The sudden change in leadership follows public criticism from former CEO Howard Schultz, who slammed Narasimhan’s management style on LinkedIn in May.
Starbucks said Tuesday it is replacing embattled CEO Laxman Narasimhan with Chipotle boss Brian Niccol — a surprise move that comes after months of slowing sales and growing heat from activist hedge funds.
Starbucks shares jumped 25% to $95.90 on the news, a record percentage increase, while Chipotle shares dropped 7.5% to $51.68.Starbucks said Tuesday it will be replacing current CEO Laxman Narasimhan with Chipotle boss Brian Niccol , according to a report.
The shakeup follows a 20% stock drop for Starbucks since Narasimhan took the reins of the company a year and a half ago, succeeding former CEO Howard Schultz.Neither of the hedge funds was notified about the CEO switch and it’s unclear whether they will continue to pressure the company. Elliott and Starboard didn’t immediately respond to requests for comment.
She said the decision to choose Niccol was made exclusively by Starbucks’ board, though Schultz was brought into the conversation about a week ago. “Having followed Brian’s leadership and transformation journey at Chipotle, I’ve long admired his leadership impact,” Schultz said of Niccol in a statement. “I believe he is the leader Starbucks needs at a pivotal moment in its history. He has my respect and full support.
Starbucks’ market value plunged under his lead – from nearly $115 billion under Schultz to about $87 billion on Tuesday.
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