Starbucks finds itself navigating a complex period of internal governance challenges and aggressive international expansion. As the company prepares for its annual shareholder meeting in March, a coalition of investors is pushing for significant changes to the board’s composition and leadership structure.
Shareholder Meeting to Decide Board’s Future
The upcoming annual general meeting on March 25th is set to be a pivotal event. A group of long-term shareholders, led by the New York City Comptroller, is actively opposing the re-election of two specific board members: Jørgen Vig Knudstorp and Beth Ford. Their campaign centers on what they describe as the board’s persistent failures in overseeing labor relations.
The investors’ grievances are substantial. They cite more than 700 cases alleging unfair labor practices and point to a multi-million dollar settlement in New York City related to violations of work scheduling regulations. The decision by Starbucks to dissolve a committee dedicated to social responsibility by the end of 2025 has further fueled investor discontent. Additionally, these shareholders are advocating for a clearer separation of leadership roles, specifically requesting that CEO Brian Niccol relinquish his additional position as Chairman of the board.
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Strategic Push in Asia Despite Financial Headwinds
On the operational front, Starbucks is pursuing an ambitious growth strategy in Asia, with India representing a key focus. Through its Tata Starbucks joint venture, the coffee chain has now expanded its footprint to over 500 stores in the country. This expansion comes at a short-term cost; losses in the region doubled in the last fiscal year, reaching approximately $16.5 million.
Management remains committed to this path, prioritizing market share gains over immediate profitability. The company has identified India as one of its five most important global growth markets. With steady revenue growth and plans to launch premium store formats in additional major cities by 2026, Starbucks is signaling a long-term commitment to the region.
Market Performance and Outlook
The company’s shares recently benefited from positive market sentiment, closing at €82.74 on Friday after a weekly gain of 4.75%. This movement continues a moderate upward trend observed over the past 50 trading sessions. Investor attention is now firmly fixed on the March 25th meeting, which will determine the board’s future direction and could set the tone for the company’s governance in the coming years.
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