Starbucks (SBUX) announced Tuesday that it has named Brian Niccol as its next chairman and CEO.
Niccol, who has been the CEO of Chipotle (CMG) since 2018, will join Starbucks on Sept. 9. Current Starbucks CEO Laxman Narasimhan, who took the helm in late March 2023, will step down immediately.
Starbucks CFO Rachel Ruggeri, who has served in the role since 2021, will be interim CEO.
Shares of Starbucks were up over 20%, pointing to a record one-day jump, following the announcement. Chipotle stock fell over 12%.
The board made the decision recently, the company told Yahoo Finance, calling it an opportunity it couldn't pass up, given Niccol's proven track record.
Former CEO Howard Schultz stepped down from the board last September. Starbucks claimed that he was not part of the initial recruitment process but did meet with Niccol at the end of the recruitment process.
"Having followed Brian’s leadership and transformation journey at Chipotle, I’ve long admired his leadership impact," Schultz said in a statement.
"I believe he is the leader Starbucks needs at a pivotal moment in its history. He has my respect and full support."
This comes after Schultz called for an overhaul in Starbucks' strategy in a post on LinkedIn back in May.
Starbucks also announced Tuesday that Mellody Hobson, the chair of its board, will now serve as its lead independent director.
"Brian is a culture carrier who brings a wealth of experience and a proven track record of driving innovation and growth," Hobson said in a statement. "Our board believes he will be a transformative leader for our company, our people, and everyone we serve around the world."
News of Niccol's hire comes as Starbucks has been fending off activist investors, including Elliott Investment Management and Starboard Value.
"We believe his appointment will be welcomed by all our shareholders," the company told Yahoo Finance.
Elliott called the changeup a "transformational step" in a release, sharing that it has engaged with "Starbucks' Board over the past two months regarding our perspectives on the company's key issues."
Late last month, the coffee chain reported another challenging quarter, with same-store sales falling 3% — the second straight quarter of decline — while traffic fell 5%. US sales at Starbucks fell 2% during the quarter. Over the last year, Starbucks shares have dropped 23%.
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