Starbucks on Tuesday announced that Brian Niccol, head of Chipotle Mexican Grill, will replace Laxman Narasimhan as chairman and CEO, just a year after Narasimhan took the position. Niccol will begin his new role on September 9, with Starbucks CFO Rachel Ruggeri serving as interim CEO until then.
“Our board believes he will be a transformative leader for our company, our people, and everyone we serve around the world,” the coffee chain said in a blog post.
“I am excited to join Starbucks and grateful for the opportunity to help steward this incredible company, alongside hundreds of thousands of devoted partners,” the newly-appointed CEO said.
Narasimhan, who took over as Starbucks CEO in September 2022, has stepped down from his role and from the company's board, effective immediately. Following this announcement, Starbucks shares rose by 12 percent in premarket trading, while Chipotle shares dropped by 10 percent.
The coffee giant has been facing increasing pressure from activist investors due to stagnant sales and a declining stock price.
Narasimhan had taken over as Starbucks CEO in September 2022, succeeding Howard Schultz, who had returned from retirement to serve as interim CEO. Before joining Starbucks, Narasimhan was the CEO of Reckitt, a UK-based consumer health and nutrition company, and had previously held executive roles at PepsiCo.
The sudden leadership change at Starbucks follows reports that activist investors Elliott Investment Management and Starboard Value acquired stakes in the company. Starbucks and Elliott were reportedly discussing adding Jesse Cohn, a managing partner at Elliott, to its board of directors. The company was also considering forming committees to review its capital allocation and operational strategies.
Chipotle announced that Chief Operating Officer Scott Boatwright would serve as interim CEO. Mellody Hobson, Starbucks' board chair, will take on the role of lead independent director. Narasimhan will also step down from his position on the board.
Brian Niccol, who joined Chipotle as CEO in 2018 and became board chair in 2020, previously served as CEO of Taco Bell.