Starbucks has announced a significant leadership change with the appointment of Brian Niccol, the current CEO of Chipotle, as its new chairman and CEO, effective September 9. This comes as Starbucks’ stock saw a historic surge, recording a 24.5% increase on Tuesday, while Chipotle’s stock dropped 7.5%.
Laxman Narasimhan, who was previously at the helm, has stepped down immediately from his position and the board. CFO Rachel Ruggeri will act as interim CEO until Niccol officially takes over, and Mellody Hobson, who chairs the board, will take on the role of lead independent director.
Niccol has been the CEO of Chipotle since 2018, during which time the company’s revenue nearly doubled and its profits soared nearly sevenfold, leading to an impressive 800% increase in stock price. Before joining Chipotle, he held various executive roles at Taco Bell and Pizza Hut.
The leadership change follows a recent investment by hedge fund Starboard Value, which acquired a stake in Starbucks and aims to boost its stock performance. Concurrently, Starbucks is engaged in discussions with another activist investor, Elliott Investment Management, which has been advocating for changes within the company.
Elliott is seeking representation on Starbucks’ board and could initiate a proxy battle for a board seat. Former CEO Howard Schultz remains the largest shareholder of Starbucks.
In terms of stock performance, Starbucks has rebounded after earlier losses, as shares had fallen 20% in 2024 due to declining sales, prompting the company to revise its guidance. On the other hand, Chipotle’s stock performance has weakened since a stock split that occurred on June 26, which marked a significant moment in the company’s history.