Back when Dilbert strips were still a thing, Dogbert was well-known for his occasional stints as CEO. And we all thought it was funny, and sad, how this little ovoid dog somehow merited 400 times the average employee’s salary. But we likely never thought those would be the good old days, as reports noted that Brian Niccol of coffee giant Starbucks (SBUX) is making Dogbert look humanitarian in comparison. Niccol’s huge paycheck proved a bitter drink for investors, and shares slid nearly 2.5% in Thursday afternoon’s trading.
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The AFL-CIO’s annual Executive Paywatch report noted that Brian Niccol pulled in 6,666 times more than the typical Starbucks employee did in 2024. This actually represented the single widest pay gap in corporate America, and by a substantial margin. A typical Starbucks worker takes home $15,000, the report noted, while Niccol walked away with $98 million. It is worth pointing out, though, that this study includes all workers worldwide, not merely United States workers.
Naturally, the unionization measures at Starbucks took this ball and ran with it so hard they broke through the stadium wall. Fred Redmond, secretary-treasurer of the AFL-CIO, noted “…no wonder why the workers there at Starbucks are fighting to form a union with the Starbucks Workers Union to improve their pay and working conditions. And these numbers only begin to scratch the surface of how runaway executive pay is fueling economic inequality.”
…But Then Who Will Do the Work?
Starbucks might be able to save the cash required to keep paying Niccol that monster wage thanks to the return to office (RTO) mandate it recently embarked on. Not so much because it will increase productivity or make more sales, but because it will save big money as employees quit rather than go back to the office.
Thus, outside observers are keeping a watch on Starbucks right now. It is possible that the protests about returning to the office will be loud, but over quickly, and cause little problem going forward. However, some companies with stringent RTOs have seen longer-term problems emerge as a result. Working remotely was a commonly-beloved perk that, for a while, became downright necessary. Workers relished the flexibility of being able to run an errand during “normal business hours.” But when employers started tightening the rules—perhaps after seeing valuable office space lose a lot of value—some employees, including the good ones, just folded in response and left the company.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 13 Buys, nine Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 30.82% rally in its share price over the past year, the average SBUX price target of $96.24 per share implies 2.66% upside potential.
