December 2, 2016: It’s the end of (another) era.
Howard Schultz, aÂ self-made billionaireÂ andÂ Starbucks’ longtime chairman and CEO, announced on Thursday that he is stepping away from his role as chief executive — for the second time in 16 years. The move is almost certain to fan speculation about a potentialÂ run for political office.
Starbucks said Thursday afternoon thatÂ Schultz will give up his CEO title and become executive chairman on April 3, 2017. Schultz said Thursday thatÂ he will focus on developing and expandingÂ Starbucks ReserveÂ Roasteries, a new strategic initiative for the coffee giant.
Schultz, 63, will cede the CEO role toÂ Kevin Johnson, the company’s president and chief operating officer.
“Starbucks consistently outperforms the retail industry because our stores, our offerings and the experiences our partners create make us a destination,” Schultz said in a statement Thursday afternoon. “As I focus on Starbucks’ next wave of retail innovation, I am delighted that Kevin Johnson â€” our current president, COO, a seven-year board member and my partner in running every facet of Starbucks business over the last two years â€” has agreed to assume the duties of Starbucks chief executive officer. This move ideally positions Starbucks to continue profitably growing our core business around the world into the future.â€
In a call with analysts, investors and journalists Thursday afternoon, Schultz attempted to make his next step perfectly clear. “I’m not leaving the company. I’m here every single day,” he said.
“I consider it a privilege to work side-by-side with Howard, our world-class board of directors, and a very talented leadership team,” soon-to-be CEO Johnson said. “Together, we will reaffirm our leadership in all things coffee, enhance the partner experience and exceed the expectations of our customers and shareholders. We believe in using our scale for good and having positive social impact in the communities we serve around the world.â€
This is not the first time Schultz has stepped away from being chief executive at Starbucks. After taking over in 1987 he steered the company through its 1992 IPO and for years afterward, before giving up the job on April 6, 2000. At the time, he said he was vacating the role in order to focus on the company’s global strategy. He took back the reins on January 8, 2008.
SchultzÂ first joined Starbucks as director of operations and marketing in 1982, when the company had just four stores (it now has more than 25,000). After falling in love with Italian coffeehouses during a 1983 trip to Italy, Schultz left Starbucks to startÂ Il Giornale, his own line of coffeehouses. But he couldn’t stay away from the Seattle-based coffee chain for long: in 1987, he returned, buying the company and becoming its CEO.
Since those early days, Schultz has grown the company into an $85 billion powerhouse, expanding into teaÂ (Teavana), offering hot food, and becomingÂ one of the food industry’sÂ pioneers in mobile ordering. Simultaneously, Schultz has spoken openly about balancing profit and benevolence, and over the years launched a number of socially-justÂ initiatives for his employees. He’s set up Starbucks cafes on military basesÂ with the aim of hiringÂ veterans and active-duty spouses; in 2014, he set up a program that gave baristas and other employees a chance to earn an online college degree from Arizona State University, with Starbucks footing the tuition bill; in July, Starbucks said that it willÂ expand healthcare coverageÂ for eligible full and part time employees by way of a private exchange.
“We’re not just here to raise the stock price,” he told FORBES in aÂ March 2016 cover story. “What can we do to use our strength for social good?” Of course, rhetorical questions like these stoke speculation that he may one day run for public office — even though he and those close to him vehemently deny that he has such designs.Â
“Howard knows himself well enough to realize that a role in national politics isn’t right for him,” Starbucks board member Mellody Hobson told FORBES in March.
Two days after the 2016 presidential election, Schultz reiterated this position.
“I have a day job,” heÂ toldÂ CNBC’s Andrew Ross Sorkin. “Iâ€™m deeply rooted in promise of America, and the aspirations of the country. Iâ€™m concerned about the future of the country. And if I can do anything as a private citizen, as I am now, to advance that cause, that’s what I am trying to do.”