A powerful coalition of investors delivered a stern message to Starbucks on Wednesday, demanding shareholders reject the reelection of two board members due to what they call ongoing failures in handling worker relations.
The investor group is targeting lead independent director Jorgen Vig Knudstorp and Nominating and Corporate Governance Committee chair Beth Ford as the coffee giant continues struggling to negotiate a contract with its unionized employees.
The company made headlines last year when over 3,800 baristas walked off the job in what became Starbucks’ most extended work stoppage ever. The Starbucks Workers United union organized the strike to demand improved staffing levels, more reliable work schedules, and increased wages following stalled contract negotiations.
The labor conflict presents a significant challenge for CEO Brian Niccol as he attempts to boost declining sales figures.
“We are concerned that, without a constructive relationship between Starbucks and its unionized workforce, sustaining the turnaround may prove difficult,” the investors stated in their letter released before the company’s March 25 annual shareholder meeting.
The coalition includes several major institutional investors: New York State Comptroller Thomas DiNapoli, New York City Comptroller Mark Levine, Trillium ESG Global Equity Mutual Fund, SOC Investment Group, Merseyside Pension Fund, and the Shareholder Association for Research and Education.
Starbucks defended its employment practices in response, stating: “We offer the best job in retail with hourly partners earning an average of $30 an hour and world-class benefits… all for those who only work 20 hours a week on average.”
The investor coalition had previously contacted both directors in January, expressing concerns about the board’s unexplained decision to eliminate its Environmental, Partner, and Community Impact Committee.
According to Starbucks, the dissolved committee’s duties have been redistributed among existing committees, with the full board now taking primary oversight of labor-related matters.
