Strategic Organizing Center Issues Statement on ISS Recommendation

The Strategic Organizing Center (the “SOC”), a shareholder of Starbucks Corporation (Nasdaq: SBUX) (“Starbucks” or the “Company”), today commented on the recent report published by Institutional Shareholder Services Inc. (“ISS”) in relation to Starbucks’ upcoming Annual Meeting of Shareholders (the “Annual Meeting”). The Annual Meeting is scheduled for March 13, 2024.

The SOC stated:

“While ISS acknowledged the validity of a number of our arguments in its report, we disagree with the view that board change is not currently needed at Starbucks. As ISS points out, Starbucks ‘mishandled’ its response to its employees’ campaign for unionization and, as a result, has materially damaged the reputation the Company previously enjoyed as a progressive employer. ISS also concurs that shareholders should be concerned by Starbucks’ share price performance since unionization efforts began. However, in our view, ISS’ analysis of the link between this underperformance and the Company’s reliance upon illegal tactics in its human capital management strategy ignores what is plainly evident: Starbucks’ Board should be held accountable for endorsing a response to unionization that destroyed shareholder value.

Further, we agree with ISS that the recent announcement of Starbucks and Workers United committing to a path forward is meaningful progress. That said, the fact remains that the actions the Company has taken are reactive. For this reason, we feel it is still important to add independent oversight to the Starbucks Board in order to ensure the Company follows through on its commitments. Our three exceptionally qualified nominees – Maria Echaveste, Hon. Joshua Gotbaum and Hon. Wilma Liebman – bring diverse leadership experience from within the business, government and non-profit sectors and can provide the perspectives and expertise Starbucks needs now.

We encourage shareholders to help send the message that it is time to Brew a Better Starbucks by voting for our director candidates today. We look forward to continuing to engage with our fellow shareholders in advance of the Annual Meeting.”

In its report, ISS noted the following:¹

• “Although SBUX has weathered controversies about unionization in the past, its image as an employer has faced greater scrutiny than ever since the unionization movement began.”

• “By its own admission, the board was caught off-guard and mishandled the initial response. This translated into negative media attention, which led to SBUX being recast from a progressive employer into an embodiment of the frustrations faced by many retail workers.”

• “…the initial response by SBUX to unionization efforts translated into reputational damage…”

• “The key in this proxy contest is uncovering the role that unionization matters have played in the divergence [between long-term and short-term performance].”

• “A business like SBUX cannot function without employees, so there is necessarily a link between labor and performance.”

• “Perhaps most importantly, SBUX and Workers United recently committed to start discussions on a foundational framework designed to achieve collective bargaining agreements, and SBUX will provide union-represented partners with previously-announced benefits that they have not been able to take advantage of to date. This appears to be a major step forward for all involved.”

Shareholders can be part of ensuring Starbucks returns to the right path for the future by using the BLUE proxy card – to vote “FOR” each of the SOC Nominees today. Shareholders can also vote for the SOC Nominees on the Company’s White proxy card.