Starbucks Operating Chief to Go on Extended Leave -- 2nd Update

By Ilan Brat and Josh Beckerman 

Starbucks Corp.'s Chief Operating Officer Troy Alstead will take an indefinite leave of absence, the company said on Thursday, a year after he was promoted to be the coffee chain's second in command.

Mr. Alstead, 51 years old, will have his last day in his current role on March 1, the company said. Starbucks didn't provide a reason for the move, or say when Mr. Alstead's leave of absence would end.

A spokesman said that all Starbucks employees become eligible for a yearlong leave after 10 years with the company, and that Mr. Alstead, who joined the company 23 years ago, first requested taking an extended period off in 2008. But Starbucks at the time was reeling from a steep slump in its profits and the decision to close hundreds of stores, and Chairman Howard Schultz persuaded Mr. Alstead to stay. Mr. Alstead recently requested again to take the leave, the spokesman said.

Messrs. Alstead and Schultz will provide more detail about transition plans later this month, the company said.

In January 2014, Starbucks said Mr. Schultz would expand his role in product innovation and digital retailing as part of a shuffling of senior executives aimed largely at adjusting to technology-driven shifts in the industry. Mr. Alstead, then the chief financial officer, was named chief operating officer and placed in charge of day-to-day operations.

In the fiscal year ending in September 2013, Mr. Alstead earned the company's second-highest salary after Mr. Schultz and received more than $3 million in total compensation including bonuses, stock options and other perks. Starbucks hasn't yet filed its proxy for the latest fiscal year.

Just over a month ago, the Seattle-based company detailed a five-year plan that includes doubling sales from its food business and becoming more of an evening food-and-wine destination.

Starbucks's other growth plans include new store formats like "express" locations and mobile-payment initiatives that will provide faster service.

Starbucks shares fell 1.5% to $81.27 in after-hours trading following the announcement, largely erasing a 1.6% rise in 4 p.m. trading on the Nasdaq Stock Market.

"Troy is a beloved Starbucks partner and has played an invaluable role in our growth as an enterprise and in the development of our culture as a performance driven company balanced with a humanity unique for our industry," Mr. Schultz said in a statement announcing the leave. "Troy's humanity and humility will be missed and we wish him the best."

Write to Ilan Brat at [e-mail] and Josh Beckerman at [e-mail]

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