Starbucks named former Juniper Networks chief executive officer Kevin R. Johnson as its next chief operating officer, underscoring the role technology now plays at the coffee chain and mobile-payment innovator.
Johnson, 54, will take over on March 1 for Troy Alstead, who is leaving the company for an unpaid sabbatical announced earlier this month. Johnson, who has been a Starbucks director since 2009, will remain on the board but cease membership on all committees, the Seattle-based company said Thursday.
The move brings Starbucks a seasoned technology executive at a time when reaching customers through their mobile phones is an integral part of its strategy. Chief Executive Officer Howard Schultz said Thursday that about 16 per cent of Starbucks US store transactions now come from mobile devices. The chain’s app, which lets customers pay and earn rewards points by scanning their phones, has more than 13 million active users.
“The choice speaks to Schultz’s conviction that mobile and digital platforms will drive the company’s future growth,” said Asit Sharma, an analyst at the Motley Fool in Raleigh, North Carolina. “Johnson brings deep technology and supply-chain expertise to Starbucks’ C-level.”
Johnson will be taking over for an executive who began managing day-to-day operations last year. Alstead, a 23-year veteran of the coffee chain, had been widely cited as a potential CEO successor.
Schultz said on a conference call Thursday that he had been talking to Johnson for some time, independent of Alstead’s decision to take a sabbatical. He also played down the idea that the move was part of a CEO succession plan.
Still Committed
“My personal commitment to Starbucks has never been greater, and I also want to make it clear that Kevin’s addition is not part of some unannounced succession arrangement,” said Schultz, 61.
The shares rose as much as 4.5 per cent to $86.44 in late trading in New York, lifted by an 82 per cent surge in profit in the first quarter. The stock increased 4.7 per cent in 2014, the sixth straight year of gains.
Johnson will receive an annual base salary of $1 million, Starbucks said. He’s also been granted a new-hire equity award of $7 million, along with a $1 million cash award.
Johnson led Juniper, a Sunnyvale, California-based maker of networking gear, from 2008 through 2013. He previously worked at Microsoft Corp., which he joined in 1992. Johnson rose to become president of its flagship Windows business as well as its struggling Online Services division. He also championed Microsoft’s unsuccessful bid to buy Yahoo! in 2008, an attempt to create a strong No. 2 in the search business to Google.
Bloomberg News, edited by ESM
