Howard Schultz the billionaire will not get a salary raise at Starbucks (NASDAQ:SBUX) this year. Why is this news? The memo gets leaked and then there is a section in it that catches my eye. All U.S. vice presidents and above, including Howard Schultz and the senior leadership team, will receive no salary increases this year.
From the memo:
Based on Starbucks year-to-date performance, we are not currently on track to reach the requisite financial targets for the General Management Incentive Plan [GMIP]. When we announce FY08 results in November, GMIP participants will learn more about the status of bonus payouts.
All U.S. vice presidents and above, including Howard Schultz and the senior leadership team, will receive no salary increases this year.
What status? If you are not on track to meet the targets, there ought to be nothing, correct? Or, are we going to play the Circuit City (NYSE:CC) game of lowering the target and give them a bonus in lieu or a "raise next year"? Or, are we going to lower targets and increase incentives for next year so it all comes out in the wash? That statement was just way too ambiguous for me.
I am going to watch this. Think about it. How far has the brand fallen when corporate actions can be looked at in the same vein as those at Circuit City?
View full memo