US Stocks: Starbucks investor group urges shareholders to replace directors amid labor dispute

Starbucks faced new pressure on Wednesday from a coalition of investors, including public sector pension funds, who urged shareholders to vote against the re-election of two directors, citing an ongoing failure to manage labor relations. The move against Starbucks’ lead independent director, Jorgen Vig Knudstorp, and Beth Ford, chair of the board’s Nominating ‌and Corporate ⁠Governance Committee, comes as the company is engaged in a protracted effort to reach a collective agreement with its unionized baristas.

More than 3,800 baristas had joined a nationwide strike late last year – the longest work stoppage in its history – as the Starbucks Workers United union pushed for better staffing, more predictable work schedules and higher wages after lengthy contract talks.

The dispute has become a high-profile test for CEO Brian Niccol as he tries to revive sales.

“We are concerned that without a constructive relationship between Starbucks and its unionized workforce, sustaining the turnaround may prove difficult,” the investors wrote in a letter ahead of the March 25 annual meeting.

Thomas DiNapoli, New York State Comptroller, Mark Levine, Trillium ESG Global Equity Mutual Fund, SOC Investment Group, Merseyside Pension Fund and the Shareholder Association for Research and Education all signed it.

“We offer the best jobs in retail, with associates who earn an average of $30 per hour and world-class benefits… all for those who work an average of just 20 hours per week,” Starbucks said in a statement. The investor group had written a letter to the two directors in January expressing concerns about the board’s dissolution of the Environmental, Partner and Community Impact Committee, without any explanation.

The committee’s responsibilities were redistributed among existing committees and the full board reclaimed primary responsibility for labor oversight, Starbucks told Reuters on Wednesday.