STARBUCKS CORP (Form: 8-K, Received: 01/07/2021 16:06:25)

STARBUCKS CORP false 0000829224 0000829224 2021-01-07 2021-01-07

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 7, 2021

Starbucks Corporation

(Exact name of registrant as specified in its charter)

LOGO

Washington

0-20322

91-1325671

(State or other jurisdiction of

incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

2401 Utah Avenue South,

Seattle, Washington 98134

(Address of principal executive offices) (Zip Code)

(206) 447-1575

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title

Trading

Symbol

Name of each exchange

on which registered

Common Stock, par value $0.001 per share

SBUX

NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Selection 13(a) of the Exchange Act. ☐

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officer.

On January 7, 2021, Starbucks Corporation (the “Company” or “Starbucks”) announced the appointment of Rachel Ruggeri as executive vice president and chief financial officer, effective February 1, 2021. In this capacity, Ms. Ruggeri will serve as the Company’s principal financial officer. The Company also announced that Patrick Grismer will retire as executive vice president and chief financial officer of the Company effective February 1, 2021. Effective February 1, 2021, Mr. Grismer will transition to a senior advisor role but remain employed (with the same base salary and benefits) through May 2, 2021 subject to the execution of legal documentation.

Ms. Ruggeri, 51, has 28 years of experience in accounting, financial planning and analysis, and business process improvement. She has served as the Company’s senior vice president, Finance, Americas since June 1, 2020. Ms. Ruggeri initially joined Starbucks in 2001 as a member of the accounting team, where, in her first year, she had the responsibility of helping to launch the first Starbucks Card. During her combined tenure of 16 years at Starbucks, Ms. Ruggeri has held a variety of finance positions of increasing responsibility, including vice president of Corporate Financial Planning and Analysis, vice president of Finance in support of the U.S. Business, and senior vice president of Global Retail. In addition to her time at Starbucks, Ms. Ruggeri served as the senior vice president and chief financial officer of Continental Mills, Inc., a maker of breakfast, baking and snack brands, from August 2018 to May 2020.

In connection with Ms. Ruggeri’s appointment, the Compensation and Management Development Committee of the Board of Directors of the Company approved an annualized base salary of $800,000, an annual bonus target under the Company’s Executive Management Bonus Plan of 120% of base salary and a promotional equity award with a value of $1,000,000. The equity award will consist of time-vested restricted stock units (“RSUs”). The RSUs will vest 50% on the second anniversary, and 50% on the fourth anniversary, of the date of grant, subject to continued employment. The foregoing description is qualified in its entirety by reference to Ms. Ruggeri’s Offer Letter dated January 6, 2021, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

There is no arrangement or understanding between Ms. Ruggeri and any other person pursuant to which Ms. Ruggeri was appointed. There are no family relationships, as defined in Item 401 of Regulation S-K, between Ms. Ruggeri and any of the Company’s executive officers or directors or persons nominated or chosen to become a director or executive officer. There are no transactions in which Ms. Ruggeri has an interest requiring disclosure under Item 404(a) of Regulation S-K.

In connection with Mr. Grismer’s retirement, the Company will pay him a cash transition services bonus of $658,019 representing a pro-rated bonus for fiscal year 2021 (at the target level) subject to the execution of legal documentation.

Item 7.01

Regulation FD Disclosure

A copy of the Company’s press release relating to the announcement described in Item 5.02, dated January 7, 2021, is furnished as Exhibit 99.1 to this Form 8-K.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.


Exhibit No.		Description

10.1*		Offer Letter dated January 6, 2021 between Starbucks Corporation and Rachel Ruggeri

99.1		Press release of Starbucks Corporation dated January 7, 2021

104		Cover Page Interactive Data File (formatted as Inline XBRL)

*	Denotes a management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	STARBUCKS CORPORATION
Dated: January 7, 2021
	By:	/s/ Rachel A. Gonzalez
		Rachel A. Gonzalez
		executive vice president, general counsel and secretary

Exhibit 10.1

January 6, 2021

Dear Rachel,

Thank you for your contributions to Starbucks success and congratulations on your promotion to the role of executive vice president and chief financial officer. I look forward to your first day on February 1, 2021.

Here Are The Specifics Of Your Offer:

Base Salary

You will be paid a base salary that annualizes to $800,000.

Promotional Equity Award

You may be eligible to receive an equity award with an economic value of $1,000,000 (USD) under the 2005 Key Employee Sub-Plan to Starbucks Corporation 2005 Long-Term Equity Incentive Plan (the “Plan”) with 100% in the form of restricted stock units. Your eligibility for the restricted stock units is subject to approval by the Compensation and Management Development Committee of the Board of Directors (“Committee”) or its designee. The grant date for your equity awards will be after you assume your new position and otherwise effective in accordance with the Company’s equity grant timing guidelines. The restricted stock units will vest 50% on the second anniversary date of the grant and 50% on the fourth anniversary date of the grant, subject to your continued employment.

Executive Management Bonus Plan

You will be eligible to participate in the Executive Management Bonus Plan (EMBP) in fiscal 2021. Your incentive target will be 120% of your eligible base salary, prorated from your eligibility date in your new role. For more information about the EMBP please talk with your Partner Resources contact. Starbucks reserves the right to review, change, amend, or cancel incentive plans at any time.

Long-Term Incentives

Starbucks Total Rewards philosophy includes long-term incentives. Each year, as determined by the Committee, you may be eligible to receive an equity award under the Leadership Stock Plan with 60% of the economic value in the form of performance restricted stock units and 40% of the economic value in the form of time-based restricted stock units. Annual awards are typically granted in November and are contingent upon Committee approval after considering a number of factors. You will be eligible for an annual long-term incentive award starting in fiscal 2022 (with an expected grant sometime in November 2021). Starbucks reserves the right to review, change, amend, or cancel long-term incentive plans at any time.

Stock Ownership

As a senior executive, the Company’s executive stock ownership guidelines will apply to you. The guidelines require covered executives to achieve a minimum investment in Starbucks stock within five (5) years. Your minimum investment as evp and chief financial officer is three (3) times your annual base salary. A copy of the guidelines will be provided to you.

Executive Life Insurance

As an executive, you and your family have a greater exposure to financial loss resulting from your death. Starbucks recognizes this exposure and has provided for coverage greater than outlined in Your Special Blend. You will receive partner life coverage equal to three (3) times your annualized base pay, paid for by Starbucks. You may purchase up to an additional two (2) times your annualized base pay (for a total of five (5) times pay) to a maximum life insurance benefit of $2,000,000.

Executive Physical Exam

You are eligible to participate in Starbucks executive physical program. Information about the program and our program provider will be emailed to you (new participants are notified at the beginning of each calendar quarter). The program provider will contact you shortly thereafter to establish an appointment. If you have questions about this physical, please consult your Partner Resources contact.

Insider Trading

You will be prohibited from trading Starbucks securities (or, in some circumstances, the securities of companies doing business with Starbucks) from time to time in accordance with the Company’s Insider Trading Policy. A copy of the policy will be provided to you on your first day and you will be required to complete an online training and certify that you have read and understood the policy.

Coffee and Dairy Hedging

As an officer of the Company you are prohibited from trading in coffee or dairy futures, options or similar instruments for your own account. If you have further questions, please consult your Partner Resources contact.

If you accept this offer it is contingent on the following conditions of hire including:

•

Signing a Confidentiality, Non-Solicitation and Non-Competition Agreement

Your employment with Starbucks Corporation will be “at will,” meaning that either you or the Company will be entitled to terminate your employment at any time and for any reason, not prohibited by law.

On behalf of the entire team, I wish you the best in your new role and look forward to your continued success and partnership.

Warm regards,

/s/ Kevin Johnson

Kevin Johnson

president and ceo

Enc.	Confidentiality, Non-Solicitation and Non-Competition Agreement

Coffee Heding Policy

I accept employment with Starbucks Corporation, or its wholly-owned subsidiaries, according to the terms set forth above.


/s/ Rachel Ruggeri				1/6/2021
Rachel Ruggeri				Date of Acceptance

Exhibit 99.1

Starbucks Announces Chief Financial Officer Succession

•

Patrick Grismer, executive vice president and cfo, will retire in May 2021

•

Rachel Ruggeri, senior vice president of Finance, Americas, promoted to executive vice president and cfo, effective February 1, 2021

SEATTLE, WA – January 7, 2021 — Starbucks Corporation (NASDAQ: SBUX) today announced that after a more than 35-year career in finance, Patrick Grismer has decided to retire from his position as executive vice president and chief financial officer (cfo) of the Company effective February 1, 2021. Rachel Ruggeri, senior vice president of Finance, Americas and a 16-year Starbucks partner, will succeed Grismer as executive vice president and cfo, effective February 1, 2021. Ruggeri will report to Kevin Johnson, Starbucks president and chief executive officer. Grismer will remain with the company as an advisor to Johnson through May 2, 2021, to ensure a smooth transition.

“I want to thank Pat for his leadership and his many contributions to Starbucks through this period of unprecedented change and transformative growth. He has played an important role helping the company deliver on our Growth at Scale agenda while building a strong finance team with deep expertise, and I remain as confident as ever in the future of Starbucks,” said Johnson. “On behalf of the Board of Directors and all Starbucks partners, I want to wish Pat all the best as he enters the next chapter of his life.”

“It has been an honor to be a Starbucks partner, and I am proud of the significant progress we have made to drive our growth strategy and unlock considerable shareholder value over the past two years,” said Grismer. “I believe Starbucks is operating from a position of strength, with a long runway of profitable growth ahead. Rachel has long been a key member of our senior finance team, and I am confident that her experience and strong leadership capabilities will help to ensure that Starbucks continues to drive improved operating performance and disciplined execution of our Growth at Scale agenda.”

“It gives me great confidence to know that Rachel, a long-time Starbucks colleague and a seasoned financial executive, is stepping into this role,” said Johnson. “Not only does she have a comprehensive understanding of the food, beverage and retail industry and deep knowledge of our business, she is also passionate about the Starbucks brand and is highly respected by her colleagues across the organization. I look forward to working closely with Rachel in her new role to further fuel Starbucks success and drive value for all of our stakeholders by continuing to deliver consistent and predictable sales growth and margin expansion while investing in key strategic initiatives to ensure we even further differentiate Starbucks position over time.”

Ruggeri has 28 years of experience in accounting, financial planning and analysis, and business process improvement. Working closely with Grismer as senior vice president of Finance, Americas, Ruggeri is highly respected by partners across the global enterprise, leading all aspects of business planning and financial performance management, with a specific focus on creating synergy and leveraging best practices across the broader organization. She first joined Starbucks in 2001 as a member of the accounting team, where, in her first year, she helped to launch the first Starbucks Card, now the foundation of Starbucks industry-leading digital engagement platform and a significant growth driver for the company.

During her tenure at Starbucks, Ruggeri has held a variety of finance positions of increasing responsibility, including vice president of Corporate Financial Planning and Analysis, vice president of Finance in support of the U.S. Business, and senior vice president of Finance for Global Retail. In addition to her time at Starbucks, Ruggeri has held several financial leadership roles supporting social service organizations, and also within the food and beverage industry, including serving as Continental Mills’ chief financial officer.

Ruggeri holds a Bachelor of Arts degree from the University of Puget Sound and a Master of Business Administration degree from Washington State University.

Guidance for Fiscal 2021

Starbucks is reaffirming its guidance for Q1 and the full year fiscal 2021 that was previously provided on October 29, 2020 and December 16, 2020. “Our overall business momentum remains positive, providing confidence that Starbucks will deliver financial results in line with our previous guidance,” said Grismer. “Through rapid innovation and organizational agility, we have built a new level of resilience and accelerated the transformation of our business to drive our recovery and establish a strong foundation for continued profitable growth.”

About Starbucks

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high-quality arabica coffee. Today, with nearly 33,000 stores worldwide, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at http://news.starbucks.com or www.starbucks.com.

Forward-Looking Statements

Certain statements contained herein and in this press release are “forward-looking” statements within the meaning of the applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as “believe,” “continue,” “could,” “expect,” “may,” “predict,” “remain,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements include statements relating to: the estimated financial impact related to the outbreak of coronavirus disease (COVID-19) including the outlook, guidance and projections for fiscal 2021 guidance; our ability to continue steady business improvement and recovery; and our ability to emerge from this global crisis and drive long-term growth. These forward-looking statements do not represent historical data, are based on currently available operating, financial and competitive information and are subject to a number of significant risks and uncertainties. Actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, the risks detailed in the company filings with the Securities and Exchange Commission, including the “Risk Factors” sections of Starbucks Annual Report on Form 10-K for the fiscal year ended September 27, 2020. The company assumes no obligation to update any of these forward-looking statements.

Starbucks Contact, Investor Relations:

Durga Doraisamy

206-318-7118

investorrelations@starbucks.com

Starbucks Contact, Media:

Reggie Borges

206-318-7100

press@starbucks.com

# # #