Exiting Starbucks, Schultz Opens the Door to a Run for Office
Posted June 4, 2018 8:53 p.m. EDT
SEATTLE — Howard Schultz, the outspoken executive chairman of Starbucks, will leave the company at the end of the month, bringing to an end the tenure of a socially conscious entrepreneur who turned a local Seattle coffee chain into a global giant with more than 28,000 stores in 77 countries.
Schultz’s decision to retire, a plan he said he privately outlined to the board a year ago, will most likely stoke speculation that he is considering a run for president in 2020. He is frequently mentioned as a potential candidate for the Democratic Party and has become increasingly vocal on political issues, including criticizing President Donald Trump last year as “a president that is creating episodic chaos every day.”
While Schultz, 64, typically bats away speculation about his political ambitions with an eye roll or a pithy answer, on Monday he acknowledged for the first time that it is something he may consider.
“I want to be truthful with you without creating more speculative headlines,” he told The New York Times. “For some time now, I have been deeply concerned about our country — the growing division at home and our standing in the world.”
“One of the things I want to do in my next chapter is to figure out if there is a role I can play in giving back,” he continued. “I’m not exactly sure what that means yet.”
Asked directly if he was considering running for president, he said, “I intend to think about a range of options, and that could include public service. But I’m a long way from making any decisions about the future.”
Schultz said he and the board had expected to announce his departure last month, but that plan was upended after an episode at a Philadelphia store in mid-April in which two black men were arrested after waiting inside one of the company’s stores without making a purchase. Last week, Starbucks closed all of its company-owned stores around the country for four hours for a racial bias training, a program that Schultz had spearheaded.
The possibility that Schultz, who has spent three decades leading Starbucks, could run for president has become far more realistic with the election of Trump, a real estate developer and reality-television star before his political career.
Trump’s successful candidacy has set off a wave of speculation about business leaders eyeing a shot at the White House. Robert Iger, Disney’s chief executive, publicly said he had been considering running for president until he struck a deal to buy 21st Century Fox. Jamie Dimon, chief executive of JPMorgan Chase, is also thought of as a possible candidate, and Mark Cuban, the billionaire owner of Dallas Mavericks NBA team, has said he planned to consider running as Republican, but would need to convince his wife first.
“She asked me if I want to stay married,” Cuban said last November.
Under Schultz’s leadership, Starbucks has waded into debates over social issues such as gay rights, race relations, veterans’ rights, gun violence and student debt. Schultz was an early champion of the idea of a corporate executive as a moral leader as he sought to achieve what he described as “the fragile balance between profit and conscience.”
Still, Schultz cautioned against reading too much into his decision to leave Starbucks. “I want to be of service to our country, but that doesn’t mean I need to run for public office to accomplish that,” he said.
He stepped away from the chief executive role at Starbucks last April, handing the reins to Kevin Johnson. It was the second time that Schultz had made that move, having given up the role in 2000 to become chairman, only to return to the chief executive position eight years later.
His latest departure, however, is a greater separation than before. Myron E. Ullman, the former chairman of J.C. Penney, will become Starbucks’s new chairman and Schultz will be given an honorary title of chairman emeritus.
Schultz said he planned to work on his family foundation and write a book about “social impact work and the efforts to redefine the role and responsibility of a public company.”
Bill Gates, the co-founder of Microsoft whose father was the lawyer who helped Schultz buy Starbucks in 1987, said: “Howard has built an amazing organization in Starbucks and it’s exciting to consider what he might accomplish philanthropically.”
On Monday, just hours before Schultz planned to send a letter to the company’s 350,000 employees around the world announcing his decision, he visited Starbucks’ first store at Pike Place Market for the last time as its leader.
“I’ve been doing this for almost 40 years,” he said. “Taking my green apron off is hard. It is emotional. More emotional than I thought it would be.”
“I told myself a long time ago that if I was ever going to explore a second act, I couldn’t do it while still at the company,” he added. Schultz’s legacy as an entrepreneur will be defined as much for his vision to create a global coffee chain as it will be for his progressive approach to running the company — or as he has often said, “to build the company my father never got to work for.”
Schultz, who grew up grew up in the Canarsie section of Brooklyn, said watching his father, a World War II veteran who became a truck driver and later a taxi driver, struggle to make enough money to pay for basics had led him to offer complete health benefits for full- and part-time employees and their domestic partners, a first for such a chain. He later provided stock options for part-time workers and offered to cover college tuition for students enrolled in online courses at Arizona State University.
“Howard proved that a company could be more successful and profitable by elevating humanity,” said Mellody Hobson, president of Ariel Investments and a Starbucks director who will become vice chairwoman when Schultz steps down.
Under Schultz, the company’s financial success has been immense. Shares of Starbucks have risen 21,000 percent since the company’s initial public offering in 1992; an investor who had put in $10,000 then would have more than $2 million today. Still, Schultz’s progressive approach to management has not been without criticism. The company announced two weeks ago that it would let customers and noncustomers alike use its restrooms following the incident in Philadelphia, and it was soon criticized by some as putting its store managers in increasingly complex and difficult situations that they may not be properly trained to handle.
And Trump has criticized Starbucks as trying to be too politically correct, bashing the company for no longer selling Christmas-themed cups. “Maybe we should boycott Starbucks?” Trump said on the campaign trail.
For Starbucks, Schultz’s departure will most likely be seen — both internally and externally — as a new challenge. While Schultz had already handed over the chief executive title to Johnson, he largely remained the face of the company as he continued to champion the idea of Starbucks as “the third place” — a meeting ground between home and work that he modeled from coffee bars in Italy after he took a trip there in 1983.
Starbucks itself is transitioning in the United States from a fast-growing company to one that’s more likely to rise and fall with the rest of the economy. Still, it is growing wildly in China, where it is planning to open as many as two new stores a day. It is one of the few American companies that operate in China without a local partner.
Schultz, however, said his decision to leave now — even after the episode in Philadelphia — illustrated the complete confidence he had in Johnson, the company’s top management and its board.
“The timing was never going to be perfect,” he said.
At the original Pike Place Market store early Monday, with only a handful of customers looking on, Schultz leaned over to inscribe the wall next to an espresso bar he installed himself in 1987: “This is where it all began. My dream to build a company that fosters respect and dignity and create a place where we can all come together over a cup of coffee. Onward with love.”