Starbucks Shakes Up C-Suite: Revived COO Role Sparks Market Optimism as SBUX Ticks Up

Starbucks CEO Laxman Narasimhan—sorry, 'interim CEO'—just dusted off the COO title after a five-year hiatus. Because nothing says 'operational urgency' like resurrecting a corporate relic while your stock underperforms the S&P by 12% this year.

The move follows Narasimhan's April memo whining about 'being too slow'—apparently bureaucracy tastes worse than their pumpkin spice lattes. Wall Street rewarded the existential crisis with a modest 1.3% bump, proving investors will cheer any half-baked restructuring if it comes with enough corporate jargon.

Pro tip for the new COO: maybe fix the mobile app before worrying about 'operational synergy.' Just a thought.

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Grams, who formerly served as chief coffeehouse officer, is now in charge of full operations at the company. This means he not only has charge over the coffeehouses in general, but also the supply chain. The MOVE is effective immediately, reports noted, unlocking a lot of new authority for Grams. With that, Grams also got a fairly healthy raise, going from $700,000 per year to $900,000, and his incentive bonus target is now 125% of his salary instead of the 100% it was previously.

But that was not the only move Starbucks made; it also unified the coffee and sustainability team with the global brand team, a move that should help “bring teams together and strengthen accountability,” reports noted. All of this was done to capitalize on the “momentum” that Niccol already believes is present in the coffeehouses, and make the whole process “move faster,” as Niccol put it.

Maybe a Chief Human Decency Officer Next?

The move comes at a good time for Starbucks, as it is facing an issue in Virginia. A couple from Chesterfield, a report noted, were out for a good time at a comedy show. Nelisa and Kevin Key were enjoying the evening, when Kevin started sweating profusely and noting he didn’t “feel well.” That was punctuated by a sudden bout of vomiting. Nelisa had seen this before, and knew what Kevin needed: ice water. So she pulled into a Starbucks, reasonably confident some could be had.

While the line for drinks at the Starbucks was substantial, the sight of Kevin in Stage 4 kidney failure sparked sympathy, and Nelisa and Kevin were hustled to the front of the line. But once they reached it, a Starbucks employee noted that the pair needed to “get in line.” Nelisa’s protestations that Kevin just needed water, and quickly, fell on deaf ears as the employee reportedly insisted the pair “get in line.” The response from Starbucks Media Relations, meanwhile, was also mind-boggling. It made the appropriate noises about being “…committed to providing appropriate accommodations,” but then, noted that asking for water in the pick-up area “disrupts the workflow.”

Is Starbucks Stock a Good Buy?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 12 Buy and 10 Hold recommendations assigned in the past three months, as indicated by the graphic below. After a 8.15% rally in its share price over the past year, the average SBUX price target of $93.68 per share implies 6.56% upside potential.

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