Two important advisor groups have suggested that people who own shares in Starbucks should support the company's choices for its board. This gives Starbucks a big win in its fight with a group backed by unions, who had their list of people they wanted on the board.
Advisory Firms Back Starbucks Board Picks
Two major advisory groups, Institutional Shareholder Services (ISS) and Glass Lewis, have urged shareholders to vote for the 11 people Starbucks wants on its board. This advice is a big deal because many big investors listen to these groups when deciding how to vote.
ISS praised Starbucks for always paying attention to what its shareholders want, even when things get tough. According to what Starbucks said, ISS believes the company's board is ready and able to handle issues, including those about unions, in a way that's best for the people who own shares.
Glass Lewis agreed, suggesting that shareholders should support the people Starbucks has chosen to lead.
In a report obtained by Reuters, advisory firm Glass Lewis expressed skepticism about the Strategic Organizing Center's (SOC) campaign to change Starbucks' board. Glass Lewis believes the campaign is too narrow-minded and doesn't make a strong enough case for the changes it wants.
The firm noted that Starbucks has been relatively open and responsive to concerns about wages, working conditions, and labor issues in general.
Shareholders are set to vote on these matters on March 13 unless Starbucks and the SOC agree on that date.
Starbucks Board Fight Focuses on Key Issues
This showdown has captured a lot of attention as it's one of the first times a battle for control of a company's board has centered around topics like environmental care, social responsibility, and good governance instead of just money matters.
Although only a few of Starbucks' workers are part of a union, the push for unionization has been picking up, with around 370 stores choosing to unionize since 2021.
This week, both Starbucks and the union have agreed to start discussions. They hope to work out workers' rights deals and settle ongoing legal battles.
Starbucks praised the support from the Institutional Shareholder Services (ISS) on Thursday, but the group of unions didn't agree with ISS's backing.
The upcoming vote on Starbucks' board is mainly about how the company has handled its employees' push to unionize. The Strategic Organizing Center (SOC) claims that Starbucks' reaction to the unionization efforts has hurt its reputation, especially among younger customers, and calls for better leadership from the board.
However, Starbucks counters by highlighting its significant investments in worker pay and benefits in the last two years and its plans to enhance store operations.
In a move towards cooperation, Starbucks and Starbucks Workers United, the union organizing many of its U.S. stores, have agreed to work on a plan for collective bargaining.
Under the leadership of new CEO Laxman Narasimhan, the company has seen significant changes, including introducing five new independent board members out of ten over the past year.
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