Starbucks Faces Investor Pressure Amid Fallout From Ongoing Labor Disputes – CoffeeTalk

Starbucks is currently facing increased pressure from a coalition of investors, including various public-sector pension funds, which have urged shareholders to vote against the reelection of two directors: lead independent director Jorgen Vig Knudstorp and Beth Ford, chair of the Nominating and Corporate Governance Committee. The investors cite persistent management issues in labor relations as a key concern, particularly as Starbucks endeavors to reach a collective agreement with its unionized baristas amidst ongoing negotiations.

In late last year, more than 3,800 baristas participated in a nationwide strike, marking the longest work stoppage in the company’s history. This strike was initiated by the Starbucks Workers United union, which is advocating for improved staffing levels, more predictable scheduling, and increased pay following protracted contract discussions. This labor dispute presents a significant challenge for CEO Brian Niccol, who is striving to revitalize sales.

In a letter to shareholders ahead of the annual meeting scheduled for March 25, the coalition expressed that without a constructive relationship between Starbucks and its unionized workforce, it may be difficult to sustain a financial turnaround. Prominent signatories of the letter include New York State Comptroller Thomas DiNapoli, New York City Comptroller Mark Levine, Trillium ESG Global Equity Mutual Fund, SOC Investment Group, Merseyside Pension Fund, and the Shareholder Association for Research and Education.

In response to the investors’ concerns, Starbucks emphasized its commitment to providing competitive wages and benefits, citing that hourly partners earn an average of $30 per hour and enjoy world-class benefits, even for individuals working an average of 20 hours per week. Additionally, the investor group had previously raised concerns in January regarding the board’s decision to eliminate its Environmental, Partner, and Community Impact Committee without explanation, a move Starbucks explained involved reallocating its responsibilities across existing committees while returning primary labor oversight to the full board.

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