Starbucks replaces Indian-origin CEO Narasimhan with Chipotle’s Niccol

Global coffee chain Starbucks has replaced its Indian-origin chef executive officer (CEO) Laxman Narasimhan with Chipotle chairman and CEO Brian Niccol with immediate effect.

Starbucks chief financial officer Rachel Ruggeri will serve as interim CEO until Niccol takes charge on 9 September.

Mellody Hobson, Starbucks board chair, will become lead independent director, the company said in a statement.

Since becoming Chipotle’s CEO in 2018, Niccol has transformed the chain. His focus on people and culture, brand, and menu innovation has set new standards in the industry and driven significant growth and value creation, Starbucks said.

During his leadership, Chipotle’s revenue nearly doubled, profits jumped nearly sevenfold, and the stock price went up nearly 800%. All while increasing wages for retail team members, expanding benefits, and strengthening the culture.

“We are thrilled to welcome Brian to Starbucks. His phenomenal career speaks for itself. Brian is a culture carrier who brings a wealth of experience and a proven track record of driving innovation and growth,” lead independent director Hobson said.

“I am excited to join Starbucks and grateful for the opportunity to help steward this incredible company alongside hundreds of thousands of devoted partners,” Niccol said.

Flurry of CEO firings at US firms

Meanwhile, Bloomberg reported that Laxman Narasimhan’s abrupt exit is adding to a record number of CEO ousters at US companies.

The Bloomberg report said that of the 191 CEOs who exited companies in the Russell 3000 Index this year, 74 were considered to have been fired or forced out, citing data compiled by exechange.com, which tracks executive changes.

While Starbucks didn’t reveal the details about Narasimhan’s exit, exechange.com counted him in its tally.

Starbucks has reported back-to-back declines in comparable sales for two quarters, while its shares have declined about 20% this year.

The board faced pressure from activist investors Elliott Investment Management and Starboard Value. Former CEO Howard Schultz, who stayed on as an advisor, expressed dissatisfaction with the company’s performance, both publicly and privately.