The global coffee giant, Starbucks, on Tuesday (August 13) announced a major shift in the leadership position. In the latest development, Laxman Narasimhan, who had been at the helm for just over a year, is stepping down as CEO and Chairman of the company and Brian Niccol, the CEO of Chipotle Mexican Grill will be taking Narasimhan’s place.
Moreover, the sudden departure of Narasimhan has also raised many eyebrows, particularly because it comes at a time when the company is under pressure from activist investors like Elliott Investment Management.
Who is Brian Niccol?
The CEO of Chipotle Mexican Grill, Brian Niccol, is a man known for turning around the fortunes of fast-food chains and will be taking the charge of Starbucks after Narasimhan step down.
He will officially assume his new role on September 9, 2024.
Share performance of Starbucks |
As the company gears up for this transition, the stock market already made waves to the recent development of the appointment and the change, with Starbucks shares jumping 15 per cent in premarket trading, signaling investor optimism about his leadership.
While Starbucks shares surged on the news of Niccol’s appointment, Chipotle’s stock took an 8.3 per cent hit.
chipotle stock |
Interim Leadership and Market Reaction
Until Niccol steps in, Starbucks’ Chief Financial Officer, Rachel Ruggeri, will serve as interim CEO. Meanwhile, over at Chipotle, Scott Boatwright, the current Chief Operating Officer, will take over as interim CEO.
Why the Change?
The leadership shakeup at Starbucks comes amid a challenging year for the company.
With sales declining for two consecutive quarters and its stock price plunging by 20 per cent this year, Starbucks has faced increasing pressure from activist investors to make changes at the top.
Elliott Investment Management, in particular, has been pushing the company to improve its performance and stock price.
