Starbucks ex-CEO Schultz opposes settlement with Elliott Investment

Starbucks settlement: Howard Schultz, the former CEO of Starbucks and its sixth-largest shareholder, is against a potential settlement between the coffee giant and activist investor Elliott Investment Management, according to the Financial Times. Schultz, holding a $2.03 billion stake, voiced his concerns to some board members, sources familiar with the matter revealed.

Elliott, which has acquired a significant stake in Starbucks, has been engaging in discussions to boost the company’s stock performance, Reuters reported. Neither Starbucks nor Schultz and Elliott provided immediate comments on the matter.

Schultz’s Starbucks era

Schultz, who departed from Starbucks' board last year, was an important part in transforming the company from a small business selling whole beans into a global coffeehouse chain with over 36,000 stores in 86 markets. He stepped down as CEO in 2023 after a third tenure at the helm.

After a disappointing quarterly earnings report in April, Schultz urged an overhaul of the US operations in a LinkedIn post. 

Elliott, managing $65.5 billion in assets, has previously secured board seats at companies like Etsy, Phillips 66, and Match Group and is currently advocating for changes at Southwest Airlines. It has also initiated campaigns at Texas Instruments and Johnson Controls this year.

Despite a nearly 23 per cent decline in Starbucks' shares this year, the stock saw a slight uptick in after-hours trading on Friday.

(With Reuters Inputs)