Starbucks’ new plan: millions for those at the top, patience for those at the bottom

Starbucks remains by some distance the biggest coffee chain in the United States based on every metric imaginable but the company has been going through something of a slump in terms of sales and revenue, which appears to have driven a wedge between employees at different ends of the pay scale.

A “Back to Starbucks” campaign has been implemented to both revitalize its image and convince stay-away customers to return, all the while a new competitor, China’s Luckin Coffee, has emerged on the scene, initially in New York.

Division within Starbucks over executives’ big-money incentives

Additionally, there is now division within Starbucks over the company’s decision to reward executives with up to $6 million in performance-based stock grants tied to the success of the “Back to Starbucks” turnaround plan. That includes a potential $113 million in his first year for new CEO Brian Niccol, a figure which encompasses a $75 million equity grant and $10 million in bonuses.

“These grants are designed to motivate and retain our senior leaders to deliver on the significant transformation required by our turnaround plan,” stated a document filed by Starbucks. “The grants are directly tied to the achievement of key components of the Back to Starbucks plan to encourage our senior leaders to achieve these goals as quickly as possible.”

Starbucks Workers United representatives have classed the multi-million-dollar incentives as “ridiculous and irresponsible” at a time when baristas are deeply unhappy with wage negotiations.

How much do Starbucks baristas earn?

Starbucks employees behind the counter earn an average of $19/hour, which works out at approximately $30/hour including benefits. In 2024, baristas earned a wage increase of 2-3%, compared to 3-5% in previous years. In April this year, the labor union rejected a company proposal guaranteeing an annual pay rise of 2%, citing it as insufficient.

“Starbucks cannot tell us that there is no money to put into a fair union contract for baristas when they paid Brian Niccol $96 million for 120 days of work in 2024 and have allocated millions upon millions for a glitzy manager conference and C-Suite bonuses,” Jasmine Leli, a barista in Buffalo, New York, told Fortune. “‘Back to Starbucks’ will only succeed when baristas can thrive—and the first step is finalizing fair union contracts that lock in the staffing, hours, and protections we need to do our jobs.”

Separate dispute over Starbucks dress code

The saga represents another divide between the company’s top management and shop-floor staff. In May, 2,000 baristas went on strike across the United States in protest at the chain’s new dress code, which they believe does nothing to improve the customer experience.

“It would be more productive if the union would put the same effort into coming back to the table that they’re putting into protesting wearing black shirts to work,” came Starbucks’ cutting response in a statement.

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