7 ms·

Take a closer look at Starbucks CEO's contract, which covers his commute by jet

90 points by puffl 2y ago

p1esk 2y ago
Average work hours for CEO (according to the article): 62.5/week. I’m guessing that’s also true of those who are trying to become CEO. Personally, I’d rather not spend almost all my waking hours at work, most of my life.
- wslh 2y ago
  If you enjoy your work, 62.5 hours per week doesn’t seem excessive, especially if you spread some of that time over the weekends. At that point, you could compare it to how long artists and scientists typically work. Eight hours of sleep is generally sufficient for most people. Personally, I consider physical activity at the CEO level to be part of their work time.
- dahart 2y ago
  It’s true; CEOs and direct reports to the CEO are often working long hours. It’s important to note that, motivation-wise, running a company is very different from being a worker at a company under a manager. From experience running my own (very small) company, its very easy to put in long hours for something that’s your own, something where anything that goes wrong is your responsibility, something where success is defined by and depends on you. It’s much harder to motivate long hours as a regular employee, especially if the extra hours aren’t your choice and/or are the result of problems other people created. Being in charge is not for everyone, but for some, sixty hours a week is relatively light.
- rc_mob 2y ago
  After they settle in for a fee years. CEO's take far far more vacations than me or you.
  - FredPret 2y ago
    More vacays != less time worked
    - resoluteteeth 2y ago
      If a normal employee claimed to still be working full time while on vacation they would call it "quiet vacationing" and probably fire them if they found out.
      - Ancapistani 2y ago
        Some of us do. I’ve been in a hotel/resort for the past week. I didn’t take time off or notify my employer, though my direct manager is aware. No one cares, because my work still gets done.
- resoluteteeth 2y ago
  I would take those numbers with a grain of salt. CEOs aren't usually accountable to anyone for how they calculate their hours, so the statistics tend to be self-reported, but they have an incentive to make the numbers as high as possible to seem like they are working hard and deserve their salaries, sand as a result, it seems like they often tend to do things like include activities that everyone has to do but wouldn't normally be allowed to count as hours of work. For example, the wall street journal had this infamous infographic a while ago where 20 hours of CEOs' supposed working hours go to a "miscellaneous" category which includes "exercise" and "personal appointments": https://imgur.com/jkQZ0YX https://imgur.com/jkQZ0YX
- bschmidt1 2y ago
  I don't believe the typical CEO is working harder or longer hours than the workers. The few that are may be as part of a lifestyle, because they want to.
firesteelrain 2y ago
The small article aptly points out the unique ‘perk’ (or in their eyes necessary for conducting CEO business) use of the Starbucks jet for commuting by jet. However it tries to paint a comparison to Starbuck’s environmental initiative that speaks to giving back more than it takes in terms of agriculture. This seems like a false comparison. Two have nothing to do with each other. The reason is because he wants to live in his home in Newport Beach, California vs moving to Seattle. Quoted text from SEC notification: “ During your employment with the Company, you will not be required to relocate to the Company’s headquarters (currently in Seattle, Washington). You agree to commute from your residence to the Company’s headquarters (and engage in other business travel) as is required to perform your duties and responsibilities. From the Start Date until such time as you secure permanent secondary housing arrangements in Seattle, Washington (up to three months following the Start Date), the Company will pay directly, or reimburse you for, the costs of your reasonable temporary housing arrangements in Seattle, Washington and a driver to transport you as necessary while you are in Seattle, Washington. If you decide to relocate to the Seattle, Washington area, you will be eligible for reimbursement for qualified relocation expenses to Seattle, Washington, pursuant to the Company’s relocation policy. Remote Office: Promptly following the Start Date, the Company will establish, with your assistance, a small remote office in Newport Beach, California. The Company will employ an assistant of your choosing for such office, subject to the reasonable consent of the Company. This office location will be maintained at the expense of the Company.” CTRL+F for jet comes up empty. It does say they will provide a driver. So maybe it’s implied he will use the jet.
- komadori 2y ago
  > CTRL+F for jet comes up empty. The relevant word in the text is "aircraft": "You will be eligible to use the Company aircraft for (i) business-related travel in accordance with the Company’s travel policy, (ii) travel between your city of residence and the Company’s headquarters in Seattle, Washington and (iii) your personal travel in accordance with the Company’s policies, up to a maximum amount of $250,000 per year, which amount will be based on the aggregate incremental cost to the Company." A commuter jet and a quarter of a million dollars of personal travel!
- ooterness 2y ago
alephnerd 2y ago
As I mentioned previously on HN, Niccols is literally the most successful CEO in the restaurant market today - having grown Chipotle's stock from $200 to $1300 (before the stock split last year), and helped shepherd Chipotle in the aftermath of it's food safety scandal. With that kind of a CEO you have to bend over backwards to poach them (eg. Making them Chair and CEO - very rare for non-founder CEOs to be granted this role) Starbucks is simply extremely desperate to have good leadership after Laks didn't fit in well.
- manuelmoreale 2y ago
  Not going to disagree with your comment but I find it so socially interesting that “the most successful CEO in the restaurant market” is judged by something that has nothing to do with the quality of the food.
  - xhkkffbf 2y ago
    I think you're foolish if you think that stock price "has nothing to do with the quality of the food." Repeat customers are a big part of the profitability for any business and they're a big part of the success of Chipotle. Unless you think that the quality of the food doesn't matter to the customers, I think the real challenge for any restaurant is to come up with an acceptable level of quality for an acceptable price. The stock price shows that he achieved that for an increasing number of customers.
  - maronato 2y ago
    In theory, the stock price is at least partially tied to sales and brand perception, which in turn correlates with the perceived quality/price ratio by the public.
    - manuelmoreale 2y ago
      And in practice? Asking seriously, I never had Chipotle (because it’s not even a thing here) so has the product actually improved all that much under this guy’s guide?
ct0 2y ago
Many large companies (f50) have fleets of jets and salaried pilots. Its not uncommon at all for commuting by jet to be the standard. Not sure why this is such a big deal or any different than the thousands of c-suites that commute this way.
- paulcole 2y ago
  > Not sure why this is such a big deal or any different than the thousands of c-suites that commute this way. Having read the article, what’s your best guess?
- alephnerd 2y ago
  > Its not uncommon at all for commuting by jet to be the standard Companies (F500s and below) are increasingly moving away from this for efficiency and cost reasons, but I agree with you that it's a bit of a nothingburger. Meanwhile the same HNers complaining about Niccols contract are the same ones who oppose the unrealized capital gains tax proposal that literally only affects people with $100M and above in undeployed capital
  - cherrycherry98 2y ago
    First $100M, then when that's not enough it'll be $50M, then $10M, then $1M, then $500k. The definition of "rich" will keep being adjusted down. And for what? So politicians can spend it on some photo-op project for themselves? Maybe sending "aid" to other countries (bullets and bombs)? Using it to spy on it's own citizens and quell dissidents? Surely individuals can on average invest the money more productively.
  - AdrianB1 2y ago
    https://en.wikipedia.org/wiki/First_they_came_ https://en.wikipedia.org/wiki/First_they_came_... You don't even have a moral argument for that stupid idea. Just a political belief.
- dahdum 2y ago
  > Not sure why this is such a big deal or any different than the thousands of c-suites that commute this way. Starbucks pretends to care about the environment and sustainability much more than most. Or at least they used to, he may dial that back since his commute will be mentioned in news articles for at least the next few years.
dawnerd 2y ago
250k in personal use jet time sounds like a lot but those jets are expensive per hour so that probably doesn’t get them very far.
- _fat_santa 2y ago
  A quick google says that it costs anywhere between 3k and 18k per hour to operate a private jet. Lets give it a round number and say that the Starbucks jet costs $10k/hr to operate. By that metric, he gets to use the plane for 25hrs/year. It's not a staggering amount of time but also not nothing either. Guy could probably go to Europe and back 2-3 times on that amount, or ~5 cross-country trips.
  - ceejayoz 2y ago
    I'm sure can arrange to go to Europe "for work". A site visit in London to check on the UK's facilities.
    - alephnerd 2y ago
      I've done those work trips. They suck. Who cares if you're eating at Per Se when you're stuck with other people vying for your job or trying to push their agenda. You have almost no time for personal enjoyment, and you're almost entirely stuck with coworkers so you can't let loose. C-Suite and C-Suite adjacent end up working 60-80 hour weeks, and you have to be always on because that is what the role entails > I'm sure can arrange to go to Europe "for work" CEOs report to boards, and we ask their C-Suite peers about each other and any issues. And even before it could reach that level, the CFO would absolutely push back on a frivolous expense like that. ----------- Best bang for your buck between luxury and free time is Staff/Principal Engineer - you earn enough that you can afford to take fancy vacations, but you are still an experienced IC so you can shop around for jobs if god forbid you lose yours, and you aren't expected to work most weekends
      - xhkkffbf 2y ago
        When you put it that way, I makes it harder to hate the C-suite. But I'm conditioned by all of the haters on social media to think that socialism will some how fix all of this.
AtlasBarfed 2y ago
Holy crap, the Chipotle CEO? He ruined Chipotle, if it's the same ex-taco bell guy. I haven't eaten there in...Six years now? Maybe once and I used to be multiple times per week. Get ready for enshittification, Starbucks customers
- deleted 2y ago
  [deleted]
- hungie 2y ago
  Assuming Starbucks wasn't already enshittified is a wild take.
- manuelmoreale 2y ago
  I love that someone in this same thread claimed he’s the most successful CEO in the restaurant industry.
  - AtlasBarfed 2y ago
    Enshittification is a successful medium term business strategy. Good for hitting your CEO stock options and leaving a smoking carcass of company afterward.
- sentientslug 2y ago
  And what exactly did he do to “ruin” Chipotle in your eyes? According to literally everyone else (and the stock price) he has been wildly successful
chucksmash 2y ago
The only mention I see in the article that he will be using the plane to commute is in an annotation: > For his commute, he'll be covering the 1,600km each way via corporate jet. No mention of how often he'll make that trip. One might read the requirement of "in the office three days each week" and infer these would be weekly trips, but there's no support given for this inference in TFA. ...which gives the article a distinct air of outrage chum. Instead of reporting on what someone is doing, it is trying to stir up resentment about what someone might do, based on their employment contract?
greatgib 2y ago
This is good to see the great disconnect in the récent years between CEO compensation and workers compensation. Imagine that is is getting 10 millions as sign-in bonus, just because he joins. When it easily represent a thousand years of work of a Barista that is the one really working hard every day to bring the cash in. Sure, the CEO work value is important, but not that multiple thousand years of employees. I like to translate such a CEO compensation into the number of products that you have to sell every year just to cover for the pay of this single person. Here if we think something like 5 to 15 millions of dollars per year, and a Starbucks drink is probably sold around 7 dollars: With that, employees have to sell around 710 000 to 2 142 000 drinks per year just to pay a standard year of this guy. My brain has hard time comprehending such a number.
- paulcole 2y ago
  > Sure, the CEO work value is important, but not that multiple thousand years of employees. Why not? Because you find it personally distasteful? What multiple is OK? If it’s not 1000 is it 999? If not 500 then 400? If not 100 then 25? Instead of downvoting, try answering…
  - kkfx 2y ago
    [not OP] I suppose because any verticistic org can be sustainable for long. To have a resilient enterprise you need value spread across the entire pyramid, if not what happen when a CEO change mind or die suddenly? Beside that, why travel to be in an office, so doing the same thing he do at home? It's not efficient, it's stupid and stupid thing done for political reasons, like justify RTO because big corps need cities while humanity today need the opposite, could not led to anything than bad lands and dire scenarios. I take that as a proof we are essentially in a falling, failed society, where we lost the substantial propulsion force, industry and open research. Or this change quickly AND SUBSTANTIALLY or we will end up like any other failed empire before, in dire conditions.
    - paulcole 2y ago
      HN try not to argue against RTO challenge. Difficulty: impossible.
lvl155 2y ago
People make such a big deal out of this and rightfully so but Bank of America CEO Brian Moynihan did the same thing for years. At least Niccols is successful at running a major company (strictly) from an investment perspective. Moynihan did absolutely nothing.
deleted 2y ago
[deleted]
mitjam 2y ago
Thomas Middelhoff commuted with helicopter from Bielefeld to Essen (about 100 Miles) for some time while he was CEO of Arcandor. Reportedly 28 flights for about 80 k€ total. "Peanuts" as they say here in Germany but it became a big deal after Arcandor went bancrupt. Thomas Middelhoff was in the end convicted of embezzlement and tax evasion (the flights were part of the trials but not the main one).

90 points by puffl 2y ago

Average work hours for CEO (according to the article): 62.5/week. I’m guessing that’s also true of those who are trying to become CEO. Personally, I’d rather not spend almost all my waking hours at work, most of my life.

wslh 2y ago
If you enjoy your work, 62.5 hours per week doesn’t seem excessive, especially if you spread some of that time over the weekends. At that point, you could compare it to how long artists and scientists typically work. Eight hours of sleep is generally sufficient for most people. Personally, I consider physical activity at the CEO level to be part of their work time.
dahart 2y ago
It’s true; CEOs and direct reports to the CEO are often working long hours. It’s important to note that, motivation-wise, running a company is very different from being a worker at a company under a manager. From experience running my own (very small) company, its very easy to put in long hours for something that’s your own, something where anything that goes wrong is your responsibility, something where success is defined by and depends on you. It’s much harder to motivate long hours as a regular employee, especially if the extra hours aren’t your choice and/or are the result of problems other people created. Being in charge is not for everyone, but for some, sixty hours a week is relatively light.
rc_mob 2y ago
After they settle in for a fee years. CEO's take far far more vacations than me or you.
- FredPret 2y ago
  More vacays != less time worked
  - resoluteteeth 2y ago
    If a normal employee claimed to still be working full time while on vacation they would call it "quiet vacationing" and probably fire them if they found out.
    - Ancapistani 2y ago
      Some of us do. I’ve been in a hotel/resort for the past week. I didn’t take time off or notify my employer, though my direct manager is aware. No one cares, because my work still gets done.
resoluteteeth 2y ago
I would take those numbers with a grain of salt. CEOs aren't usually accountable to anyone for how they calculate their hours, so the statistics tend to be self-reported, but they have an incentive to make the numbers as high as possible to seem like they are working hard and deserve their salaries, sand as a result, it seems like they often tend to do things like include activities that everyone has to do but wouldn't normally be allowed to count as hours of work. For example, the wall street journal had this infamous infographic a while ago where 20 hours of CEOs' supposed working hours go to a "miscellaneous" category which includes "exercise" and "personal appointments": https://imgur.com/jkQZ0YX https://imgur.com/jkQZ0YX
bschmidt1 2y ago
I don't believe the typical CEO is working harder or longer hours than the workers. The few that are may be as part of a lifestyle, because they want to.

firesteelrain 2y ago

The small article aptly points out the unique ‘perk’ (or in their eyes necessary for conducting CEO business) use of the Starbucks jet for commuting by jet. However it tries to paint a comparison to Starbuck’s environmental initiative that speaks to giving back more than it takes in terms of agriculture. This seems like a false comparison. Two have nothing to do with each other. The reason is because he wants to live in his home in Newport Beach, California vs moving to Seattle. Quoted text from SEC notification: “ During your employment with the Company, you will not be required to relocate to the Company’s headquarters (currently in Seattle, Washington). You agree to commute from your residence to the Company’s headquarters (and engage in other business travel) as is required to perform your duties and responsibilities. From the Start Date until such time as you secure permanent secondary housing arrangements in Seattle, Washington (up to three months following the Start Date), the Company will pay directly, or reimburse you for, the costs of your reasonable temporary housing arrangements in Seattle, Washington and a driver to transport you as necessary while you are in Seattle, Washington. If you decide to relocate to the Seattle, Washington area, you will be eligible for reimbursement for qualified relocation expenses to Seattle, Washington, pursuant to the Company’s relocation policy. Remote Office: Promptly following the Start Date, the Company will establish, with your assistance, a small remote office in Newport Beach, California. The Company will employ an assistant of your choosing for such office, subject to the reasonable consent of the Company. This office location will be maintained at the expense of the Company.” CTRL+F for jet comes up empty. It does say they will provide a driver. So maybe it’s implied he will use the jet.

komadori 2y ago
> CTRL+F for jet comes up empty. The relevant word in the text is "aircraft": "You will be eligible to use the Company aircraft for (i) business-related travel in accordance with the Company’s travel policy, (ii) travel between your city of residence and the Company’s headquarters in Seattle, Washington and (iii) your personal travel in accordance with the Company’s policies, up to a maximum amount of $250,000 per year, which amount will be based on the aggregate incremental cost to the Company." A commuter jet and a quarter of a million dollars of personal travel!
ooterness 2y ago

alephnerd 2y ago

As I mentioned previously on HN, Niccols is literally the most successful CEO in the restaurant market today - having grown Chipotle's stock from $200 to $1300 (before the stock split last year), and helped shepherd Chipotle in the aftermath of it's food safety scandal. With that kind of a CEO you have to bend over backwards to poach them (eg. Making them Chair and CEO - very rare for non-founder CEOs to be granted this role) Starbucks is simply extremely desperate to have good leadership after Laks didn't fit in well.

manuelmoreale 2y ago
Not going to disagree with your comment but I find it so socially interesting that “the most successful CEO in the restaurant market” is judged by something that has nothing to do with the quality of the food.
- xhkkffbf 2y ago
  I think you're foolish if you think that stock price "has nothing to do with the quality of the food." Repeat customers are a big part of the profitability for any business and they're a big part of the success of Chipotle. Unless you think that the quality of the food doesn't matter to the customers, I think the real challenge for any restaurant is to come up with an acceptable level of quality for an acceptable price. The stock price shows that he achieved that for an increasing number of customers.
- maronato 2y ago
  In theory, the stock price is at least partially tied to sales and brand perception, which in turn correlates with the perceived quality/price ratio by the public.
  - manuelmoreale 2y ago
    And in practice? Asking seriously, I never had Chipotle (because it’s not even a thing here) so has the product actually improved all that much under this guy’s guide?

ct0 2y ago

Many large companies (f50) have fleets of jets and salaried pilots. Its not uncommon at all for commuting by jet to be the standard. Not sure why this is such a big deal or any different than the thousands of c-suites that commute this way.

paulcole 2y ago
> Not sure why this is such a big deal or any different than the thousands of c-suites that commute this way. Having read the article, what’s your best guess?
alephnerd 2y ago
> Its not uncommon at all for commuting by jet to be the standard Companies (F500s and below) are increasingly moving away from this for efficiency and cost reasons, but I agree with you that it's a bit of a nothingburger. Meanwhile the same HNers complaining about Niccols contract are the same ones who oppose the unrealized capital gains tax proposal that literally only affects people with $100M and above in undeployed capital
- cherrycherry98 2y ago
  First $100M, then when that's not enough it'll be $50M, then $10M, then $1M, then $500k. The definition of "rich" will keep being adjusted down. And for what? So politicians can spend it on some photo-op project for themselves? Maybe sending "aid" to other countries (bullets and bombs)? Using it to spy on it's own citizens and quell dissidents? Surely individuals can on average invest the money more productively.
- AdrianB1 2y ago
  https://en.wikipedia.org/wiki/First_they_came_ https://en.wikipedia.org/wiki/First_they_came_... You don't even have a moral argument for that stupid idea. Just a political belief.
dahdum 2y ago
> Not sure why this is such a big deal or any different than the thousands of c-suites that commute this way. Starbucks pretends to care about the environment and sustainability much more than most. Or at least they used to, he may dial that back since his commute will be mentioned in news articles for at least the next few years.

dawnerd 2y ago

250k in personal use jet time sounds like a lot but those jets are expensive per hour so that probably doesn’t get them very far.

_fat_santa 2y ago
A quick google says that it costs anywhere between 3k and 18k per hour to operate a private jet. Lets give it a round number and say that the Starbucks jet costs $10k/hr to operate. By that metric, he gets to use the plane for 25hrs/year. It's not a staggering amount of time but also not nothing either. Guy could probably go to Europe and back 2-3 times on that amount, or ~5 cross-country trips.
- ceejayoz 2y ago
  I'm sure can arrange to go to Europe "for work". A site visit in London to check on the UK's facilities.
  - alephnerd 2y ago
    I've done those work trips. They suck. Who cares if you're eating at Per Se when you're stuck with other people vying for your job or trying to push their agenda. You have almost no time for personal enjoyment, and you're almost entirely stuck with coworkers so you can't let loose. C-Suite and C-Suite adjacent end up working 60-80 hour weeks, and you have to be always on because that is what the role entails > I'm sure can arrange to go to Europe "for work" CEOs report to boards, and we ask their C-Suite peers about each other and any issues. And even before it could reach that level, the CFO would absolutely push back on a frivolous expense like that. ----------- Best bang for your buck between luxury and free time is Staff/Principal Engineer - you earn enough that you can afford to take fancy vacations, but you are still an experienced IC so you can shop around for jobs if god forbid you lose yours, and you aren't expected to work most weekends
    - xhkkffbf 2y ago
      When you put it that way, I makes it harder to hate the C-suite. But I'm conditioned by all of the haters on social media to think that socialism will some how fix all of this.

AtlasBarfed 2y ago

Holy crap, the Chipotle CEO? He ruined Chipotle, if it's the same ex-taco bell guy. I haven't eaten there in...Six years now? Maybe once and I used to be multiple times per week. Get ready for enshittification, Starbucks customers

deleted 2y ago
[deleted]
hungie 2y ago
Assuming Starbucks wasn't already enshittified is a wild take.
manuelmoreale 2y ago
I love that someone in this same thread claimed he’s the most successful CEO in the restaurant industry.
- AtlasBarfed 2y ago
  Enshittification is a successful medium term business strategy. Good for hitting your CEO stock options and leaving a smoking carcass of company afterward.
sentientslug 2y ago
And what exactly did he do to “ruin” Chipotle in your eyes? According to literally everyone else (and the stock price) he has been wildly successful

chucksmash 2y ago

The only mention I see in the article that he will be using the plane to commute is in an annotation: > For his commute, he'll be covering the 1,600km each way via corporate jet. No mention of how often he'll make that trip. One might read the requirement of "in the office three days each week" and infer these would be weekly trips, but there's no support given for this inference in TFA. ...which gives the article a distinct air of outrage chum. Instead of reporting on what someone is doing, it is trying to stir up resentment about what someone might do, based on their employment contract?

greatgib 2y ago

This is good to see the great disconnect in the récent years between CEO compensation and workers compensation. Imagine that is is getting 10 millions as sign-in bonus, just because he joins. When it easily represent a thousand years of work of a Barista that is the one really working hard every day to bring the cash in. Sure, the CEO work value is important, but not that multiple thousand years of employees. I like to translate such a CEO compensation into the number of products that you have to sell every year just to cover for the pay of this single person. Here if we think something like 5 to 15 millions of dollars per year, and a Starbucks drink is probably sold around 7 dollars: With that, employees have to sell around 710 000 to 2 142 000 drinks per year just to pay a standard year of this guy. My brain has hard time comprehending such a number.

paulcole 2y ago
> Sure, the CEO work value is important, but not that multiple thousand years of employees. Why not? Because you find it personally distasteful? What multiple is OK? If it’s not 1000 is it 999? If not 500 then 400? If not 100 then 25? Instead of downvoting, try answering…
- kkfx 2y ago
  [not OP] I suppose because any verticistic org can be sustainable for long. To have a resilient enterprise you need value spread across the entire pyramid, if not what happen when a CEO change mind or die suddenly? Beside that, why travel to be in an office, so doing the same thing he do at home? It's not efficient, it's stupid and stupid thing done for political reasons, like justify RTO because big corps need cities while humanity today need the opposite, could not led to anything than bad lands and dire scenarios. I take that as a proof we are essentially in a falling, failed society, where we lost the substantial propulsion force, industry and open research. Or this change quickly AND SUBSTANTIALLY or we will end up like any other failed empire before, in dire conditions.
  - paulcole 2y ago
    HN try not to argue against RTO challenge. Difficulty: impossible.

lvl155 2y ago

People make such a big deal out of this and rightfully so but Bank of America CEO Brian Moynihan did the same thing for years. At least Niccols is successful at running a major company (strictly) from an investment perspective. Moynihan did absolutely nothing.

deleted 2y ago

[deleted]

mitjam 2y ago

Thomas Middelhoff commuted with helicopter from Bielefeld to Essen (about 100 Miles) for some time while he was CEO of Arcandor. Reportedly 28 flights for about 80 k€ total. "Peanuts" as they say here in Germany but it became a big deal after Arcandor went bancrupt. Thomas Middelhoff was in the end convicted of embezzlement and tax evasion (the flights were part of the trials but not the main one).