Starbucks Corporation announced the appointment of Cathy R. Smith as its new Chief Financial Officer (CFO) on Tuesday. This move is the latest in a series of leadership changes initiated by CEO Brian Niccol to revitalize the company’s declining sales. Smith, formerly CFO at Nordstrom Inc., will succeed Rachel Ruggeri, who is departing from Starbucks.
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Starbucks new CFO Cathy Smith
Smith, 61, is expected to assume her new role within the next month, according to a letter from Niccol to Starbucks employees. Niccol highlighted Smith’s “incredible knowledge and extensive experience in retail, global operations, and turnaround success” as key factors in her selection. This appointment is part of Niccol’s broader strategy to reignite growth at Starbucks, which has faced challenges due to customer dissatisfaction with high prices and extended wait times. Since taking the helm in September, Niccol has implemented a revamped leadership structure, introduced new executives, and eliminated 1,100 corporate positions to enhance efficiency and accountability.
A New Era of Financial Leadership at Starbucks
Starbucks shares experienced a decline of up to 1.6% in morning trading, mirroring a broader market downturn triggered by the imposition of US tariffs on goods from China, Canada, and Mexico. Ruggeri’s departure marks the end of a nearly two-decade tenure at Starbucks, including her role as CFO since 2021. Niccol acknowledged Ruggeri’s contributions in navigating the company through challenging periods. The separation is described as “without cause,” and Ruggeri will remain to facilitate a smooth transition.
Former Starbucks CFO Rachel Ruggeri
Ruggeri played a pivotal role in guiding Starbucks through the recovery from the COVID-19 pandemic. However, during her tenure, the company also established ambitious financial goals that were repeatedly revised downward and ultimately suspended upon Niccol’s arrival. Prior to joining Nordstrom in May 2023, Smith held the CFO position at Bright Health Group (now NeueHealth Inc.). Her extensive career also includes CFO roles at Target Corp., Walmart Inc.’s international division, and GameStop Corp.
Smith’s Compensation and Industry Analysis
Smith’s annual salary at Starbucks will be $925,000, with a target bonus of 125% of her base pay, prorated for the fiscal year 2025. Additionally, she will receive a $5 million signing bonus to compensate for forfeited incentives and equity awards from Nordstrom. Bloomberg Intelligence analyst Michael Halen noted that Smith’s “reputation for transparency” aligns well with Starbucks’ culture. Halen further observed that Niccol’s swift reshaping of the executive team is largely complete with Smith’s appointment.
Smith’s extensive experience in retail finance, coupled with her track record in turnaround situations, positions her to play a crucial role in navigating Starbucks through its current challenges and driving future growth. This strategic leadership change signals a renewed focus on financial performance and operational efficiency as Starbucks strives to regain its market momentum.
