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Starbucks' ex-CEO Schultz opposes potential settlement with Elliott, FT reports

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July 26, 2024 4:57 PM EDT

FILE PHOTO: Former Starbucks Chief Executive Officer Howard Schultz testifies at a Senate Health, Education, Labor, and Pensions Committee hearing about the company's compliance with labor law on Capitol Hill in Washington., U.S., March 29, 2023. REUTERS/

(Reuters) -Former Starbucks chief executive, Howard Schultz, is opposing a potential settlement between the coffee chain and activist investor Elliott Investment Management, the Financial Times reported on Friday.

Schultz, who is the sixth largest shareholder with a $2.03 billion stake in the company, according to LSEG data made his opposition to an Elliott settlement known to some board members, the report said, citing people familiar with the matter.

Elliott has built a sizable position in Starbucks and has been discussing ways of improving the coffee chain's stock performance, two sources familiar with the matter told Reuters last week.

Starbucks declined to comment on the report, while Schultz and Elliott did not immediately respond to Reuters' requests for comment.

The former CEO had stepped down from the company's board last year after helping it transform into a coffee behemoth that made venti cappuccinos a global phenomenon.

During his 41-year association, Schultz played a crucial role in taking Starbucks from a small company selling only whole beans to a global coffeehouse chain with more than 36,000 stores in 86 markets. He stepped down as CEO in 2023 after he returned to the helm for a third time.

Following Starbucks' disappointing quarterly earnings results in April, Schultz took to LinkedIn and wrote that the coffee chain must overhaul its U.S. operations.

Elliott, which has won board seats at Etsy, Phillips 66 and Match in the first half of 2024, is currently pushing for changes at Southwest Airlines.

The hedge fund, managing $65.5 billion in assets as of December, also launched campaigns at Texas Instruments and Johnson Controls earlier this year.

Shares of Starbucks, which are down nearly 23% this year, were up marginally in extended trading on Friday.

(Reporting by Granth Vanaik in Bengaluru; Additional reporting by Jaspreet Singh; Editing by Alan Barona)


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