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SEATTLE - Starbucks Corp (NASDAQ:SBUX), the $131.1 billion market cap coffee giant trading near its 52-week high of $117.46, announced today the appointment of Cathy R. Smith as its new Executive Vice President and Chief Financial Officer. Smith will assume her new role at the multinational coffeehouse chain, which generated $36.1 billion in revenue over the last twelve months, on a date yet to be determined. According to InvestingPro analysis, Starbucks currently trades at premium valuations with a P/E ratio of 36.9x.
With a rich career history, Smith, 61, brings extensive financial expertise to Starbucks, having served as CFO at several major corporations, including Nordstrom (NYSE:JWN), Bright Health Group, and Target Corporation (NYSE:TGT). Her experience spans across various industries, from retail to healthcare, and includes executive roles at Walmart (NYSE:WMT) International, GameStop (NYSE:GME), and Raytheon (NYSE:RTN). She joins Starbucks at a time when InvestingPro data shows the company maintaining strong financial health with an overall "GOOD" rating, despite operating with moderate debt levels. Discover 15+ additional exclusive insights about Starbucks with an InvestingPro subscription.
As Starbucks’ new CFO, Smith will receive an initial annual base salary of $925,000 and an annual cash incentive with a target of 125% of her base salary, pro-rated for the fiscal year 2025. To compensate for the approximately $15 million in cash incentives and equity awards forfeited by leaving her previous employer, Smith will be granted a $5 million signing bonus and a replacement equity grant valued at $6.4 million. Additionally, she will receive a fiscal year 2025 annual equity award with a target value of $4.5 million, aligning with the compensation of the previous CFO.
The replacement equity grant and the annual equity award will be a mix of performance-based and time-based restricted stock units, with vesting continuing even if Smith’s employment is terminated by Starbucks without cause.
Smith’s appointment follows the departure of Rachel Ruggeri from the CFO role. Ruggeri’s separation is consistent with the "without cause" provisions of Starbucks’ Executive Severance and Change in Control Plan, ensuring she receives all plan benefits.
Starbucks has not disclosed any arrangements or understandings between Smith and any other persons related to her appointment, nor does she have any family relationships with current directors or executive officers at the company.
The information in this article is based on a press release statement from Starbucks Corporation filed with the Securities and Exchange Commission. For comprehensive analysis and detailed insights about Starbucks’ financial health, valuation metrics, and growth prospects, access the full Pro Research Report available exclusively on InvestingPro, covering what really matters for informed investment decisions.
In other recent news, Starbucks Corporation reported its fourth-quarter earnings for 2024, exceeding analysts’ expectations with an earnings per share (EPS) of $0.69, slightly above the forecasted $0.68. The company also reported revenue of $9.4 billion, surpassing the anticipated $9.35 billion. This follows Starbucks’ announcement to cut 1,100 corporate positions as part of its strategy to boost operational efficiency. Additionally, the company plans to expand its presence in the Middle East by opening approximately 500 new stores over the next five years, creating around 5,000 jobs in the region.
Evercore ISI reiterated its Outperform rating on Starbucks, maintaining a price target of $120, despite the company’s recent operational changes. These changes include layoffs and a shift in remote work policies for higher-level employees. Starbucks is also streamlining its menu by discontinuing certain low-selling beverages to improve service speed. The company’s strategic moves are part of a broader effort to enhance operational efficiency and customer experience.
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