Starbucks Corporation will hold its annual meeting on March 25, and NLPC will present a shareholder proposal that calls for the company to implement a policy to require the roles of Chair and CEO to be held by two different executives. Brian Niccol (pictured above) currently holds both positions. Our resolution is Proposal 5, which can be found on Page 89 of the proxy statement.
Earlier this week we circulated to our fellow Starbucks investors (both large firms and small-timers) a detailed report that explains why we believe this governance policy is needed. Since shareholder proposals are limited to 500 words, it is important to be able to elaborate on the necessity of our recommended governance changes (something SEC Chairman Paul Atkins and his underling James Moloney seem to disagree with). The so-called “exempt solicitation” report is part policy principle, part leadership critique, and fully a call back to fiduciary responsibility — an excerpt:
The unchecked concentration of power within the dual role of Chair and CEO at Starbucks presents risks that are antithetical to the fundamental principles of sound corporate governance and the long-term interests of its shareholders. It contradicts the established governance standards that underscore the independence and objective oversight necessary for a board to effectively protect shareholder value and ensure corporate accountability.
The potential for conflict of interest is significant: a CEO who also serves as Chair is less likely to be held accountable for the company’s missteps or to receive the critical oversight needed to prevent them. This dynamic has been observed not only in corporate history but is also being increasingly recognized in contemporary governance discourse.
Lately a prevailing narrative in the mainstream business media is that Niccol, who is celebrated as a turnaround unicorn because of his work at Chipotle, is executing a similar achievement thanks to his “Back to Starbucks” plan. Our report characterizes the company’s “progress” as largely a “mirage.”
Besides our own proposal, NLPC has also circulated a separate report to Starbucks investors urging them to support Proposal 6 (Page 91) and Proposal 7 (Page 93) on the proxy statement. Both proposals address the same topic with slightly different approaches.
Proposal 6, sponsored by National Center for Public Policy Research, requests “a report on the Company’s apparent exclusion of detransitioning in its healthcare coverage.”
Proposal 7, sponsored by Bowyer Research on behalf of the Oklahoma Tobacco Settlement Endowment Trust, requests “a report on median compensation and benefits gaps as they address reproductive and gender dysphoria care.”
The gist — or backstory — of both proposals is that major corporations, including Starbucks, have gone all-in on legitimizing and amplifying the Human Rights Campaign‘s pro-transgender agenda by funding through their employee benefits programs full “care” for workers and their child dependents that includes therapies, medicines, and surgical procedures to “transition” from one sex to the opposite sex. As the proposals argue and our solicitation report details, the medicine and science behind gender ideology has been flimsy and politicized — and now, thoroughly debunked.
The consequence now is that corporations — both domestic and foreign, almost entirely across the board — are vulnerable to significant litigation and reputational risk because of their ignorant support for such benefits policies. We pointed this out over the last few years with NLPC’s own shareholder proposals at companies like Disney and Pepsi, and reiterated it earlier this month following a $2-million judgment that a young detransitioner won against her former health care providers.
NLPC’s solicitation report in support of its own resolution, Proposal 5, can be read here.
NLPC’s solicitation report in support of Proposal 6 and Proposal 7 can be found here.
(Post references PX14A6G Notice of exempt solicitation)
