Starbucks Corp. has named Chipotle Mexican Grill Inc. Chief Executive Officer Brian Niccol as the coffee chain’s new CEO and chairman, replacing Laxman Narasimhan after just over a year in the role.
Chief Financial Officer Rachel Ruggeri will serve as interim CEO until Niccol starts his new role on Sept. 9, the company said in a statement. Mellody Hobson, Starbucks board chair, will become lead independent director. Narasimhan will also step down from his seat on the board.
Starbucks shares jumped 12% on the news in premarket trading, while Chipotle shares fell 10%.
The abrupt leadership shakeup comes after activist investors Elliott Investment Management and Starboard Value reportedly amassed stakes in the company. Starbucks and Elliott were in talks to add Jesse Cohn, a managing partner at the activist investor, to its board of directors. The coffee chain was also considering setting up committees to review capital allocation and operational improvements.
Elliott has taken aim at several companies recently, including Dallas-based Southwest Airlines, where it is pushing the carrier to replace members of its board of directors as well as executive leadership, including CEO Bob Jordan and chairman Gary Kelly.
Niccol joined Chipotle as CEO in 2018 and became chair of the company’s board in 2020. Before joining Chipotle, he was the CEO of Taco Bell.
– Max Zimmerman for Bloomberg
