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Howard Schultz

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For the American television producer, see Howard Schultz (producer).
Howard Schultz
File:Howard Schultz crop.jpg
Schultz in 2018
Born (1953-07-19) July 19, 1953 (age 71)
New York City, New York, U.S.
EducationNorthern Michigan University
(BA)
Occupation(s)Chairman Emeritus, Starbucks
Political partyDemocratic[1]
Spouse
Sheri Kersch
​
(m. 1982)​
Children2
WebsiteOfficial website

Howard Schultz (born July 19, 1953) is an American businessman. He was CEO of Starbucks from 1986 to 2000 and again from 2008 to 2017, as well as its executive chairman from 2017 to 2018. He is a former owner of the Seattle SuperSonics, and was a member of the Board of Directors at Square, Inc.[3] In 1998, Schultz co-founded Maveron, an investment group, with Dan Levitan.[4] He was named by Forbes in 2016 as the 232nd richest person in the United States, with a net worth of $3.1 billion as of April 2017.[5]

Schultz resigned as CEO of Starbucks and took an executive chairman position in April 2017.[6] He was succeeded as CEO by Kevin Johnson.[7] Schultz retired as executive chairman in June 2018, becoming chairman emeritus, amid speculation that he had U.S. presidential ambitions for the 2020 election.[8] In January 2019, that speculation gained steam,[9] culminating on January 27, with Schultz announcing that he would explore a presidential bid as an independent candidate.[10]

Early life and education

Schultz was born to a Jewish family[11] on July 19, 1953, in Brooklyn, New York, the son of Elaine (Lederman) and her husband, ex-United States Army trooper and then truck driver Fred Schultz.[12][13][14] With his younger sister, Ronnie, and brother, Michael, he grew up in the Canarsie Bayview Houses of the New York City Housing Authority. As Schultz's family was poor, he saw an escape in sports such as baseball, football, and basketball, as well as the Boys Club. He went to Canarsie High School, from which he graduated in 1971.[15] Schultz states that he got an athletic scholarship at Northern Michigan University, but there he decided against playing sports.[16] He was the first person in his family to go to college. A member of the Theta-Iota chapter of Tau Kappa Epsilon, Schultz received his bachelor's degree in speech communication in 1975.[13]

The conflicting and seemingly self-contradictory nature of some of Howard Schultz's public descriptions of his early years has received critical attention. Doubts have been raised in particular about his claim to have come from an impoverished family, to have been recruited to play football by a scout from Northern Michigan University, and to have been offered a football scholarship there, at a time when City University of New York provided tuition-free open admission to all New York students.[17][18][19]

Career

After graduating, Schultz worked as a salesman for Xerox Corporation and was quickly promoted to a full sales representative.[13] In 1979, he became a general manager for Swedish drip coffee maker manufacturer, Hammarplast,[12] where he became responsible for their U.S. operations with a staff of twenty.[13] In 1981, Schultz visited a client of Hammarplast, a fledgling coffee-bean shop called Starbucks Coffee Company in Seattle, curious as to why it ordered so many plastic cone filters.[13] He was impressed with the company's knowledge of coffee and kept in contact over the next year, expressing interest in working with them. A year later, he joined Starbucks as the Director of Marketing.[20] On a buying trip to Milan, Italy, for Starbucks, Schultz noted that coffee bars existed on practically every street. He learned that they not only served excellent espresso, they also served as meeting places or public squares; the 200,000 cafés in the country were an important element of Italian culture and society.

On his return, he tried to persuade the owners (including cofounder Jerry Baldwin) to offer traditional espresso beverages in addition to the whole bean coffee, leaf teas and spices they had long offered. After a successful pilot of the cafe concept, the owners refused to roll it out company-wide, saying they did not want to get into the restaurant business. Frustrated, Schultz decided to leave Starbucks in 1985. He needed $400,000 to open the first store and start the business. He simply did not have the money and his wife was pregnant with their first baby. Jerry Baldwin and Starbucks cofounder Gordon Bowker offered to help. Schultz also received $100,000 from a doctor who was impressed by Schultz's energy to "take a gamble".[21] By 1986, he had raised all the money he needed to open the first store, "Il Giornale", named after the Milanese newspaper of the same name. The store offered ice cream in addition to coffee, had little seating, and played opera music in the background to portray an Italian experience. Two years later, the original Starbucks management decided to focus on Peet's Coffee & Tea and sold its Starbucks retail unit to Schultz and Il Giornale for US$3.8 million.

Schultz renamed Il Giornale with the Starbucks name, and aggressively expanded its reach across the United States. Schultz's keen insight in real estate and his hard-line focus on growth drove him to expand the company rapidly. Schultz did not believe in franchising, and made a point of having Starbucks retain ownership of every domestic outlet. On June 26, 1992, Starbucks had its initial public offering and trading of its common stock under the stock ticker NASDAQ-NMS: SBUX. The offering was done by Alex, Brown & Sons Inc. and Wertheim Schroder & Co. Inc.[22]

On June 1, 2000, Schultz stepped down as CEO of Starbucks, moving to the new position of chief global strategist to help the company expand internationally.[23] Privately, the previous 18 years of intensive work to grow the company had exhausted him.[24]

On January 8, 2008, Schultz returned as CEO of Starbucks after an eight-year hiatus.[25] Although the company was growing, that growth was largely dependent on opening new stores, while same-store sales were declining.[24] He fired many executives,[24][26] closed down hundreds of weak stores,[24][26] hired the company's first Chief Technology Officer,[26] introduced the Starbucks Reward Card,[26] and temporarily closed all US locations to retrain employees in making espresso.[26] The company soon returned to organic growth and investor favor.[26] At this time, Schultz was earning a total compensation of $9,740,471, which included a base salary of $1,190,000, and options granted of $7,786,105.[27]

Schultz again stepped down as CEO in December 2016, assuming the position of executive chairman.[26] On June 4, 2018, Schultz announced that he would leave all positions at Starbucks, as he was considering amongst other options a campaign for President amid concerns about income inequality.[28]

Schultz is known for pioneering Starbucks' partnership with Arizona State University, which allows all employees at Starbucks working 20 or more hours a week to qualify for free tuition through ASU's online courses,[29] notable because they have often been documented as having low academic standards and inadequately trained instructors.[30]

On the first of November 2013, it was announced that Schultz had stepped down from the board of Square, to be replaced by former Goldman Sachs executive David Viniar.[31]

Schultz is a significant stakeholder in Jamba Juice.[32]

Ownership of the Seattle SuperSonics and the Seattle Storm

Schultz is the former owner of both the NBA's Seattle SuperSonics and the WNBA's Seattle Storm. During his tenure as the SuperSonics team owner, he was criticized for his naïveté and propensity to run the franchise as a business rather than a sports team.[33] Schultz feuded with player Gary Payton, feeling that Payton disrespected him and the team by not showing up to the first day of training camp in 2002.[34] On July 18, 2006, Schultz sold the team to Clay Bennett, chairman of the Professional Basketball Club LLC, an Oklahoma City ownership group, for $350 million, after having failed to convince the city of Seattle to provide public funding to build a new arena in the Greater Seattle area to replace KeyArena. At the time of the team's sale, it was speculated that the new owners would move the team to their city some time after the 2006–2007 NBA season.[35] On July 2, 2008, the city of Seattle reached a settlement with the new ownership group and the SuperSonics moved to Oklahoma City and became the Thunder for the 2008–09 NBA season.[36] The sale to the out-of-state owners considerably damaged Schultz's popularity in Seattle.[37] In a local newspaper poll, Schultz was judged "most responsible" for the team leaving the city.[38] Before the city of Seattle settled with the Oklahoma City ownership group, Schultz filed a lawsuit against Bennett – in April 2008 – to rescind the July 2006 sale based on what Schultz claimed was fraud and intentional misrepresentation. However, Schultz dropped the lawsuit in August 2008. When Bennett purchased the SuperSonics and its sister franchise in the WNBA, the Seattle Storm, for $350 million, he agreed to a stipulation that he would make a "good-faith best effort" for one year to keep both teams in Seattle. The sincerity of the good-faith effort was widely disputed by the way Bennett acted and by direct quotes from his partner Aubrey McClendon. On January 8, 2008, Bennett sold the Storm to Force 10 Hoops, LLC, an ownership group of four Seattle women, which kept the team in Seattle.[39]

Author

Schultz wrote the book Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time with Dori Jones Yang in 1997. His second book Onward: How Starbucks Fought for Its Life Without Losing Its Soul, co-written with Joanne Gordon, was published in 2011. His third book For Love of Country, co-written with Rajiv Chandrasekaran, was published in 2014.

Comments about the UK economy

Speaking to CNBC in February 2009 about his concerns over the global economic crisis, Schultz said that "the place that concerns us the most is western Europe, and specifically the UK. The UK is in a spiral", expressing concern with the levels of unemployment and consumer confidence in the United Kingdom.[40]

Lord Mandelson, then-British Business Secretary, responded saying that the United Kingdom was "not spiralling, although I've noticed Starbucks is in a great deal of trouble", and suggesting that Schultz was projecting his own company's trouble in the United Kingdom onto the wider national economy.[40]

An official comment from Starbucks read that "It is a difficult economic situation in the US and around the world. Please be assured that Starbucks has no intention of criticising the economic situation in the UK. We are all in this together and as a global business we are committed to each and every market we serve."[40]

Awards and honors

Schultz was awarded the 1999 National Leadership Award for philanthropic and educational efforts to battle AIDS,[41] and the 2004 International Distinguished Entrepreneur Award from the University of Manitoba.[42]

In 2007, he received the First Magazine Limited Responsible Capitalism Award.[43]

On March 29, 2007, Schultz accepted the Rev. Theodore M. Hesburgh, C.S.C., Award for Ethics in Business at the Mendoza College of Business at the University of Notre Dame, and delivered the Frank Cahill Lecture in Business Ethics.[44]

Schultz was named Fortune magazine's 2011 Businessperson of the Year for his initiatives in the economy and job market.[45]

Schultz spoke at the 2017 Arizona State University commencement ceremony and was presented with an honorary Doctor of Humane Letters degree.[46]

In November 2017, the NAACP Legal Defense and Educational Fund presented Schultz with the National Equal Justice Award.[47]

Political views and possible candidacy

In 2012, Schultz began making public statements that led to press speculation that he would run for President of the United States. These included an initiative, announced via an open letter published in various newspapers, that on one day (December 27, 2012), Starbucks employees were asked to write "come together" on all cups distributed, to encourage bipartisanship in the federal government.[48]

There was speculation that he would run in the 2016 U.S. presidential election, but he wrote a New York Times op-ed in August 2015 denying this, stating, "Despite the encouragement of others, I have no intention of entering the presidential fray. I'm not done serving at Starbucks."[49] He ultimately endorsed Democratic candidate Hillary Clinton in that election.[50]

During his 2019 exploratory bid for the presidency, Schultz framed his candidacy as that of a socially liberal deficit hawk.[51] In June 2018, Schultz stated in an interview that he thought the national debt is "the greatest threat domestically to the country".[52] Schultz is a strong proponent of same-sex marriage.[53] Schultz has described Medicare-for-all as "not American."[54] Asked in January 2019 what his healthcare proposal was, Schultz answered, "I don't have a plan today. I'm not yet running for president."[54] Schultz opposed Alexandria Ocasio-Cortez's proposal to raise the marginal tax rate on income over $10 million to 70%, saying it was "punitive" and contrary to the American dream.[54] Schultz said he supported "comprehensive tax reform".[54] He supported a pathway to citizenship for DREAMers.[54] He called for greater border security, but opposed President Trump's proposal of a border wall.[54]

Potential 2020 presidential campaign

After stepping down from Starbucks, political commentators speculated whether Schultz would run in the 2020 United States presidential election,[55][56] including encouragement from a draft movement called Ready For Schultz.[57] In January 2019, Schultz acknowledged that he was exploring a run for president as an independent candidate in 2020.[58] On January 27, he stated in an interview with 60 Minutes that he was exploring a run for president as an independent, and that he considered running as a centrist.[59][10]

Schultz's proposed independent candidacy was widely condemned by Democrats who argued that Schultz's third-party candidacy would help to re-elect President Trump by splitting the vote of those opposed to President Trump.[59][60] President Trump himself appeared to goad Schultz into running, tweeting that Schultz did not have the "guts."[59] University of Virginia political scientist Larry Sabato said that Schultz's candidacy was likely to benefit Trump.[59] In response to claims that his candidacy would benefit Trump, Schultz said, "Nobody wants to see Donald Trump removed from office more than me."[61] Schultz said that there was a great potential for a third-party bid, suggesting that 4 in 10 voters were independent swing voters; NPR described this as misleading, citing political science research showing low rates of swing voting and that the overwhelming majority self-identified independents are actually partisans who are firmly aligned with one party.[62]

Personal life

In 1982, Schultz married Sheri Kersch.[63] They have two children.

Their son Jordan Schultz (born 1986) is a sportswriter for The Huffington Post. Jordan married Breanna Hawes in September 2011; their civil ceremony was followed the same day by a Jewish religious ceremony.[64][65] Their daughter Addison, a social work clinician for the New York Foundling child welfare agency, married Tal Hirshberg on June 24, 2017.[66]

In 1996, Howard and Sheri Schultz co-founded the Schultz Family Foundation, which currently supports two national initiatives.[67] Onward Youth is aimed at promoting employment for young people between the ages of 16 and 24 who are not in school and not working.[68][69] Onward Veterans aims to help post-9/11 military veterans to successfully transition to civilian life.[70]

References

  1. ^ Long, Heather (September 7, 2016). "Starbucks CEO Howard Schultz endorses Hillary Clinton". CNNMoney. Retrieved August 5, 2017.
  2. ^ "Starbucks CEO will see base pay drop to $1 in April". The Oregonian.
  3. ^ Efrati, Amir (August 8, 2012). "Starbucks Invests in Square". The Wall Street Journal.
  4. ^ Arnold, Glen (2008). Corporate financial management. Pearson Education. p. 496. ISBN 978-0-273-71041-7.
  5. ^ "The Richest People in America List - Forbes 400". Forbes. Retrieved September 29, 2017.
  6. ^ Egan, Matt. "Starbucks CEO Howard Schultz to step down". Retrieved June 4, 2018.
  7. ^ Whitten, Everett Rosenfeld, Sarah (December 1, 2016). "Howard Schultz stepping down as Starbucks CEO; current COO to replace him". CNBC. Retrieved December 2, 2016.{{cite web}}: CS1 maint: multiple names: authors list (link)
  8. ^ "Howard Schultz to Step Down as Starbucks Executive Chairman". June 4, 2018. Retrieved June 4, 2018 – via NYTimes.com.
  9. ^ "Former Starbucks chief Howard Schultz exploring independent 2020 bid". Retrieved January 22, 2019.
  10. ^ a b Emily Birnbaum (January 27, 2019). "Howard Schultz makes Twitter debut amid 2020 speculation". The Hill. Retrieved January 27, 2019.
  11. ^ New York Times: "New Economy; How Starbucks was put on the defensive by an attack on the Internet rumor mill that would not go away" By Sherri Day June 2, 2003
  12. ^ a b Melissa Thompson (August 5, 2010). "Starbucks' Howard Schultz on how he became coffee king". Sunday Mirror.
  13. ^ a b c d e Howard is constantly reminding his team, "We are not in the coffee business serving people; we are in the people business serving coffee."Kellogg School of Management: "Howard Schultz and Starbucks Coffee Company" by Nancy F. Koehn November 28, 2011. Archived January 4, 2014.
  14. ^ "Howard Schultz: I raise my frappuccino to the Brits". Retrieved June 4, 2018.
  15. ^ "Howard Schultz". jewishvirtuallibrary.org. Retrieved March 20, 2012.
  16. ^ Taylor, Kate (December 13, 2017). "From Brooklyn to Billionaire: The Story of How Howard Schultz Transformed Starbucks Into an $84 Billion Business". Inc. Retrieved January 30, 2019.
  17. ^ "Imagination, Dreams, and Humble Origins". New York Times. Retrieved January 29, 2019.
  18. ^ "My Journey". Howard Schultz. Retrieved January 29, 2019.
  19. ^ "Taking Howard Schultz Seriously". Lawyers, Guns, and Money. Retrieved January 29, 2010.
  20. ^ "Howard Schultz Secrets for Success. Dan Skeen. Success Television". Archived from the original on July 16, 2011. Retrieved August 22, 2011. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  21. ^ Mullins, John (2007). The New Business Road Test.
  22. ^ "STARBUCKS COFFEE ANNOUNCES INITIAL PUBLIC OFFERING - Free Online Library". thefreelibrary.com.
  23. ^ "Starbucks CEO steps down". [CNN Money]]. CNNfn. April 6, 2000. Retrieved June 5, 2018.
  24. ^ a b c d "Why did Howard Schultz leave Starbucks, only to return eight years later? (SBUX)". Investopedia. Retrieved June 5, 2018.
  25. ^ [1] Archived January 17, 2008, at the Wayback Machine
  26. ^ a b c d e f g Taylor, Kate (December 4, 2016). "Here's what happened the last time Howard Schultz stepped down as Starbucks CEO". Business Insider. Retrieved June 5, 2018.
  27. ^ 2008 CEO Compensation for Howard Schultz Archived August 14, 2009, at the Wayback Machine, Equilar.com
  28. ^ Meyersohn, Nathaniel (June 4, 2018). "Howard Schultz steps down at Starbucks, may consider run for president". CNN Money. Retrieved June 5, 2018.
  29. ^ "Howard Schultz: How to do good and do good business | Masters of Scale podcast". WaitWhat. Retrieved March 20, 2018.
  30. ^ "Don't Buy The Arizona State Report On Digital Learning". Forbes. Retrieved January 27, 2019.
  31. ^ Kate Taylor (November 1, 2013). "Starbucks CEO Howard Schultz Steps Down From Square's Board of Directors". Entrepreneur.
  32. ^ "Research Information on Jamba Juice" (PDF). Retrieved August 22, 2011.
  33. ^ "Why Schultz tuned out and sold out the Sonics". Sports.espn.go.com. July 21, 2006. Retrieved August 22, 2011.
  34. ^ Jason Notte (February 1, 2014). "Seattle Super Bowl Scores Points for Paul Allen, Sacks Howard Schultz". TheStreet.com.
  35. ^ seattletimes.nwsource.com. URL last accessed July 18, 2006.
  36. ^ "Sonics are Oklahoma City-bound". seattlepi.com. July 2, 2008. Retrieved August 22, 2011.
  37. ^ "Sonics Settlement". Mynorthwest.com. April 6, 2011. Retrieved November 24, 2011.
  38. ^ "Poll Results". Archived from the original on January 31, 2011. Retrieved February 13, 2011. {{cite web}}: Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
  39. ^ Allen, Percy (April 15, 2008). "Howard Schultz plans to sue Clay Bennett to get Sonics back". The Seattle Times. Archived from the original on April 19, 2008. {{cite news}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  40. ^ a b c Wintour, Patrick (February 19, 2009). "Mandelson and Starbucks clash on UK economy". The Guardian. London. Retrieved March 18, 2009.
  41. ^ Howard M. Schultz Biography Businessweek Data is as current as the most recent Definitive Proxy
  42. ^ "IDEA Recipients". Google.com. Retrieved August 22, 2011.[permanent dead link]
  43. ^ "The FIRST International Award for Responsible Capitalism".
  44. ^ Frank Cahill Lecture, March 29, 2007
  45. ^ "2011 Businessperson of the Year - 1. Howard M. Schultz (2) - FORTUNE". Money.cnn.com. November 17, 2011. Retrieved November 24, 2011.
  46. ^ "Starbucks Chairman and CEO Howard Schultz to speak at ASU commencement". ASU Now: Access, Excellence, Impact. March 13, 2017. Retrieved March 23, 2017.
  47. ^ "The Moment is Now: NAACP legal 31st Annual National Equal Justice Awards | NAACP LDF". www.naacpldf.org. Archived from the original on December 22, 2017. Retrieved December 20, 2017. {{cite web}}: Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
  48. ^ Amira, Dan (December 26, 2012). "Starbucks CEO Howard Schultz Needs to Run for President Already". New York Magazine Intelligencer blog.
  49. ^ Brown, Abram (August 6, 2015). "Starbucks CEO Howard Schultz Won't Run For President". Forbes.
  50. ^ Long, H. CNN September 7, 2016.
  51. ^ "Howard Schultz says he can win the support of a 'silent majority.' The 'silent majority' doesn't really exist". The Washington Post. 2019.
  52. ^ Breuninger, Kevin (June 5, 2018). "Howard Schultz: The $21 trillion national debt is the 'greatest threat domestically to the country'". CNBC.
  53. ^ Allen, Frederick E. "Howard Schultz to Anti-Gay-Marriage Starbucks Shareholder: 'You Can Sell Your Shares'". Forbes. Retrieved April 24, 2016.
  54. ^ a b c d e f CNN, Veronica Stracqualursi. "Schultz defends criticism of Medicare-for-all proposal". CNN. Retrieved January 30, 2019. {{cite web}}: |last= has generic name (help)
  55. ^ Gelles, David (June 4, 2018). Schultz 2020? Other C.E.O.s Will Be Watching Closely The New York Times. Retrieved December 6, 2018.
  56. ^ Schwartz, Brian (November 9, 2018). Former Starbucks CEO Howard Schultz assembles an elite PR team as he considers running for president CNBC. Retrieved December 6, 2018.
  57. ^ "Ready for Schultz 2020". readyforschultz.com.
  58. ^ Eli Watkins; Maeve Reston; Cristina Alesci; Poppy Harlow (January 21, 2019). "Former Starbucks chief exploring independent 2020 bid". CNN. Retrieved January 21, 2019.
  59. ^ a b c d "Starbucks tycoon roasted over 2020 plan". January 29, 2019. Retrieved January 30, 2019.
  60. ^ "Democrats Say Possible Howard Schultz Presidential Bid Could Help Trump Win Second Term". Fortune. Retrieved January 30, 2019.
  61. ^ Higgins, Tucker (January 28, 2019). "Howard Schultz says his presidential run won't boost Trump". www.cnbc.com. Retrieved January 30, 2019.
  62. ^ "Why Howard Schultz's Independent Bid For President Is A Radical Idea". NPR.org. Retrieved January 30, 2019.
  63. ^ "Meet Mrs. Schultz". Retrieved January 19, 2019.
  64. ^ New York Times: "Breanna Hawes, Jordan Schultz" September 9, 2011
  65. ^ London Daily Mail: "Nice wedding present for the 1%: Starbucks CEO buys son and his new bride $4.6m New York condo" by Daniel Bates November 10, 2011
  66. ^ "Howard Schultz' daughter gets married". The New York Times. June 2017.
  67. ^ Anders, George. "Howard Schultz's Stormy Crusades: The Starbucks Boss Opens Up". forbes.com.
  68. ^ "Starbucks and Other Corporations to Announce Plan to Curb Unemployment of Young People". The New York Times. July 13, 2015.
  69. ^ "Connecting Young People With Jobs". The New York Times. July 13, 2015.
  70. ^ "Starbucks's Schultz Opens New Front in Helping Veterans Enter Work Force". philanthropy.com. March 23, 2015.

Further reading

  • Schultz, Howard; Yang, Dori Jones (1997). Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time. Hyperion.
  • Schultz, Howard; Gordon, Joanne (2011). Onward: How Starbucks Fought for Its Life without Losing Its Soul. Rodale.
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