February 1, 2019

Howard Schultz and Employee Ownership

Executive Director

In other presidential news, Howard Schultz, the founder and former CEO of Starbucks, has gotten a lot of media attention for his possible run as an independent for President. Schultz was an early proponent of employee ownership. When Starbucks did its IPO in 1992, investment bankers opposed Schultz's insistence of giving stock options with a face value of 10% of pay to all employees, including part-timers, who worked for six months or more. Starbucks asked us for data to support the idea that board-based ownership worked, and that may have helped mollify the bankers. Starbucks' "Bean Stock" program now uses restricted stock units. The units vest over two years at 50% per year. Grants are awarded to all employees annually. Since inception, the program has awarded over $1.2 billion in shares to employees.