Starbucks is launching an online health benefits platform, doubling its annual stock award program and raising base pay by at least five per cent for all U.S. employees and store managers.
The changes were announced by the company’s chairman and chief executive officer Howard Schultz in a letter sent to employees on July 11.
“Over the years, we have viewed our total compensation approach as the best way to create long-term opportunity for partners,” wrote Schultz. “We believe strongly in this philosophy but also recognize we must do more to help partners take advantage of all the company has to offer.”
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Starbucks’ new online benefits platform, which will be launched next week, will allow employees to shop for and choose the health-care coverage that suits them.
One of the company’s annual profit-sharing programs, Bean Stock Reward, will be doubled for employees who are below director levels with two years of continuous employment. Through the program, the company’s board of directors rewards employees with restricted stock units that turn into shares after a waiting period. If employees remain with the company for one year after the grant date, they receive 50 per cent of a share. After two years, they receive the remaining 50 per cent and the restricted stock units become shares that employees can hold or sell.
The pay increase, which Schultz wrote would be at least five per cent, takes effect from Oct. 3. He noted it may be greater depending on market factors and where the employees work. Starbucks doesn’t disclose specifics on starting salaries for employees, but says they’re determined on a market-by-market basis, according to the Associated Press.
Part-time employees who work a minimum of 20 hours per week are also eligible for the same benefits and savings programs.
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Canadian employees largely receive the same benefits as their U.S. counterparts and have access to core insurance programs, extended health benefits, an employee assistance program and adoption assistance, tuition and financial assistance programs, according to the company’s website.
Starbucks also conducts bi-annual performance reviews that result in wage increases, says Madeleine Löwenborg-Frick, public affairs at Starbucks Canada. When asked whether the wage and benefits enhancements will apply to Canadian employees, Löwenborg-Frick said the changes are limited to American employees.