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26 Mar 2013

Starbucks CEO to anti-gay shareholders: Sell your shares and invest elsewhere

Starbucks CEO Howard Schultz has become somewhat of a hero for rebutting a shareholder who complained that the company's support of same-sex marriage was hurting the company’s stock price at the company's annual meeting last week.

If you're a Starbucks shareholder who opposes same-sex marriage, Starbucks CEO Howard Schultz has a clear message for you: "You can sell your shares in Starbucks and buy shares in another company. Thank you very much."

Starbucks CEO Howard Schultz

Schultz told a shareholder, Tom Strobhar, who complained at the annual investor meeting in Seattle last Wednesday that the company's support of same-sex marriage had resulted in a boycott.

Strobhar said at the meeting, “In the first full quarter after this boycott was announced, our sales and our earnings, shall we say politely, were a bit disappointing.

The Huffington Post had identified at the founder of the anti-gay marriage Corporate Morality Action Center.

Last year, the National Organization for Marriage launched a boycott of the coffee chain after Starbucks announced its support for Washington’s state’s referendum backing same-sex marriage.

Schultz responded saying: "Not every decision is an economic decision. Despite the fact that you recite statistics that are narrow in time, we did provide a 38% shareholder return over the last year. I don’t know how many things you invest in, but I would suspect not many things, companies, products, investments have returned 38% over the last 12 months. Having said that, it is not an economic decision to me. The lens in which we are making that decision is through the lens of our people. We employ over 200,000 people in this company, and we want to embrace diversity. Of all kinds."

The audience erupted in applause.

"If you feel, respectfully, that you can get a higher return than the 38% you got last year, it’s a free country. You can sell your shares in Starbucks and buy shares in another company. Thank you very much." Schultz said to greater applause.

His response has since been widely reported in the media.

Jena McGregor, a columnist for The Washington Post noted in her commentary: "Now of course, in reality, Schultz’s support of same-sex marriage is very much about dollars and cents — or at least about brand value and employee retention, which both affect the bottom line. For many big companies, the fear of losing out on talented employees or loyal customers who support gay rights is even greater than the fear of losing out on the dwindling number of those who don’t."

"That’s especially the case for a company like Starbucks, with its coffeehouse roots, its urban customer base and its touchy-feely talk about employees (it calls them “partners” and offers benefits other fast-food restaurants do not). And Schultz is not alone in voicing his support for same-sex marriage; CEOs including Goldman Sachs’ Lloyd Blankfein, Amazon’s Jeff Bezos and Microsoft’s Steve Ballmer have as well."

The U.S. Supreme Court will hear arguments on two same-sex marriage cases this week.

Reader's Comments

1. 2013-03-26 21:23  
He has been a staunch supporter and, I would say, that there is a tremendous amount of loyalty from gay customers and staff.

2. 2013-03-27 00:09  
This is how and where corporate America or corporate anywhere belongs, making decisions in its marketplace, not in the legislative halls or in lobbying the courts on what are cases for and about citizens' rights.
Comment edited on 2013-03-27 00:10:40
3. 2013-03-27 05:39  
It is also in the interest of Corporate America to have LGBT issues
passed into law if only to avoid lawsuits at corporate level pertaining
to insurance at work, medical coverage as well as retirement benefits when the employee has a partner.

4. 2013-03-27 08:59  
starbucks and Mr. Schultz... now i am a BIGGER fan! ;D
5. 2013-03-27 09:28  
two thumbs up!!! and i luv starbucks anyway!! v(^_^)v
6. 2013-03-27 10:03  
I have been a loyal customer of Starbucks and shall continue to support it even more... Good work Mr Schultz!
7. 2013-03-27 12:57  
I love the smackdown he gave Strobhar, in fact, he could be a little less polite about it too. Strobhar wants to eat his cake and still have it too, he won't sell his shares, he's about the money, but don't care about the principles.
8. 2013-03-29 02:40  
Hooray for Starbucks and its CEO. Hats off to this smart man and his company, and to all other companies which cater to the LGBT community. We are not going away.
9. 2013-04-02 05:05  
I've been spending more than 50 bucks a month a Starbuck over the years. I am not a big fan of their coffee, however, I have no intention to decrease my spending at the coffee franchise. The CEO's saying might have been based on the demographics of its customers and employees but I wouldn't care too much. Money talks in this world we live in. I guess it is not bad at all to use our purchasing power to achieve equal rights for us and everyone.

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