Starbucks Corp. (NASDAQ:SBUX) has appointed Brian Niccol, the CEO of Chipotle Mexican Grill Inc. (NYSE:CMG), as its new CEO and chairman, replacing Laxman Narasimhan. Niccol will begin his new role on September 9, 2024. In the interim, the current CFO of Starbucks will lead the company. Following the announcement, Starbucks shares surged a record 23% in New York trading, while Chipotle’s stock dropped by up to 13%.
Leadership Change and Market Reactions
This sudden leadership change follows reported stakes in Starbucks by activist investors Elliott Investment Management and Starboard Value. The coffee chain’s shares had fallen 20% this year due to two consecutive quarters of declining comparable sales. Board chair Mellody Hobson indicated that the discussions about leadership were initiated several months ago, downplaying the influence of Elliott Investment Management on the decision.
Despite Elliott’s support for Niccol’s appointment, Hobson emphasized that the board is taking full responsibility for the company’s performance and aims to quickly address business weaknesses. Former CEO Howard Schultz, although not formally involved with the company, endorsed the decision, calling Niccol’s appointment a “home run.”
Brian Niccol, who joined Chipotle in 2018, played a pivotal role in the company’s recovery from food safety controversies and activist pressure. Chipotle’s stock has increased by more than 20% this year, showcasing strong performance under Brian Niccol’s leadership. Scott Boatwright, Chipotle’s COO, will serve as interim CEO, while CFO Jack Hartung, who planned to retire in 2025, will now stay with the company indefinitely as president of strategy, finance, and supply chain.
Featured Image: Megapixl
Author Faith Yakubu 
