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Commentary: Starbucks return-to-office is another corporate double standard

NEW YORK: New Starbucks CEO Brian Niccol sent a stern warning to employees this week: Get back to the office three days a week or risk termination.

Pity the internal comms people who had to pass on that message with a straight face. The decree comes only two months after the company hired Niccol with a contract that lets him keep his main residence in Newport Beach, California, rather than relocate to Starbucks headquarters in Seattle.

Starbucks has said that Niccol will spend “a majority of his time” visiting stores or at the company’s Seattle office, despite living 1,600km away.

But while he may technically be meeting the hybrid rules, a key detail is left unsaid: He’ll be able to do it with the help of the company’s private jet and a monstrous pay package that allows him to throw money at whatever other inconveniences arise. He won’t have to worry about his remote office in Newport Beach, however; Starbucks will foot the bill for that, along with the cost of an on-site personal assistant of his choosing.

Meanwhile, Starbucks has touted that it provides subsidised transit, shuttles to public transportation, free electric-vehicle charging and bike lockers in order to entice the rank and file to get back to the office. These are nice benefits but look measly alongside Niccol’s company-funded commute by corporate jet.

The Starbucks board agreed to Niccol’s work arrangement as part of a larger deal designed to lure him away from Chipotle Mexican Grill to save the struggling coffee giant. If Niccol’s compensation package is paid out in full, he will be among the highest-paid CEOs in America.

That will likely earn Starbucks a prime perch on the list of companies with the greatest CEO-to-worker-pay ratios – the classic measurement of the disparity between CEOs and their employees. It’s a metric that has soared over the last 60 years.

According to the Economic Policy Institute, the average CEO-to-worker pay ratio at the 350 largest publicly owned US companies was about 344-to-one in 2022, the most recent year available. In other words, it would take almost 350 years for a regular employee to match what their CEO made in just a single year. In 1965, the ratio was 21-to-one.

Source: CNA

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