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Howard Schultz

Howard Schultz in Vancouver on March 1, 2007
Born July 19, 1953 (1953-07-19) (age 56)
Brooklyn, New York, U.S.
Alma mater Northern Michigan University
Occupation Chairman and CEO, Starbucks
Salary US$ 10,000[1]
Net worth $1.1 Billion
Spouse(s) Sheri Kersch Schultz
Children 2
Website
Starbucks

Howard Schultz (born July 19, 1953) is an American businessman, and entrepreneur best known as the chairman and CEO[2] of Starbucks and a former owner of the Seattle SuperSonics. Schultz co-founded Maveron, an investment group, in 1998 with Dan Levitan.

In 2006, Forbes Magazine ranked Schultz as the 354th richest person in the United States, with a net worth of $1.1 billion dollars.

Contents

Biography

Howard Schultz was born on July 19, 1953 in Brooklyn, New York, growing up in the Canarsie Bayview Housing Projects. Schultz was poor growing up, so to escape the thoughts of being poor, he turned to sports such as baseball, football, and basketball.He went to Canarsie High School where he graduated in 1971. In high school, Schultz excelled at sports and was awarded an athletic scholarship to Northern Michigan University, the first person in his family to go to college. A member of Tau Kappa Epsilon, in 1975 Schultz received his bachelor's degree in business and marketing.

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Career

After graduating, he worked a variety of jobs, until becoming a salesperson for Xerox Corporation. In 1979 he became a general manager for Swedish drip coffee maker manufacturer, Hammarplast.

In 1981, Schultz's traveled to Seattle to check out a popular coffee bean store chain called Starbucks, that had been buying Hammarplast coffeemakers. In 1982, he joined Starbucks Coffee Company in Seattle as the Director of Marketing[citation needed].

After joining Starbucks, while Schultz was on a buying trip to Milan, Italy, he 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; they were a big part of Italy's societal glue, and there were 200,000 of them in the country.

On his return, he tried to persuade the owners (including 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 didn't want to get into the restaurant business. Frustrated, Schultz started his own coffee shop named Il Giornale in 1985. 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 $3.8 million.

Schultz renamed Il Giornale with the Starbucks name and aggressively expanded Starbucks' reach across the United States. Schultz's keen insight in real estate and his insatiable appetite for coffee drinks drove him to grow the company rapidly. Schultz didn't believe in franchising, so made a point of having Starbucks own every domestic outlet with one exception. Schultz also went 50-50 with Magic Johnson on stores in minority communities. Schultz is also a significant stakeholder in Jamba Juice.[citation needed]

On January 8, 2008 Schultz regained his status as CEO of Starbucks after a hiatus of 8 years.[3] While CEO of Starbucks in 2008, Schultz earned a total compensation of $9,740,471, which included a base salary of $1,190,000, and options granted of $7,786,105.[4]

Schultz co-authored a book called Pour Your Heart into It that expounds on his life journey with Starbucks[citation needed]. In his book Schultz admits that he was afraid that "Starbucks may become another soulless big chain."

Sports

Schultz is also the former owner of the NBA's Seattle SuperSonics. During his tenure as team owner, he was criticized for his naivete and propensity to run the franchise like a business instead of a sports team.[5]. Schultz was known for wearing his emotions on a heartstring and was often spotted at games slouching in his chair when the team was not doing well. He also feuded with big name star Gary Payton, feeling that Payton disrespected him and the team by not showing up to the first day of training camp in 2002.

On July 17, 2006, it was announced that Schultz sold the team to a group of businessmen from Oklahoma City for $350 million. It was speculated that the new owners would move the team to their city some time after the 2006-2007 NBA season.[6] On July 3, 2008, the City of Seattle reached a settlement with the new ownership group and the Sonics did, in fact, move to Oklahoma City.[7] The sale to the out-of-state owners considerably damaged Schultz' popularity in Seattle.[8] In a local newspaper poll, Schultz was judged "most responsible" for the team leaving the city, winning 42% of the vote.[9] Howard Schultz filed a lawsuit against Sonics chairman Clay Bennett, in April 2008, to rescind the July 2006 sale based on fraud and intentional misrepresentation. However, Schultz dropped the lawsuit in August 2008. When Bennett purchased the Sonics 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 1 year to keep both teams in Seattle. He has since sold the Storm to four Seattle women who will keep the team in Seattle.[10]

Comments about the UK economy

Schultz said to a cable TV channel in February 2009 about his concerns on the economy that "the place that concerns us the most is western Europe, and specifically the UK. The UK is in a spiral." He added that his main concerns were "Unemployment, the sub-prime mortgage crisis, particularly in the UK, and consumer confidence, particularly in the UK, is very, very poor."

Lord Mandelson, the UK Business Secretary, responded saying Britain was "not spiralling, although I've noticed Starbucks is in a great deal of trouble - but that might be because of their over-expansion, given the state of the market." Mandelson was later overheard at a drinks reception, saying: "Why should I have this guy running down the country? Who the is he? How the hell are they [Starbucks] doing?"

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."[11]

Awards

In 1998, Schultz was awarded the "The Israel 50th Anniversary Tribute Award" from the Jerusalem Fund of Aish Ha-Torah for "playing a key role in promoting a close alliance between the United States and Israel".[12]

In 1999, Schultz was awarded the "National Leadership Award" for philanthropic and educational efforts to battle AIDS.[13]

In 2007 he received the FIRST Responsible Capitalism Award [14].

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. The same night, he delivered the Frank Cahill Lecture in Business Ethics.[15]

Criticism

In May 2009 Schultz's business practices came under criticism from Brave New Films[16]. He is accused of illegally obstructing the unionization of Starbucks employees.

References

Schultz, Howard and Yang, Dori Jones. "Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time". Hyperion, 1999[4].

Margolick, David. "Tall Order", Portfolio, July 2008 Tall Order


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