Message from Kevin Johnson: Partner Investments 2018

Dear partners,

In 1987, Howard Schultz set a new bar for retail companies in America. His vision evolved Starbucks into a company where part-time partners receive comprehensive health insurance, stock ownership, and a 401K retirement benefit as part of their total compensation at Starbucks.

Fast forward more than 30 years later, we continue to build on this heritage with new benefits for our part-time partners, such as Starbucks College Achievement Plan (SCAP). We are proud of Starbucks reputation as a leader in employee benefits, and we consistently rely on your feedback through surveys, open forums, and your direct communication with your leaders. We also from time to time consult outside industry experts to measure our total pay approach against other employers of choice.

Recently, we commissioned Aon, a leading global professional services firm, to analyze how we compare to other leading employers in retail. Their independent evaluation found that the total pay benefit package we offer to partners who work 20 hours or more per week is unmatched by any other retailer in their analysis. The evaluation also highlighted an area where we can do more and be an industry leader – our new Partner and Family Sick Time benefit. I will share more about this new benefit in a moment and am pleased to share it will launch later this year, furthering our leadership position.

In recent years, we’ve made significant investments in our more than 150,000 U.S. Starbucks partners, and we will continue to do so. Starting in fiscal year 2015, we have invested nearly $800 million in our U.S. store partners through increases to our wages and benefits. Investing in our partners has long been our strategy, and due to the recent changes in U.S. tax law, we are able to accelerate some significant partner investments to continue our leadership as the retail industry leader in total compensation and benefits.

This April, U.S. hourly and salaried partners will receive a second wage increase in addition to the annual increases that they have already received this fiscal year. This will include an investment of approximately $120 million in wage increases that will be allocated on regional cost of living and entry wage laws that vary from state to state. While Starbucks already pays above the minimum wage in all states across the country, we have always felt strongly that a valuable benefits package must complement and contribute toward an industry-leading total compensation package. The value of Starbucks benefit package (fully accessed) is unmatched by other retailers and provides thousands of dollars of additional compensation value.

On April 16, we will provide an additional 2018 stock grant for all full-time, part-time, hourly and salaried U.S. partners across our stores, plants and support centers, who have been active as of Jan. 1, 2018. All Starbucks retail partners will receive at least a $500 grant, store managers will each receive a $2,000 grant, and plant and support center partner (non-retail) grants will vary depending on annualized salary or level. This stock award will be granted as 100% restricted stock units and will vest in one year on April 16, 2019. This investment alone is valued at more than $100 million.

A new Partner and Family Sick Time benefit will be available to all U.S. full-time, part-time, hourly and salaried partners, which allows partners to accrue paid sick time based on hours worked and then use them for paid time off if they or a family member needs care. Beginning July 1, when this benefit goes live, sick time will accrue at a rate of one hour for every 30 hours worked, thus a partner working 23 hours a week can expect to accrue approximately five days of sick time over the course of one year. This benefit offers a national solution for sick time and was designed to match or exceed the benefits some partners are already receiving per recent changes to local requirements.

In addition to the Partner and Family Sick Time benefit, we have expanded our parental leave policy for store partners to include all non-birth parents with up to six weeks of paid leave when welcoming a new child.

Starbucks remains committed in continuing to offer industry-leading comprehensive health care benefits and marketplace, disability and life insurance benefits, a 401K savings plan benefit, and the Starbucks College Achievement Plan.

Staying true to Our Mission and Values will always define Starbucks. This was reinforced last week, when, for the 16th year in a row, Starbucks was recognized by Fortune magazine as one of the most admired companies in the world, this year achieving the #5 rank.

I want to thank all our partners who work so hard to create the Starbucks Experience for every customer we serve. At Starbucks, we have long understood that success is best when it is shared. I hope these announcements illustrate the level of belief and trust we have in you to help us continue to grow our company and one another.

Proud to be your partner,


Infographic: See why Starbucks benefits are three times more valuable than other retailers'

Press Release: Starbucks, a Leader in Industry Retail Benefits, Announces New Investments in Paid Leave, Wage