A Convenient Defense of a $95 Million CEO Payday

The Washington Post recently published an op-ed arguing that Starbucks CEO Brian Niccol’s $95 million compensation package is “worth every cent.” The case rests largely on Niccol’s previous tenure at Chipotle, where he presided over a dramatic increase in market value. From this, we are supposed to believe two things: first, that he will boost Starbucks to a level of success similar to what he achieved at Chipotle, and second, that his compensation represents a trivial fraction of the wealth he is capable of “creating.”¹

But these claims are far from conclusive and fail as a reasonable argument for several reasons. First, an increase in a publicly traded company’s market capitalization is not directly proportional to executive output. Stock-price appreciation reflects investor expectations that are shaped by interest rates, liquidity conditions, risk premiums, and sentiment; not just operational performance.²

Chipotle’s stock rose roughly eightfold during Niccol’s tenure, yet operating fundamentals did not scale at the same rate. Between fiscal 2018 and 2024, Chipotle’s revenue roughly doubled, and operating income increased severalfold. This is impressive, but it is still insufficient to explain an eight-fold equity gain without a significant expansion of valuation multiples.³

A substantial portion of Chipotle’s stock gains came from multiple expansion during an era of extraordinary monetary accommodation by the Federal Reserve. The S&P 500’s forward P/E ratio rose materially over the same period, and consumer discretionary growth stocks saw some of the largest re-ratings in the market.⁴ Chipotle benefited from these conditions alongside many companies whose executives are not credited with “creating” tens of billions in value. The company’s stock soared for reasons far beyond Niccol’s influence, yet portraying the entire jump as his doing is not rigorous analysis—it is storytelling after the fact.

This distinction matters because storytelling after the fact is precisely how executive compensation escapes meaningful scrutiny. If stock prices rise, pay is justified; if they fall, macro conditions are blamed. Compensation is largely realized either way. Equity awards vest, sign-on packages are paid, and downside exposure is minimal. Upside, by contrast, is effectively uncapped.⁵ That asymmetry is not a market necessity; it is a governance choice.

Starbucks makes this flaw in logic more apparent. Starbucks is not a distressed growth company recovering from a crisis, as Chipotle was in 2018 following food-safety scandals. It is a mature global brand with over $35 billion in annual revenue, facing slower unit growth, rising labor costs, unionization pressure across U.S. stores, and increasing consumer resistance to price increases.⁶

Even strong execution cannot recreate the extraordinary monetary environment or valuation expansion that characterized Chipotle’s late-2010s and pandemic-era context. Paying $95 million on the assumption that past market conditions will repeat is speculative, not disciplined capital allocation.

Brian Niccol may ultimately deliver results that justify his compensation at Starbucks. He may not. That judgment depends on what he achieves going forward, not what the stock did in the past. Compensation should be assessed before the fact, according to risk, incentives, and performance benchmarks, as opposed to retroactively using market outcomes inflated by temporary conditions.⁷

The fact that this argument appears in the Washington Post should be no surprise to anyone. The paper is owned by Jeff Bezos, whose wealth accumulation has long been a subject of fierce debate, not merely for its scale, but also for the business practices that accompanied it.  In brief, Amazon has faced sustained scrutiny over warehouse labor conditions, injury rates exceeding industry norms, aggressive anti-union campaigns, supplier-squeeze tactics, and platform self-preferencing under antitrust investigation in the U.S. and Europe.⁸  During the same period, Bezos’s net worth peaked above $200 billion.⁹

Ownership need not dictate editorial content to shape institutional tone. Media organizations inherently reflect the assumptions of the systems in which they operate. Normalizing extreme executive compensation as rational, inevitable, or modest reinforces a worldview in which outcomes justify power and scale excuses scrutiny.

The op-ed dismisses labor concerns and wage stagnation as distractions, framing skepticism toward executive pay as ignorance rather than prudence. It does not meaningfully engage the central question: whether compensation structures align risk and reward symmetrically, or whether they socialize downside while privatizing upside.

Maybe Niccol will deliver results that justify his pay. But maybe he won’t. That determination belongs to future outcomes, not retrospective stock charts. Accountability requires evaluating compensation before results are known, not just celebrating outcomes after the fact.¹⁰

Markets depend on skepticism.

When skepticism itself is treated as unsophisticated, accountability is the first casualty. 

References

1. Starbucks Corporation, Proxy Statement 2025, Form DEF 14A: disclosure of CEO compensation and equity awards.
2. Federal Reserve Economic Data (FRED), policy rates and liquidity conditions, 2018–2024.
3. Chipotle Mexican Grill, Annual Reports 2018–2024, revenue and operating income growth.
4. S&P 500 Forward P/E and consumer discretionary sector multiples, 2018–2024, Bloomberg Intelligence.
5. Proxy statements, executive compensation disclosures: prevalence of guaranteed sign-on awards, equity vesting, and limited clawback enforcement.
6. Starbucks Annual Reports; unionization data from Starbucks Workers United; U.S. same-store sales trends.
7. Bebchuk, L. & Fried, J., Pay Without Performance, Harvard University Press, 2004.
8. U.S. NLRB filings; OSHA injury-rate statistics; DOJ and FTC antitrust complaints; EU competition investigations.
9. Bloomberg Billionaires Index historical data for Jeff Bezos.
10. Academic research and corporate governance literature on incentive design, risk alignment, and compensation evaluation.