Starbucks Investors Urge Shareholders to Vote No on Board Director Nominees Due to Failed Labor Relations Oversight

New York, NY – Today, several long-term Starbucks Corporation (SBUX) investors launched a campaign to urge shareholders to vote against the re-election of Starbucks Lead Independent Board Director Jørgen Vig Knudstorp and Chair of the Nominating and Corporate Governance Committee Beth Ford for failed labor relations oversight at the company’s upcoming annual shareholder meeting. Absent a constructive relationship between Starbucks and its unionized workforce, the investors note that the company may be unable to sustain its turnaround. While recent improvement in quarterly results is welcome news, declining communication with investors and sudden changes to Board oversight of labor relations, such as eliminating the Environmental, Partner, and Community Impact (EPCI) Committee send a troubling message to shareholders.

The investors, consisting of New York City Comptroller Mark Levine, on behalf of the five New York City public pension systems, New York State Comptroller Thomas DiNapoli, on behalf of the New York State Common Retirement Fund, Merseyside Pension Fund, Shareholder Association for Research and Education (SHARE), SOC Investment Group, and Trillium ESG Global Equity Mutual Fund, urged shareholders to vote against the election of Directors Knudstorp and Ford in a letter issued today, ahead of the company’s March 25^th annual general meeting.

The three main areas of concern for the investors, which warrant a vote against both directors, are: significant labor relations risk oversight failures, the Board’s backsliding on labor relations oversight amid escalating labor conflict, and prolonged labor conflict counter to turnaround objectives, jeopardizing long-term shareholder value.

Directors Knudstorp and Ford have held various Board roles that are responsible for Board structure and investor engagement. During their tenure overseeing labor relations, the Board failed to manage a material risk it acknowledged and addressed with a dedicated committee, only to quietly backtrack at a moment when labor conflict is escalating. As lead independent director, Mr. Knudstorp is responsible for ensuring that the Board exercises effective, independent oversight. And as Chair of the recently dissolved EPCI Committee, which also included Mr. Knudstorp, Ms. Ford had leadership responsibility for oversight of workforce risks and ensuring the company is well positioned to address these risks.

Efforts to unionize and reach a first contract with Starbucks began in late 2021 and the company has faced hundreds of charges of labor rights violations with the National Labor Relations Board in the first three years of organizing. However, the company made encouraging progress to meaningfully address these issues. In 2023, the company agreed to implement a majority-supported shareholder proposal and commissioned an independent third-party workers’ rights assessment. Following this assessment, Starbucks adopted a framework for engagement with Starbucks Workers United, which has led the organizing efforts, and set a goal of completing bargaining and union contract ratification by the end of 2024.

Despite these positive steps forward, stalled labor negotiations, intensified operational and reputational risks, and elimination of the ECPI Committee amid escalating labor unrest has signaled a retreat of its efforts and heightened investor concern. Today, hundreds of Starbucks baristas remain on strike seeking a first contract with the company, potentially impacting the reputational value of the company.

While Starbucks’ turnaround plan is welcome news, long-term investors are concerned by the appearance of ignoring the company’s very serious persistent labor relations issues. In the letter, the investors note “the sudden U-turn on labor relations oversight by Starbucks’ Board is inconsistent with the Company’s turnaround strategy and commitments.”

Shareholders are urged to ‘vote no’ on the reelection of both Directors at the company’s annual general meeting on March 25, 2026.

“Starbucks’ unionized baristas help keep the coffee brewing and the company going, but for too long the Board has failed to ensure that management treats them with the respect they deserve,” said New York City Comptroller Mark Levine. “Directors Knudstorp and Ford are setting the wrong tone at the top. Shareholders deserve transparency and accountability of the Board’s labor relations oversight, which is lacking at Starbucks. Today New York City’s public pension funds and other long-term investors are making it clear that the very turnaround plan the company touts will be difficult to fully achieve or sustain without constructive labor relations.”

“After months of labor strife, Starbucks committed to strengthening labor relations with Starbucks Workers United with the ambition to reach a contract by the end of 2024,” said New York State Comptroller Thomas P. DiNapoli. “I’m deeply disappointed that Starbucks failed to achieve this goal and has not resolved this dispute. I’m urging fellow shareholders to vote against the re-election of two board members for their continued failures to oversee better labor relations.”

“Mr. Knudstorp and Ms. Ford have failed to effectively oversee labor relations in their respective roles, as we continue to see ongoing labor unrest and the reputational and operational risks that come with it,” said Juana Lee, Associate Director of Corporate Engagement at SHARE. “Concerns regarding labor relations at Starbucks is not a new issue for investors. Following Starbucks’ quiet dismantling of a standing board committee tasked with labor relations oversight without warning or adequate explanation, shareholders should send a message to Starbucks’ Board by voting no against both directors.”

“Starbucks’ board appears to be ‘quiet quitting’ on their oversight of labor relations. The company committed to getting a final contract with its unionized baristas by the end of 2024. That deadline has long since passed,” said Tejal Patel, Executive Director of the SOC Investment Group. “Instead we and other investors have watched as the bargaining process has gradually deteriorated, board level oversight mechanisms have been quietly removed, and Starbucks’ directors have slowly distanced themselves from engaging with investors on this topic.”

“Shareholders expect – and deserve – a board that strengthens oversight when risks intensify, not one that dismantles the very committee responsible for monitoring them,” said Jonas D. Kron, Chief Advocacy Officer at Trillium Asset Management. “The board’s rollback of the EPCI Committee amid unresolved labor issues is a red flag. A vote against these directors is necessary to send a message that these kinds of governance failures are unacceptable.”

The full letter to shareholders can be read at: https://comptroller.nyc.gov/reports/letter-to-investors-urging-a-vote-against-the-re-election-of-starbucks-directors

In addition to Comptroller Levine, trustees of the five New York City public pension funds are as follows:

Teachers’ Retirement System of the City of New York (TRS): Mayor Zohran Mamdani’s appointees: Bryan Berge, Director, Mayor’s Office of Pension and Investments, and Joseph Borelli; Greg Faulkner, Chair, New York City Public Schools Panel for Educational Policy; and Thomas Brown (Board Chair), Victoria Lee, and Christina McGrath, all of the United Federation of Teachers.

New York City Employees’ Retirement System (NYCERS): Mayor Zohran Mamdani’s representative Bryan Berge, Director, Mayor’s Office of Pension and Investments (Board Chair); New York City Public Advocate Jumaane Williams; Borough Presidents: Donovan Richards Jr. (Queens), Antonio Reynoso (Brooklyn), Vanessa L. Gibson (Bronx), Brad Hoylman-Sigal (Manhattan), and Vito Fossella (Staten Island); Henry Garrido, Executive Director, District Council 37, AFSCME; John Chiarello, President, Transport Workers Union Local 100; and Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.

New York City Police Pension Fund (Police): Mayor Zohran Mamdani’s representative Bryan Berge, Director, Mayor’s Office of Pension and Investments; New York City Police Commissioner Jessica Tisch (Board Chair); New York City Acting Finance Commissioner Jeffrey Shear; Patrick Hendry, President, Albert Alcierno, First Vice President, Betty Carradero, Second Vice President and Mike Freeman, Chair, all of the NYC Police Benevolent Association; Chris Monahan, President, Captains Endowment Association; Louis Turco, President, Lieutenants Benevolent Association; Vincent Vallelong, President, Sergeants Benevolent Association; and Scott Munro, President, Detectives Endowment Association.

New York City Fire Pension Fund (Fire): Mayor Zohran Mamdani’s representative Bryan Berge, Director, Mayor’s Office of Pension and Investments; New York City Fire Commissioner Lillian Bonsignore (Board Chair); New York City Acting Finance Commissioner Jeffrey Shear; Andrew Ansbro, President, Robert Eustace, Vice President, Chris Viola, Treasurer, and Dennis Tveter, Chair, Uniformed Firefighters Association of Greater New York; Sean Michael, Chief’s Rep., Liam Guilfoyle, Captain’s Rep., and Joe Camastro, Lieutenants’ Rep., all of the Uniformed Fire Officers Association; and John Young, President, Marine Engineers Association.

Board of Education Retirement System of the City of New York (BERS): Members of the New York City Public Schools Panel for Educational Policy, including: Borough President Appointees Shirley Aubin (Queens), Camille Casaretti (Brooklyn), Rima Izquierdo (Bronx), and Aaron Bogad (Staten Island); Elected CEC Members Adriana Alecia (Queens), Faraji Hannah-Jones (Brooklyn), Naveed Hasan (Manhattan), Brenida Parsons (Bronx), and Debra Altman (Staten Island); Mayoral appointees Joseph Borelli, Marjorie Dienstag, Amy Fair, Gregory Faulkner, Anita Garcia, Anthony Giordano, Dr. Angela Green, Alice Ho, Yadira Jimenez, Jessamyn Lee, Sharon Odwin, Alan Ong, Phoebe Sade-Arnold, and Maisha Sapp; New York City Public Schools Chancellor Kamar Samuels, represented by Karine Apollon (Board Co-Chair); as well as two elected employee members: Donald Nesbit, District Council 37, Local 372 (Board Co-Chair) and Frank Sirabella, IUOE Local 891.

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