Howard Schultz Steps Down as Starbucks CEO, Hands Role to Kevin Johnson

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Howard Schultz and Kevin Johnson
Howard Schultz and Kevin Johnson Credit: Starbucks
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Longtime Starbucks leader Howard Schultz is passing the role of chief executive officer to Kevin Johnson in April and will stay on in an executive chairman role, the coffee company announced Thursday.

"I'm not leaving the company. I'm here every single day," Mr. Schultz said during a conference call held Thursday afternoon to discuss the upcoming leadership change.

During his comments and answers to analysts' questions, Mr. Schultz tried to reassure Wall Street that he has no plans to leave Starbucks, but added that "Kevin and the team are in charge."

Earlier in the call, he spoke of Mr. Johnson as "my partner in running every facet" of Starbucks over the last two years. Mr. Schultz said he personally asked Mr. Johnson, a longtime technology executive, to take on the CEO role.

The transition, while in the works internally for months, appeared to disappoint investors. Shares of Starbucks fell about 3.5% in after-hours trading.

Mr. Schultz first joined Starbucks in 1982 and was CEO for the first time from 1987 to 2000. He has been chairman since 2000. He returned as CEO in January 2008, when the company brought him back to help spark growth.

He has long been a public figure for Starbucks, which went public during his first run as CEO and expanded its premium beverage lineup, technology strategy and personalized offers during his second stint. Letters from him on social issues and causes have run as full-page ads in newspapers and online as part of the company's marketing efforts. Some of those pushes, such as its #RaceTogether campaign, were met with negative feedback.

Mr. Johnson, who became president and chief operating officer of Starbucks Corp. in March 2015, will become president-CEO as of April 3, 2017. At that time, Mr. Schultz will become executive chairman, with a focus on retail innovation, speeding up the growth of the company's ultra-premium retail formats and social impact initiatives.

Mr. Schultz will continue as chairman of the company's board. Mr. Johnson has been on the board for seven years and will continue on the board in his new role.

Before he joined the Starbucks management team last year, Mr. Johnson's work included 16 years at Microsoft and five years as CEO of Juniper Networks.

Asked by an analyst on Thursday's call about the company's social impact plans, Mr. Schultz echoed some of his earlier comments on how he believes the role and responsibility of a public company has changed, citing programs Starbucks has already worked on, including hiring underprivileged youth, as well as helping veterans and their family members find jobs.

"We want to use our scale for good," Mr. Schultz said.

Starbucks is hosting an analyst meeting Dec. 7, which was scheduled well in advance of Thursday's executive announcement. During Thursday's call, Mr. Schultz said one item to be discussed at that meeting, being held in New York, would be adding a new product category at its more upscale Reserve stores.