New Starbucks CEO Raises Eyebrows With Jet Travel Deal

Starbucks is creating waves by allocating $250,000 per year for its new CEO Brian Niccol to commute from his home in Newport Beach, California, to company headquarters in Seattle in company aircraft. According to the company’s “offer letter” to the former Chipotle top executive, quoted in an article in Nation’s Restaurant News, and which was publicly submitted to the U.S. Securities and Exchange Commission, “You agree to commute from your residence to the company headquarters (and engage in other business travel) as is required to perform your duties and responsibilities.” The letter further provides that Niccol, who was recently named to the high-profile Starbucks CEO slot, will be eligible to use company aircraft (a pair of Gulfstream G550s) “up to a maximum amount of $250,000 per year, which amount will be based on the aggregate incremental cost to the company.” The quarter-million-dollar allowance also includes some personal travel, according to the offer letter.

But that allowance won’t come close to covering the three-times-per-month Seattle trips that reports have said the new CEO will be making.

According to industry estimates, the cost to operate a G550 ranges from $12 to $15 per mile, for annual usage of 200 to 400 hours, respectively. The difference is attributed to fixed annual costs such as crew salary, insurance, hangarage, etc., as opposed to hourly costs, such as fuel, maintenance, depreciation, etc. With the distance from Newport Beach to Seattle at roughly 1,000 miles, a round-trip runs between $24,000 to $30,000. That would account for roughly just eight to 10 company-covered trips between Newport Beach and Seattle per year.

Niccol’s annual salary is reported as $1.6 million, with the potential of an additional $23 million in share-based bonuses and a cash bonus of up to $3.6 million based on performance.