The Best Companies Can Tell Shareholders to Go to Hell
Or, translated into language the Starbucks
In fact, Schultz displayed the swagger Apple
Via Forbes, here's the context and what went down Wednesday at Starbuck's annual meeting:
Last year Starbucks announced its support for Washington's state's
sicreferendum backing gay marriage, and in response the National Organization for Marriage launched a boycott of the coffee chain.
"In the first full quarter after this boycott was announced, our sales and our earnings, shall we say politely, were a bit disappointing," said the shareholder, Tom Strobhar . . . the founder of the anti-gay marriage Corporate Morality Action Center.
. . . Schultz . . . responded, "Not every decision is an economic decision. Despite the fact that you recite statistics that are narrow in time, we did provide a 38% shareholder return over the last year . . . Having said that, it is not an economic decision to me. The lens in which we are making that decision is through the lens of our people. We employ over 200,000 people in this company, and we want to embrace diversity. Of all kinds."
At that point the audience interrupted in cheers and applause. Then Schultz concluded, "If you feel, respectfully, that you can get a higher return than the 38% you got last year, it's a free country. You can sell your shares in Starbucks and buy shares in another company. Thank you very much."
Smash. Bang. Boom. Howard Schultz is not only a genius , he's a standup guy running one of the best companies in the world on his terms. CEOs like Schultz win. It's not wise to bet against them.
You can say the same for Jeff Bezos at Amazon.com
These guys do not have to tread lightly. There's little, if any, concern that taking the righteous sociopolitical stance will impact sales. Starbucks and Amazon run sticky businesses driven by the daily habits of millions of loyal customers. The anti-gay marriage guy must be delusional if he thinks there's any correlation between Starbucks support for gay rights and the numbers.
I would much rather invest in a company led by a CEO and infused with a corporate culture sans fear. There's something to be said for telling one shareholder to go fly a kite and not capitulating to the reactionary whims of larger groups.