Coffee giant Starbucks ousted its CEO Laxman Narasimhan on Tuesday morning in favour of Chipotle Mexican Grill’s Brian Niccol, following two months of mounting pressure from activist hedge fund Elliott Investment Management, according to a report by the Financial Times.
Chief Financial Officer Rachel Ruggeri has been appointed as interim CEO, while Niccol is set to join on 9 September.
Elliott has been vocal about Starbucks’ underperforming share price, which, following the announcement, surged over 24% by the close of trading on Tuesday in New York. Meanwhile, Chipotle’s shares dropped more than 7%.
Niccol’s own move to Chipotle six years ago was instigated by fellow activist hedge fund Pershing Square Capital Management’s Bill Ackman, in a move that proved highly profitable for both Chipotle and Ackman’s portfolio.
Under Niccol’s leadership, Chipotle’s stock price soared nearly 800%, according to Starbucks’s press release. Ackman, meanwhile, made a 73% return in 2018 after holding the coffee giant’s stock for just over a year.
The news follows New York-based hedge fund Starboard Value’s acquisition of a stake in Starbucks last Friday.
