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Sunday, September 24, 2023
Sept. 24, 2023

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Starbucks announces new CEO to replace Howard Schultz


SEATTLE — Laxman Narasimhan has been named as Starbucks’ new CEO, replacing three-time chief executive Howard Schultz.

Narasimhan was the chief executive of U.K.-based Reckitt, which makes Lysol and baby formula products. He starts next month as CEO, and will fully take over in April. Schultz will remain on the board after the transition.

Schultz stepped in as interim CEO after Kevin Johnson announced in March that he would retire. Schultz returning to the company he’d built into worldwide coffee juggernaut amid a unionization movement in Starbucks stores across the U.S. Over 211 stores have successfully unionized, according to the National Labor Relations Board.

Since Schultz’s return, the company closed 16 stores across the U.S. — including six in the Puget Sound area — due to safety concerns. The closures are part of Starbucks’ so-called “Reinvention” project. Schultz said in June during a DealBook New York Times conference unions have no place in the project.

The company also saw its sales hurt in China, its second-largest market, because of COVID-19 restrictions that forced the coffee giant to close stores.

Starbucks has replaced key executives in the center of the union fights. Rossann Williams resigned as head of North America in June, and general counsel Rachel Gonzalez was removed in April.

Narasimhan announced Wednesday he would step down as CEO of Reckitt, a role he held since 2019. He has held previous executive roles at PepsiCo and McKinsey, and is a trustee of the Brookings Institute, a Washington, D.C., think tank. PepsiCo and Starbucks have an existing business relationship through ready-to-drink beverages, which Starbucks has attributed as a steady source of revenue for the company.

“The perspectives he brings will be a strong asset as we build on our heritage in this new era of greater well-being,” Schultz said in a statement about Narasimhan. Narasimhan’s base annual salary will be $1.3 million, according to a document filed with the U.S. Securities and Exchange Commission.

He is relocating from London to Seattle. Brazilian executive Nicandro Durante will take over the helm of Reckitt.

Narasimhan joined Reckitt at a time when the consumer goods company was facing a cyberattack, a failed product launch, production glitches and flat performance by core brands.

Besides those issues, consumers were turning away from Reckitt due to Narasimhan’s predecessor’s pitch that sales of premium over-the-counter medicine would accelerate in the developing world, led by increasing income and higher health care standards. The failed decision affected a division of Reckitt that is responsible for two-thirds of its sales. During his three years as CEO, investors said Narasimhan helped bring the company’s performance back to sustainable levels.