History of Partner Benefits at Starbucks
From the beginning, Starbucks has made it a priority to invest in its people.
“The equity of the Starbucks brand has been built by the experience, which comes to life through our partners and the relationships they have with our customers,” said Starbucks chairman and chief executive officer Howard Schultz to shareholders in 2014. “We are continuing to invest in our most important assets: our people.”
1971 Starbucks opens its doors in Seattle’s Pike Place Market
From the early days of Starbucks as a small specialty shop selling bulk coffee and tea, employees could mark out a free pound of coffee.
1988 Extends health coverage for part-time employees
When Howard Schultz becomes chief executive officer in 1987, Starbucks begins its new chapter as a coffeehouse. Schultz advocates extending comprehensive health coverage to part-time employees at a time when most companies were not doing so. In 1988, Starbucks begins to offer full health benefits to eligible full- and part-time employees, including coverage for domestic partnerships.
1991 Introduces Bean Stock
As the company prepares for its initial public offering, Starbucks takes an extraordinary step and becomes the first privately owned U.S. company to offer a stock option program that includes part-time employees. From this point forward, Starbucks employees are called “partners,” because they have a share in the company’s success. The program starts with 700 partners in just over 100 stores in the U.S. and Canada. The first stock options are granted at $6 per share to partners ($0.09 per share, adjusted for subsequent stock splits).
1992 Completes initial public offering
Starbucks goes public on June 26, 1992 at a price of $17 per share ($0.27 per share, adjusted for subsequent stock splits) and closes trading the first day at $21.50 per share. In 1995, Starbucks introduces SIP (Stock Investment Plan) offering partners the opportunity to purchase company stock each quarter at a discounted price through regular payroll deductions.
Starbucks Expands Globally As Health Care Costs Grow
In the decade, Starbucks grew from 84 stores in the U.S. and Canada to more than 3,000 stores in 14 countries around the world. Healthcare costs skyrocket, with millions in the U.S. left uninsured. In 1994, Howard Schultz goes to the White House to discuss Starbucks approach to health care as an example of corporate citizenship.
2004 Cover the Uninsured
In 2004 as health care costs continue to grow unabated, Schultz (who is now chairman and chief global strategist) meets with federal policymakers in Washington. He shares the company’s concern about the impacts that rising healthcare costs are having on all Americans and many employers.
2008 Facing New Challenges
By 2008, Starbucks rapid growth begins to slow as same-store sales decline for the first time in the company’s history. Chairman Howard Schultz returns as chief executive officer and embarks on the company’s transformation, making the difficult decision to cut staff and shutter hundreds of stores. Schultz resists pressure from institutional shareholders to cut the healthcare benefits to partners, while the stock plunges to under $10.
2010 Reinventing Partner Compensation and Training
One of the key pillars of the company’s transformation is “engage and inspire our partners,” and Starbucks begins to reinvent compensation and benefit plans. Starbucks rolls out a redesigned Bean Stock program to reward partners with restricted stock units, which have value even during downward fluctuations in stock price (unlike stock options). The company also updates its 401(k) retirement matching to allow partner benefits to vest more quickly.
Creating New Pathways to Opportunity
2014 Launches Starbucks College Achievement Plan
To address the growing cost of higher education in the United States, where the cost of higher education has increased more than 500 percent since the mid-1980s, Starbucks creates the Starbucks College Achievement Plan. The program creates an opportunity for eligible U.S. partners to earn bachelor’s degrees through Arizona State with full tuition reimbursement. There are currently more than 6,000 partners who have enrolled in the program, and the company plans to help at least 25,000 partners graduate through Arizona State University’s online degree program by 2025.
Outside the U.S., innovative partner benefits to help address unique needs in different parts of the world, such as Home Sweet Loan in the United Kingdom to help partners tackle the cost of living by providing interest-free loans and a monthly housing subsidy in China for full-time Starbucks baristas and shift supervisors.
Evolving our Partner Benefits Offerings
2016 Bean Stock and Health Care Enhancements
Starbucks offers a number of pay and Bean Stock enhancements to U.S. partners. The company plans to double the annual Bean Stock award for U.S. company-operated hourly store partners who reach two years of continuous service with the company. The company also unveils a new partner benefits program and online benefits platform so partners may shop, compare and choose health coverage.
“From day one, our performance has always been directly linked to the value and the commitment we have to our people,” said Schultz. “We are pleased to now offer even more choice, affordability and flexibility, a testament to how we are continually innovating the experience for our partners.”
2017 Parental Leave Benefit Changes
On the heels of significant U.S. store partner investments in 2016, we are expanding our parental leave benefits in 2017 for our U.S. partners. Effective Oct. 1, 2017, we will be making the following changes to our parental leave policy:
- All benefits-eligible birth mothers (store and non-store) working at least 20 hours a week will be eligible for six weeks of leave for medical recovery, paid at 100 percent of their average pay. Previously, those six weeks for all partners were paid at 67 percent of average pay.
- This benefit will be exceptional within the retail industry, especially because we make it available to benefits-eligible store partners working part-time, as well as full-time, like the rest of our benefits package.
- In addition, all benefits-eligible store partner new parents – including spouses and domestic partners working part-time or greater who welcome a new child, by birth, foster or adoption, will be eligible to take 12 weeks of unpaid leave without needing to meet Family Medical Leave (FMLA) eligibility requirements. This is also rare in the retail industry.
- And to be more competitive in our efforts to seek and retain non-store talent, any benefits-eligible non-store partner new parents – including spouses and domestic partners – who welcome a new child, by birth, foster or by adoption, will be eligible to take 12 weeks of leave paid at 100 percent of average pay.
“While we have made substantial investments in our partners, we want to continue to do more,” said Kevin Johnson, president and coo. “This is one of many steps we are actively taking to evolve our benefits and create a Partner Experience that lives up to our aspirations.”