Starbucks has named former Pepsi executive Laxman Narasimhan its new CEO.
Narasimhan currently works as chief executive of Reckitt Benckiser Group, the parent of Lysol, Air Wick, and other retail brands. He's been with the company since 2019. Previously, he served in multiple senior roles at PepsiCo, including global chief commercial officer and CEO of Latin America, Europe, and Sub-Saharan Africa. He also worked as director of consulting firm McKinsey & Company for nearly 20 years. Narasimhan is also a board director for Verizon and The Brookings Institution, a research group.
The incoming leader will enter Starbucks in October and assume the top position in April. During his employment, he will receive an initial base salary of $1.3 million, an annual incentive opportunity equal to 200 percent of that base salary, and will be eligible to receive annual equity awards worth $13.6 million. When Narasimhan begins his tenure in October, he will get a $1.6 million signing bonus and an equity grant worth $9.25 million.
“Laxman is an inspiring leader," Mellody Hobson, board of directors chair, said in a statement. "His deep, hands-on experience driving strategic transformations at global consumer-facing businesses makes him the ideal choice to accelerate Starbucks growth and capture the opportunities ahead of us. His understanding of our culture and values, coupled with his expertise as a brand builder, innovation champion, and operational leader will be true differentiators as we position Starbucks for the next 50 years, generating value for all our stakeholders. On behalf of the entire Board, I am thrilled to welcome Laxman as Starbucks next ceo."
Starbucks' search began this spring when former CEO Kevin Johnson retired in April. Founder and former leader Howard Schultz was appointed interim CEO. Since then, the coffee chain has made multiple switches to its C-suite. Rossann Williams, who led North America business, left after more than 17 years. The chief human resources officer, executive vice president of public affairs, general counsel, and senior vice president of public policy have all reportedly left the team, as well. Earlier in August, it was revealed that COO John Culver will step down in October and that his position will be eliminated.
The change is part of what founder and interim CEO Howard Schultz calls the "reinvention plan." The executive feels as if though Starbucks isn't built for today's consumer and must make conscious efforts to reconnect with guests and re-envision the chain's mission statement.
Schultz will remain as interim CEO until Narasimhan takes over. During this period, the Pepsi veteran will be "fully immersed in the company," and spend time learning culture and the reinvention plan. Narasimhan will visit stores, manufacturing plants and coffee farms, and connect with employees across the world. After Schultz's interim tag comes off, he will remain a member of the board of directors.
“When I learned about Laxman’s desire to relocate, it became apparent that he is the right leader to take Starbucks into its next chapter," Schultz said in a statement. "He is uniquely positioned to shape this work and lead the company forward with his partner-centered approach and demonstrated track record of building capabilities and driving growth in both mature and emerging markets. As I have had the opportunity to get to know him, it has become clear that he shares our passion of investing in humanity and in our commitment to our partners, customers, and communities. The perspectives he brings will be a strong asset as we build on our heritage in this new era of greater well-being. I greatly look forward to our partnership over the coming months and years."
Narasimhan holds a mechanical engineering degree from University of Pune, India. He also has a Master of Arts degree in German and international studies from the University of Pennsylvania and an MBA in finance from The Wharton School of the University of Pennsylvania.