Why Starbucks’ new CEO Brian Niccol is worth $85 million and the remote California office

That’s The Takeaway from today’s Morning Brief, which you can REGISTER to receive in your inbox every morning along with:

Chipotle ( CMG ) CEO Brian Niccol is a “beast.”

That’s what a former colleague from their Procter & Gamble (PG) days told me this week.

Beast Niccol will have a lot of ground to devour – and fast – in what will be the most defining role of his career. As CEO of Starbucks ( SBUX ), he will also be open to intense global scrutiny.

Get to work, and the 50-year-old could be governor of his home state of California by the time he’s 60. It fails at change and follows three decades of incredible work spanning P&G, Yum! Brands and Chipotle – not to mention the destruction on social media, TV, etc.

“Brian is a phenomenal leader,” Brinker International ( EAT ) CEO Kevin Hochman told me in Yahoo Finance’s Morning Brief. “I personally learned a lot from him. It’s one of the reasons I got into restaurants at Yum! Brands”.

Hochman has held leadership positions at Yum! KFC owned Brands while Niccol rose through the ranks at Taco Bell. The two worked together at P&G before joining Yum! Brands.

“Obviously they have an amazing pick,” added Hochman, “and he’s going to work his usual magic with Brian Niccol. And I can’t wait to see what they’ll be about.”

The risks mentioned above and the huge task of fixing Starbucks is why I think Niccol deserves every penny of his compensation package.

He gets $10 million in cash and $75 million in stock awards when he arrives at Starbucks on September 9. If certain targets are met, Niccol could earn about $117 million in total compensation in his first year.

At first, this dollar amount sounds absolutely ridiculous. And I understand that interpretation.

But Niccol isn’t a lazy, fat CEO trying to earn another big paycheck from a struggling company. This guy is in the prime of his career and has the track record to suggest he could deliver huge results for Starbucks in less than three years.

And Starbucks could use the help: The coffee chain is in the midst of several operational and cultural crises that will require all the skills Niccol learned from top leaders at P&G and Yum! Brands (both places produce the best of the best in leadership, same for PepsiCo (PEP).

Starbucks’ most recent quarter showed a 6 percent drop in transactions in North America as consumers shunned the chain’s increasingly expensive coffee and long wait times.

The story continues

International sales fell 7 percent and comparable Chinese sales fell 14 percent, prompting executives to say on the earnings call that they are exploring strategic options for the business. Non-GAAP operating profit fell to 16.7% from 17.4%.

The other driver of results is poor morale at the store level.

Starbucks management has used its heavy hand to try to kill stores that want to unionize. They keep putting stupidly complicated drinks on the menu that are nightmares for super busy baristas. And the app has become an endless customization machine, further complicating the lives of Starbucks workers.

I recently went to an airport Starbucks and it took me 12 minutes to get a plain iced coffee in the morning. I took these notes while in line: 1) two people behind the counter; 2) the drink orders were far too complex; 3) menu boards full of weird new drinks that make people look at them wondering if they want to try them.

The stores are a hot cultural mess thanks to the one-two punch of prickly billionaire Howard Schultz and his other handpicked successor, basically Kevin Johnson.

Niccol is not going to fix this overnight, in a month or even six months. What it will fix is ​​an overhauled total workers’ compensation program, better defined career advancement opportunities, and removing a lot of unnecessary crap from menu boards and the app.

Turning around the Starbucks culture could take a year or more.

Niccol is the guy to do it, though: This is a guy who has spent a good portion of his earnings calls highlighting Chipotle store dwellers who are advancing into leadership positions. This is a guy who has proven he’d rather do good to employees than beat earnings estimates by a dime. He’s the guy who split Chipotle’s stock 50-1 so more people could afford to invest in the growth story.

“It looks like they got a really good guy in Brian,” said Bill George, leadership expert and former Medtronic ( MDT ) CEO, on my Opening Bid podcast (video above or listen here ). George personally knows both Howard Schultz and ousted Starbucks CEO Laxman Narasimhan.

Niccol is the $85 million guy, I think.

Three times a week, I host insightful conversations with the biggest names in business and markets on me Opening offer podcast. Find more episodes on our website video hub. Take care of yourself your favorite streaming service. Or listen and subscribe to Apple Podcasts, Spotifyor wherever you find your favorite podcasts.

In the Opening Bid episode below, Max Levchin, co-founder of PayPal (PYPL) and founder of Affirm (AFRM), reveals his personal CEO journey.

Brian Sozzi is the executive editor of Yahoo Finance. Follow Sozzi on X @BrianSozzi and further LinkedIn. Advice on deals, mergers, activist situations or anything else? Email [email protected].

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance