Investor Coalition Challenges Starbucks Board Ahead of Critical Vote

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A powerful coalition of institutional investors is mounting a challenge to Starbucks' leadership. With the annual shareholder meeting approaching, pension funds and asset managers are pushing for the removal of two key board members. The central allegation is that the company has failed in its oversight of labor relations—a conflict that threatens to undermine CEO Brian Niccol’s ongoing corporate turnaround plan.

The friction between Starbucks and U.S. labor regulators has resulted in a substantial case load. Since the start of 2025, more than 125 new complaints alleging unfair labor practices have been filed. In total, the coffee chain has faced over 700 cases before the National Labor Relations Board (NLRB) since 2021. The financial impact was highlighted in December 2025, when Starbucks agreed to a record $38.9 million settlement with the city of New York to resolve violations of local scheduling laws.

Management has defended its record, pointing to an attractive benefits package and an average hourly wage of approximately $30, including additional compensation. The company also emphasizes that the responsibilities of a dissolved special committee have now been assumed by the full board.

Specific Board Members Targeted

The investor group, which includes the New York City Comptroller and Trillium Asset Management, is specifically seeking to oust Jørgen Vig Knudstorp, the independent Lead Director, and Beth Ford, who chairs the Nominating and Governance Committee. In a letter issued this past Wednesday, the coalition accuses the board of reversing course on its monitoring of worker rights.

A particular point of contention is the November 2025 dissolution of a dedicated committee on social impact. Investors contend that the elimination of this body coincided with a deterioration in the company's relationship with its workforce. The question now is whether Brian Niccol can steady the corporation as pressure from major shareholders intensifies.

Strategic Implications and Shareholder Decision

In a separate legal matter, the company received favorable news on Tuesday. A U.S. federal judge dismissed a lawsuit alleging forced labor in the company's Brazilian coffee supply chain. The court ruled it lacked jurisdiction, removing this specific risk for the time being.

Despite a 6 percent revenue increase in the first fiscal quarter of 2026, analysts view the persistent tensions with the Starbucks Workers United union as a significant risk factor for Niccol's "Back to Starbucks" strategy. The company's shares, recently trading around $95.76, continue to experience volatility. The fate of the targeted board members will be decided at the annual shareholder meeting scheduled for March 25, 2026.

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