Starbuck Compensation

Starbuck Company Overview

The Starbucks Corporation was founded in year 1971, with its headquarters in Seattle, USA. Coffee was first introduced by three individuals intent on selling coffee beans and equipment. The major expansion of the company started when Howard Schultz joined the company in 1982 and turned the company into becoming an international brand on a worldwide scale. He ventured worldwide and placed Starbucks in almost every location now worldwide. It took over two decades to become well known for its world premium coffee and coffee retailer. In addition to its premium coffee, Starbuck coffee shops offer fresh brewed coffee, tea, a variety of pastries, coffee accessories, coffee mugs, as well as roasted beans. Starbucks markets its coffee through grocery stores and a specialty sales group.

In year 2000, Schultz left the company and Orin Smith was the CEO. Schultz assumed the newly -created role of chief global strategist in addition to continuing to hold the position of chairman. In 2002, Jim Donald was a CEO, under Donald the goal was expanded mores coffee store in US and outside US. The fast expansion in the number of its outlets created serious problem for Starbuck. Starbucks has started to lose focus on customer relations, the customers were complaining of falling service quality level. Starbuck stores came shrinking demand, because of increased competition from McDonald's and Dunkin's Donuts. The company sales were starting to suffer as a result as many people started to find the outlet everywhere and it become somewhat of "just another coffee place". At the same time, Starbuck has also suffered from rising costs of storefront space and wholesale prices for coffee and dairy products.

Beginning 2005, the chain lost 29 percents of its stock price. The shares fell 42 percent last year amid investor concern that the company was adding new stores too quickly. Starbucks' long-term goal is to have 40,000 locations worldwide, which cannibalized older locations and hurt profit margins (Seatllepi.com). Starbucks same-store sales slowed in 2007 causing the company's stock price to be cut in half, and on January 7, 2008, Donald stepped down as President and CEO. Howard Schultz, Chairman and Founder was asked to return to the position of CEO.

Howard Schultz in 2008, he announced series of changes as part of Starbuck's Turnaround plan. He announced that some 600 underperforming stores would be shut down and additional 100 stores oversea are closing. In year 2009, Starbuck announced the close down another 300 underperforming stores and cut nearly 7,000 workers as it continues to stagger from overexpansion and sales slowdown. Also one of Howard's strategy was to revise executive compensation as discussed in the following paragraph.

Starbuck Compensation 2004-2006

Starbucks believes