Starbucks Corp. has explained to investors why their CEO Howard Schultz received a salary of $12 million in FY 2009. The company, in a filing made to the Securities and Exchange Commission, also addressed a $1 million discretionary bonus given to Schultz by the board after he was left out of the company's usual annual bonus plan.
According to a story in the Seattle Times, Schultz's pay boost confused investors and some shareholders given that Starbucks has closed hundreds of stores and reduced its work force by 19 percent.
In its explanation, Starbucks said that when the board asked Schultz to return as CEO in January 2008, he did not take part in its bonus plan, but instead was given a base salary and stock options. The options accounted for $9.5 million, or about 79 percent of his total compensation.
From the story:
In early 2009, Schultz asked that his annual salary be reduced from $1.19 million to $6,900, but that was part way through the fiscal year, so his salary for the year actually came to $643,954. His salary has been raised to $1.3 million for fiscal 2010.Schultz greatly exceeded the board's expectations, the filing said. "He drove the Company to achieve strong financial results for the year despite the extraordinary challenges facing the Company in a period of unprecedented global financial turmoil, and made significant progress in transforming Starbucks and returning the Company to sustainable, profitable growth while preserving its values and guiding principles."
