The new CEO of Starbucks, Brian Niccol, is facing some controversy, but it’s not about coffee. According to The New York Times, Niccol will be using Starbucks’s corporate jet to commute from his home in Newport Beach, California, to the company’s Seattle headquarters. This 1,000-mile journey is detailed in his offer letter and contract, which have been filed with the Securities and Exchange Commission.
Denis Sosyura, a finance professor at Arizona State University who specializes in corporate governance, explained to the Times that remote work for CEOs can be a useful strategy to attract high-caliber candidates who may not be willing to relocate. “If you have a CEO who prefers living in Southern California, it’s challenging to convince them to move,” Sosyura said.
According to the contract, Niccol is not required to permanently relocate to Seattle, but he must secure secondary housing in the city within three months of starting his role. Starbucks’s current policy requires corporate employees to work from the office at least three days a week.
Such extensive commuting, known as “super-commuting,” is not unusual for top executives. A study by Sosyura and Boston College professor Ran Duchin conducted before the pandemic revealed that over 17 percent of public companies had a remote CEO at some point. For example, Charles Scharf managed Wells Fargo from New York despite the bank’s headquarters being in San Francisco, and Dave Calhoun of Boeing used a private plane for his commutes.
However, this practice is met with criticism, particularly at companies like Starbucks, which requires most of its employees to commute to headquarters during the week and positions itself as committed to sustainability.
Duchin pointed out that modern consumers are increasingly attentive to these issues. “Consumers care more about these aspects than they used to. When you buy a product, you’re also buying into its narrative,” he told The New York Times. “This raises questions about a company’s stance on sustainability.”
Despite the backlash over Niccol’s commuting arrangement, his appointment has had a positive impact on Starbucks’s stock performance. The company’s stock surged 25 percent following the announcement of his hire, adding $20 million to its market value. Niccol will undoubtedly be benefiting from all the coffee available during his frequent flights between Newport Beach and Seattle in the coming months.
