Starbucks Poaches Chipotle CEO Brian Niccol Amid Activist Pressure
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Key TakeawaysStarbucks shares surged Tuesday after announcing the hiring of Chipotle CEO Brian Niccol to replace Laxman Narasimhan.Niccol will take the Starbucks job Sept. 9, and Chipotle COO Scott Boatwright will take over as interim CEO once Niccol departs.The move comes as Starbucks has faced pressure from activist investors Elliott Investment Management and Starboard Value, who reportedly had bought stakes and advocated for change.
Starbucks (SBUX) shares jumped over 22% in early trading Tuesday after the coffee giant announced the hiring of Chipotle Mexican Grill (CMG) Chief Executive Officer (CEO) Brian Niccol as its new CEO, replacing Laxman Narasimhan, who is departing immediately.Niccol will assume the job starting Sept. 9, with Starbucks Chief Financial Officer (CFO) Rachel Ruggeri set to take the interim CEO title for the next month. Meanwhile, Chipotle has selected Chief Operating Officer (COO) Scott Boatwright to serve as its interim CEO once Niccol leaves his position at the end of the month.CEO Shakeup Comes Amid Recent Activist PressureStarbucks has faced pressure to make changes in recent weeks as reports have emerged that a pair of activist investors, Elliott Investment Management and Starboard Value, have bought stakes in the coffee chain.The funds haven't publicly stated their goals, but reports have indicated that Starbucks has engaged with Elliott on ideas to boost the company's sales and stock. Starbucks' recent earnings reports have disappointed, with same-store sales declining as consumers pull back on discretionary spending.Starbucks shares were up 22.6% shortly after the opening bell Tuesday. Meanwhile, Chipotle shares sank close to 14% on the news, though they were still up roughly 5% since the start of the year.UPDATE—Aug. 13, 2024: This article has been updated to reflect more recent share price information. Read the original article on Investopedia.
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