Starbucks Corp. named a new chief financial officer on Tuesday, part of an ongoing leadership shakeup at the coffee chain as Chief Executive Officer Brian Niccol seeks to revive sagging sales.
The company tapped Cathy R. Smith, who is joining from retailer Nordstrom Inc., to succeed Rachel Ruggeri, who is leaving the company. Smith, 61, will start in the next month, Niccol said in a letter to Starbucks staff.
“Cathy brings incredible knowledge and extensive experience in retail, global operations, and turnaround success,” Niccol said.
The changes at the top are part of a broader push for growth by Niccol, who became CEO in September following rare sales declines as customers became disenchanted with the retailer’s high prices and long wait times. Niccol has brought in other new executives, enacted a revamped leadership structure and cut 1,100 corporate jobs, all with the goal of boosting efficiency and accountability.
Starbucks shares fell as much as 1.6% in morning trading in New York, in line with a broader stock-market slump as the U.S. imposed sweeping tariffs on goods from China, Canada and Mexico.
Ruggeri worked at Starbucks for almost 20 years, becoming CFO in 2021. In the letter, Niccol praised her for helping “the company navigate through some of the most challenging times.” Her separation from the company is “without cause,” Starbucks said, and she will stay on to assist with the transition.
Ruggeri helped lead the company through its recovery from the Covid pandemic. During her tenure, the chain also set aggressive financial targets that it had to cut several times and later suspended altogether when Niccol took over.
Smith joined Nordstrom in May 2023 as CFO after a stint at the health insurer Bright Health Group, which has since rebranded as NeueHealth Inc. She previously worked as the CFO of Target Corp., Walmart Inc.’s international business and GameStop Corp.
Smith’s salary will be $925,000 a year, with a bonus target of 125% of her base pay that will be prorated for fiscal year 2025. She will also receive a $5 million signing bonus to make up for cash incentive and equity awards she’s losing for leaving Nordstrom, Starbucks said in a filing.
Smith’s “reputation for transparency should make her a good cultural fit for the company,” Bloomberg Intelligence analyst Michael Halen wrote. “CEO Brian Niccol has moved quickly to remake the executive team, which we think is now largely in place.”