Starbucks Corporation · NASDAQ:SBUX
Starbucks — Proxy Contest (February 2019)
27 slides from Starbucks's proxy contest presentation, Feb 11, 2019
Slide 1: Shareholder Engagement
Starbucks Signing Store / Washington, D.C. Shareholder Engagement Strategic Priorities | Executive Compensation | Corporate Governance | Global Social Impact February 8, 2019
Slide 2: Forward-Looking Statements
Certain statements contained herein are “forward-looking statements” within the meaning of the applicable securities laws and regulations, including financial targets. Generally, these statements can be identified by the use of words such as “anticipate,” “expect,” “believe,” “could,” “estimate,” “f
Slide 3: Table of Contents
Table of Contents Strategic Priorities and Financial Guidance Executive Compensation Corporate Governance Global Social Impact Board Recommendations 4 8 14 19 22
Slide 4: Strategic Priorities and Financial Guidance
West Seattle / Seattle, WA Strategic Priorities and Financial Guidance
Slide 5: Growth at Scale . . . with Focus and Discipline
Growth at Scale . . . with Focus and Discipline BUILD THE BRAND STREAMLINE THREE STRATEGIC PRIORITIES ACCELERATE CHINA AND U.S. EXPAND GLOBAL REACH INCREASE RETURNS
Slide 6: Q1 Fiscal 2019 Global Results Reinforce Confidence in Strategy
Q1 Fiscal 2019 Global Results Reinforce Confidence in Strategy 9% Panamericana Sur, Peru Yitian West Street, Yangshuo, China Lake Forest, Chicago 4% $0.61 GAAP $0.75 Non-GAAP 7% NET NEW STORE GROWTH (last 12 months) COMP GROWTH NET REVENUE GROWTH (GAAP) EPS(1) (1) Please refer to the reconciliation
Slide 7: Fiscal 2019 Global Financial Guidance
Fresh Meadows, NY Fiscal 2019 Global Financial Guidance 5% - 7%, includes ~2% net negative impact related to Streamline-driven activities 3% - 4% $2.32 - $2.37 GAAP $2.68 - $2.73 Non-GAAP ~7% (1) Please refer to the reconciliation of GAAP and Non-GAAP EPS beginning on slide 25. NET NEW STORE GROWTH
Slide 8: Executive Compensation
Executive Compensation
Slide 9: Fiscal 2018 Pay-for-Performance
Fiscal 2018 Pay-for-Performance Starbucks executive compensation program reflects strong pay-for-performance alignment tied to overall company results, with the vast majority of pay structured as variable and “at-risk.” (1) Excluding our former executive chairman, Howard Schultz, whose compensation
Slide 10: Fiscal 2018 Pay-for-Performance Incentive Plans
Fiscal 2018 Long-Term Incentive Plan Fiscal 2018 Short-Term Incentive Plan Fiscal 2018 Pay-for-Performance The following generally describes the performance measures applicable to our fiscal 2018 short-term and long-term incentives: Performance RSUs (60%) Number of shares earned dependent upon achie
Slide 11: Fiscal 2018 Financial Results Under Incentive Plans
Fiscal 2018 Financial Results Under Incentive Plans In line with our emphasis on pay-for-performance against rigorous internal goals, compensation awarded to our NEOs for fiscal 2018 reflected the following financial results: (1) These financial performance metrics were used in determining (i) payou
Slide 12: Fiscal 2019 Incentive Plan Design Considerations
Retention of top talent following multiple years of below target realizable pay Formulaic incentive plan design that did not incorporate individual contributions that drive shareholder value Fiscal 2019 Incentive Plan Design Following fiscal 2018, the Compensation Committee approved modifications to
Slide 13: Fiscal 2019 Incentive Plan Design
Fiscal 2019 Incentive Plan Design Annual Incentive Bonus Plan Long-Term Incentive Plan Base ($) X Target Annual Incentive Opportunity (%) X + Operating Income (weighted 60%) Net Revenue (weighted 40%) Current Design Current Design FY19 Design Base ($) X X Target Annual Incentive Opportunity (%) + Op
Slide 14: Corporate Governance
Chinook Kiosk, Calgary, Canada Corporate Governance
Slide 15: Fiscal 2018 Corporate Governance Highlights
Fiscal 2018 Corporate Governance Highlights Full Board Meetings 9 Frequency of Board Elections Annual Board Evaluations Annually Director Equity Grants Yes Mandatory Retirement Age 75 Independent Director Nominees 8 of 10
Slide 16: Independent, Diverse and Experienced Board of Directors
Independent, Diverse and Experienced Board of Directors Rosalind G. Brewer * Mary N. Dillon Mellody Hobson (Independent Vice Chair) Kevin R. Johnson* Jørgen Vig Knudstorp Satya Nadella Joshua Cooper Ramo Clara Shih Javier G. Teruel Myron E. Ullman, III (Independent Chair) Director Tenure: AVERAGE DI
Slide 17: Board Matrix
Board Matrix Starbucks has best-in-class directors, with a variety of complementary skills necessary to guide and oversee the company’s strategy. INDUSTRY EXPERIENCE FINANCIAL/ CAPITAL ALLOCATION EXPERIENCE GENDER, ETHNIC OR NATIONAL DIVERSITY BRAND MARKETING EXPERIENCE INTERNATIONAL OPERATIONS & DI
Slide 18: Board Oversight of Company Strategy
Board Oversight of Company Strategy Oversight is conducted through: At least one Board meeting each year dedicated to intensive review of strategy On-going Board and Committee level discussions In between Board meetings: Periodic updates to the Board Direct conversations between management and Chair
Slide 19: Global Social Impact
Global Social Impact Costa Rica For more information regarding our Global Social Impact efforts, please visit: https://www.starbucks.com/responsibility
Slide 20: Global Social Impact Highlights
Strengthen Communities Create Opportunities Global Social Impact Highlights Hire 25,000 Veterans and Military Spouses by 2025 To date, we have hired over 21,000 veterans and military spouses. Employ 10,000 Refugees Globally by 2022 Employ 100,000 Opportunity Youth by 2020 To date, we have hired over
Slide 21: Sustainability Program Highlights
RECENT PROGRAM HIGHLIGHTS: NextGen Cup Challenge – Announced commitment to invest $10M in a recyclable and compostable cup with Closed Loop Partners Strawless Lids – Innovative strawless lids and alternative materials to eliminate plastic straws globally by 2020 Greener Stores – Announced new Greene
Slide 22: Board Recommendations
Board Recommendations Capitol Hill / Seattle, WA
Slide 23: Proxy Voting Recommendations
Proxy Voting Recommendations For each director nominee Election of 10 directors Proposal Recommendation For For Against Against Report on Sustainable Packaging Advisory resolution to approve our executive officer compensation Ratification of selection of Deloitte & Touche LLP as our independent regi
Slide 24: Honolulu, HI
Honolulu, HI
Slide 25: Fiscal 2019 Non-GAAP Measures
Fiscal 2019 Non-GAAP Measures In addition to the GAAP results provided in this presentation, the company provides certain non-GAAP financial measures that are not in accordance with, or alternatives for, generally accepted accounting principles in the United States. Our non-GAAP financial measure of
Slide 26: First Quarter of Fiscal 2019 Reconciliation of GAAP to Non-GAAP EPS
First Quarter of Fiscal 2019 Reconciliation of GAAP to Non-GAAP EPS Non-GAAP net earnings per share may have limitations as an analytical tool. This measure should not be considered in isolation or as a substitute for analysis of the company’s results as reported under GAAP. Other companies may calc
Slide 27: Fiscal 2019 Projected Reconciliation of GAAP to Non-GAAP EPS
Fiscal 2019 Projected Reconciliation of GAAP to Non-GAAP EPS Non-GAAP net earnings per share may have limitations as an analytical tool. This measure should not be considered in isolation or as a substitute for analysis of the company’s results as reported under GAAP. Other companies may calculate t