Starbucks Corp. founder Howard Schultz halted a share-buyback programme to commemorate the start of his new term as CEO, claiming that the money would be better spent on stores and employees.
The 68-year-old announced his decision in a letter to the coffee chain’s employees, according to a statement released by the Seattle-based company on Monday. He claims that it is “the only method to create long-term benefit for all stakeholders.”
Starbucks said in October that it would spend $20 billion on dividends and stock buybacks over the next three years, a move that has now been partially reversed. Schultz’s comeback, which was announced last month, comes at a difficult moment for the global coffee company, which is dealing with a growing unionisation push at outlets across the United States and a resurgent Covid-19 virus in China’s crucial growth region.
The stock has dropped 22% this year, putting the corporation at $105 billion as of Friday. Starbucks stock was down 4.2 percent in New York trading as of 9:38 a.m. on Monday.
Kevin Johnson, who has led the company since 2017, will hand over the reins to the creator. While Starbucks searches for a permanent CEO, Schultz is functioning as an interim CEO. He’ll return to the board and oversee day-to-day operations, as well as assist in the search for a new CEO, which the business hopes to finish by the end of the year.