Indian-origin business executive Laxman Narasimhan took over as the Chief Executive Officer (CEO) of American coffee giant Starbucks on Monday, 20 March.
The company had announced in September last year that Narasimhan will be succeeding Howard Schultz, who was the interim CEO.
"Narasimhan will join Starbucks as incoming CEO on 1 October 2022 after relocating from London to the Seattle area and will work closely with Howard Schultz, interim CEO, before assuming the CEO role and joining the Board on 1 April 2023," read the official statement released by Starbucks.
His joining comes at a time when unionised workers are asserting their demand for an increase in the minimum wage, with Starbucks being one of the companies in the spotlight.
With Narasimhan joining the company, he will be spending time with Schultz, the management team, partners, and customers and gaining in-depth exposure to the brand, company culture, and the 'reinvention plan'.
As per a report by Reuters, his 'reinvention plan' includes paying better wages to baristas, improving employee welfare and customer experience, and re-imagining stores.
Here is a look at Narasimhan's professional life, as we trace his journey to Starbucks' top executive post.
Life in India & Education
Born in Pune in 1967, Narasimhan pursued mechanical engineering at the College of Engineering, University of Pune. While recalling the death of his sibling at an early age, he described his childhood as 'tough', in an interview given to The Sunday Times.
He further said that while growing up in India, "you learn resilience, you learn tolerance, you learn to find a way through."
After completing his under-graduation in India, he moved to the United States to study MA in German and International Studies at the University of Pennsylvania. He also has an MBA degree in Finance from the Wharton School at the University of Pennsylvania.
Journey Through Various MNCs
After completing his education, Narasimhan joined McKinsey & Company, where he held several positions around the world until 2012.
As per the World Economic Forum, after McKinsey & Company, he moved on to join PepsiCo Americas Foods, where he served as the senior vice-president and CFO, eventually moving on to PepsiCo Latin America as the chief executive officer.
"He has worked across multiple industries, including consumer, retail, energy, manufacturing, technology and healthcare; he has led assignments in the public sector particularly in education and skill building. He is a Trustee of the Brookings Institution, a member of the Council on Foreign Relations, a fellow of the Foreign Policy Association, and is an Advisory Board member of the Jay H. Baker Retailing Center at the Wharton School, University of Pennsylvania," WEF added.
In 2019, Narasimhan took over as the chief executive officer of Reckitt Benckiser, the British conglomerate that produces health, hygiene, and nutrition products.
At Reckitt, Narasimhan was given the task to cut costs while investing in Reckitt's supply chains and product research, as the company was struggling with slowing sales, reported The New York Times.
He "sold underperforming divisions, and scrapped a potential breakup of the company," the report added.
"Under Laxman, Reckitt has a newfound confidence – investors seem to be convinced that everything is going in the right direction," Bernstein analyst Bruno Monteyne said, as quoted by The Globe and Mail.
Why Did Starbucks Hire Narasimhan?
In view of unionisation and higher costs for ingredients and labour, Narasimhan is expected to lead the company in its shift towards focusing on mobile pickup and delivery rather than in-person dining, the report added.
More than 200 Starbucks stores have unionised in the US demanding improved benefits and wages. Moreover, China's 'Zero COVID' policy, leading to frequent lockdowns, has impacted sales of the company, the report added.
Reacting to Starbucks' announcement of its new CEO, Credit Suisse analyst Eamonn Ferry said that "he (Narasimhan) has no direct experience in coffee, so you could question that. However he does hold a deep understanding of the consumer and this is far more important."
As per a regulatory filing, Narasimhan as the CEO will get an annual base salary of $1.3 million. He will also receive a $1.6 million cash signing bonus and a replacement equity grant with a target value of $9.24 million to make up for incentives that he's forfeiting by leaving Reckitt, reported Bloomberg.
(With inputs from Reuters, The Sunday Times, The New Your Times, The Globe and Mail, and Bloomberg.)
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