think government holds the answers to the issues that concern him the most. He reiterated that stance on Thursday.
&#8220;I’m not thinking about that,&#8221; Schultz said, launching into a response befitting of a politician, &#8220;but I’m deeply concerned about the country and direction of the country. I’m deeply concerned about our standing in the world, and I’m deeply concerned about Americans who are not participating in the economy.&#8221; &#8211; Written by <a href="https://www.forbes.com/sites/maggiemcgrath/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Maggie McGrath</a>, FORBES STAFF

Tag: Starbucks

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