Starbucks presents a unique challenge to activist firm Elliott Management because former CEO Howard Schultz still has influence.
Activist Elliott Management offered a settlement with Starbucks that would allow CEO Laxman Narasimhan to keep his position.CEO of Starbucks Howard Schultz back stage with soon to be Starbucks CEO Laxman Narasimhan at Starbucks Headquarters during Investor Day in Seattle, Washington Tuesday September 13, 2022.
A Starbucks spokesperson declined to comment on whether Schultz, who has a close relationship with Hobson and other Starbucks directors, had attended board meetings where Elliott's settlement offer was discussed. Schultz, meanwhile, has been unusually vocal in his criticism of the company's direction under the leadership of Narasimhan, his hand-picked successor, who has leaned on discounting and new product launches to try and revive the business since taking over in March 2023. Schultz hasn't said why he opposes Elliott's offer, andStarbucks has faced successive quarters of falling sales, with steep declines in China and weakness in the core U.S. business.
Both have described their relationship warmly over the years. They were connected by former Senator Bill Bradley of New Jersey in 2005. Schultz, then a director at DreamWorks Animation, would later introduce Hobson to co-founder Jeffrey Katzenberg, who told Fortune it took five seconds for him to realize he wanted her on that board as well.
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