Dive Brief:
- The SOC Investment Group, an investment advisory group affiliated with the Strategic Organizing Center — a major coalition of North American trade unions — filed a shareholder proposal last week seeking to separate Starbucks’ CEO and board chair roles.
- The investor pressure came days after Starbucks Workers United called on consumers to boycott the coffee chain until it settles a contract with the union, which represents approximately 12,000 workers.
- Previous efforts by pro-labor investors to pressure Starbucks have met mixed results, and recent strikes by SBWU have not resulted in a contract. A consumer boycott, however, could slow the momentum of the chain’s multi-year turnaround plan.
Dive Insight:
The union and the coffee giant have had intermittent contract bargaining sessions since April 2024, and have made tentative agreements on a number of subjects, but have not reached a contract.
During the period of intermittent negotiation, Starbucks hired Brian Niccol as CEO and undertook a major turnaround drive, which has seen it return from significant traffic and same-store sales deficits and post some of its strongest single-day sales in North American history.
In a statement supporting its proposal, the SOC IG claimed that Starbucks abandoned several of the tentative agreements and said that under Niccol the company has seen “significant backsliding in labor relations.”
The IG also claimed that shareholder engagements with board directors have decreased, and that separating the CEO and board chair roles would increase the board’s independence. At the same time, the IG said its proposal gives the CEO a greater ability to “to focus on the Company’s day-to-day business, while increasing management accountability and improving the Board’s ability to monitor management performance.”
The proposed policy would “apply prospectively so as not to violate any contractual obligations,” according to the SOC IG.
Starbucks did not immediately respond to a request for comment.
SBWU has previously attempted to enlist consumers in pressuring the company, calling for a boycott on gift cards in 2022. The union and its allies in student organizing groups have also put pressure on major universities to cut ties with the company.
