Human Resources | July 2014 | By Margarette Burnette

Planting the Seed

Starbucks gives back to employees through its Bean Stock program, letting workers become shareholders to fund future aspirations.
Fast food coffee giant Starbucks gives team members stock in company.
Starbucks employees, known as partners within the system, earn restricted stock units through the brand’s Bean Stock program. Starbucks
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Saving for retirement and other financial milestones is an important objective for most people, including employees in the quick-serve industry.

The biggest coffee chain in the U.S. is making it easier for its workers to reach those monetary goals. In 1991, after Seattle-based Starbucks extended comprehensive health coverage for eligible part- and full-time workers, the coffee chain began offering another generous incentive: access to its Bean Stock investment program, where workers receive an equity award in the form of restricted stock units.

Just last year, more than 125,000 employees—known as “partners” at Starbucks—were granted stock units, says Billy Vitense, director of Bean Stock at Starbucks. He says the program helps partners achieve financial dreams that otherwise may not have been within reach.

“Over $234 million in pre-tax gains went back into our partners’ pockets last year,” Vitense says. This program is in addition to other benefits the employee may receive, including 401(k) plans and health coverage, he adds.

In order to take advantage of Bean Stock’s annual award, partners must be employed by May 1 of the fiscal year, and they need to work at least 360 hours during the entire fiscal year. Even part-time employees can participate, Vitense says.

Bean Stock is available for workers below the director level. There is a two-year vesting period employees go through to receive the stock units, Vitense says, and the longer an employee stays with the company, the more stock they can accumulate.

Stock incentive programs for non-executives are unusual within the quick-serve industry, says Lori Kleiman, a human resources consultant and author of HR You Can Use!. It’s rare to see companies offering such benefits to their non-executive workers in any industry, she says. “It’s not all that common to see a stock program offered at a non-manager level, and for part-timers, it’s almost unheard of.”

Starbucks employees have shared many stories on how the incentive program has impacted their lives, Vitense says.

“Some partners will forget they have Bean Stock and will be going through a hard or financially difficult time in their lives,” he says. “Their manager will say, ‘Hey, check your Bean Stock,’ and these partners are flabbergasted when they check their balance because, as they have grown with the company, their Bean Stock has grown with the company.”

For example, Kaycee Kiesz, who started her Starbucks career as a barista in 1992 and has participated in the Bean Stock program for more than two decades, was able to use her financial gains to put 20 percent down on a home and take humanitarian trips. Kiesz, who is now a program manager in the company’s Diversity and Inclusion department, says she expects some of her portfolio to help fund her future dream wedding.

“It was instilled in me from my parents to work for a company with great benefits and a total pay package,” Kiesz says.

Other employees have gone on to donate money from their Bean Stock account to pay for kidney dialysis treatments of patients in Nepal. Another New York–based partner invested in purchasing her first car.

Incentive stock plans not only provide an extra source of funds, but they can also help employees become more financially savvy, says Jason Moser, an analyst with financial analysis firm The Motley Fool. When an employee participates in a stock plan, it can help the individual overcome initial hurdles to saving money for retirement, and offer an avenue to other financial goals, he says.

And when people hear stories about their coworkers receiving benefits, it’s easier for them to get excited about their own benefits, Moser says. “All it takes are a few success stories to help spur them to save money,” he says.

Though Bean Stock is aimed at giving a helping hand to employees, it makes good business sense for Starbucks, too, Kleiman says. “Stock programs align the employee and company goals. They allow employees to feel a sense of ownership in the company,” she says. “It provides the benefit of employee empowerment and having skin in the game.”

Moser says these incentive programs also help decrease turnover, which can account for some of the highest expenses at companies.

“If an employee is looking at another offer for employment, but they have unvested stock units that they would give up if they leave, they really have to consider the long-term drawbacks to leaving the company and leaving money on the table,” he adds.

Starbucks’ Vitense says he’s seen the power of Bean Stock, as it’s one of the reasons many employees stay at the company for the long term. While other companies have offered similar programs to their employees, many cut them when the economy took a downturn, he adds.

That’s something that isn’t likely to ever happen at Starbucks, as the Bean Stock program’s roots go back to Starbucks founder Howard Schultz’s vision when he started the company. “Success truly is best when it’s shared,” Vitense says.

Moser says stock incentive programs encourage employees to do more than just clock in; they encourage workers to perform well to help the business succeed.

“In theory, if the company is going to do well and grow, then the stock price will grow,” Moser says. “That lends itself to the bigger idea that when you give employees stock, it helps them think more like owners as opposed to just employees… Their jobs are a bit more meaningful.”