- Former Starbucks CEO Howard Schultz looms over the company's leadership, even after stepping down.
- The coffee giant just named Brian Niccol as CEO. He comes in from Chipotle.
- Schultz has endorsed Niccol as "the leader Starbucks needs".
Starbucks' new CEO may have to contend with a former executive who hasn't fully let go of the reins.
On Tuesday, Starbucks announced that Brian Niccol, the former CEO of Chipotle, will succeed Laxman Narasimhan as CEO.
The influence of Howard Schultz, Starbucks' former CEO and chairman, still looms large and could complicate Niccol's efforts to steer the company forward.
Schultz, 70, served three stints as Starbucks' CEO, first from 1986 to 2000, then from 2008 to 2017, and again from 2022 to 2023 as interim CEO. In late 2023, he was given the title of "lifelong Chairman Emeritus" after stepping down from the board of directors.
While Schultz stepped away from Starbucks' leadership, he has continued to publicly address what he sees as the company's issues. In May, Schultz addressed a two-page letter to the company's leadership, urging the executive team to address Starbucks' systemic challenges. He posted that and similar missives on LinkedIn.
Schultz has also frequently voiced his grievances to the company's leadership about issues such as Starbucks' market performance and its promotional campaigns, an unnamed source told Bloomberg.
With Niccol taking the reins, Wall Street analysts are optimistic — not just about Starbucks' direction, but also about the prospect of the company moving away from Schultz's influence as "a backseat driver," Don Bilson, an analyst at Gordon Haskett, told CNBC.
Niccols' tenure at Chipotle could serve as the blueprint to move Starbucks in a new direction, wrote Danilo Gargiulo, an analyst at Bernstein, in a note.
In 2018, Niccol took over founder-led Chipotle. As CEO, he relocated the company's headquarters, enhanced food safety measures, and boosted the restaurant's online presence during the pandemic.
Niccol's prior experience in restaurant operations is a "positive change," wrote analysts from Jefferies in a note on Wednesday. "Mr Niccol has strong retail operations experience that Mr. Narasimhan, with his CPG background, lacked."
In Starbucks' press release, Schultz endorsed Niccol as "the leader Starbucks needs at a pivotal moment in its history" while avoiding any mention of Narasimhan. His 17-month tenure was plagued by declining sales, union clashes, and boycotts over conflicts in the Middle East.