Bradley Lerman
STARBUCKSAbout Bradley Lerman
Bradley E. Lerman served as Executive Vice President and Chief Legal Officer (CLO) of Starbucks, commencing employment in May 2023; he ceased serving as CLO effective November 14, 2025 and remains with the Company in an advisory capacity during a transition period . During his tenure as an NEO, Starbucks faced a challenging FY2024 with consolidated net revenues of $36.2B (+1% YoY), GAAP operating margin of 15.0% (-130 bps YoY), and GAAP EPS of $3.31 (-8% YoY), while maintaining disciplined pay-for-performance and shareholder returns (14th consecutive annual dividend increase) . Shareholders expressed broad support for the compensation program (approx. 92% say‑on‑pay approval at 2023 AGM) . As CLO, Lerman was recognized with an above‑target individual performance factor (IPF) for effective leadership across high‑profile legal and governance matters .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Starbucks Corporation | EVP, Chief Legal Officer | May 2023 – Nov 2025 | Led strategy on high‑profile legal matters; engaged extensively with shareholders; supported addition of four new directors and establishment of a new board committee; implemented budget discipline and leadership build‑out in the legal function |
Fixed Compensation
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary (Annualized Rate, $) | $750,000 | $762,000 |
| Target Bonus (% of Base) | 100% | 100% |
| Annual Cash Bonus Paid ($) | $373,777 | $286,385 |
| Stock Awards (Grant‑date fair value, $) | $1,893,098 | $2,875,008 |
| All Other Compensation ($) | $375,318 | $243,572 |
| Total Compensation ($) | $2,973,927 | $4,164,896 |
| Annual LTI Target Value ($) | $3,000,000 | $3,500,000 |
Performance Compensation
| Component (FY 2024) | Weighting | Target | Actual | Bonus Payout Impact |
|---|---|---|---|---|
| Financial Metrics (Adjusted Net Revenue & Adjusted Operating Income combined) | 75% | Company targets set above FY2023 | Net Revenue achieved 93% of target (factor 35%); Operating Income achieved 81% of target (factor 0%); combined financial factor 14% | Contributed 14% before weight; overall weighted result reported in total payout |
| Individual Performance Factor (IPF) | 25% | 100% | 108.3% (above target) | IPF above target reflected in payout; weighted by 25% in total |
| Total Bonus Earned (as % of Target) | — | — | — | 37.6% of target; cash paid $286,385 |
Key IPF drivers (qualitative):
- Led board and company responses to shareholder feedback, disciplined legal spend, supported board refresh (four new directors) and formation of a new committee, and provided strategic legal leadership in labor relations—meriting an above‑target IPF .
Performance Equity Design and Vesting
- PRSUs: Earned on three‑year adjusted EPS against annual targets, modified ±25% by relative TSR vs S&P 500; with FY2024 design including ±10% talent (representation) and ±10% sustainability modifiers; time‑based RSUs vest in equal annual installments over four years .
- FY2025 program changes: PRSUs shifted to 50% three‑year average global company‑operated comp store sales + 50% three‑year average adjusted EPS; removed talent/sustainability modifiers; TSR modifier converted to payout range for simplicity and alignment with “Back to Starbucks” priorities .
Equity Grants (NEO Awards Relevant to Lerman)
| Grant | Grant Date | Type | Units (Threshold/Target/Max) | Fair Value ($) | Vesting Terms |
|---|---|---|---|---|---|
| Annual LTI | Nov 14, 2023 | RSUs | 13,258 | $1,400,045 | 25% annually over 4 years, subject to continued service |
| Annual LTI | Nov 14, 2023 | PRSUs | 1,657 / 6,629 / 13,258 | $790,111 | 3‑yr performance; adjusted EPS with TSR, talent, sustainability modifiers; continued service to settlement |
| New‑hire cycle participation | May 15, 2023 | RSUs | — | — | To align with FY2023‑FY2025 PRSU cycle participation |
Equity Ownership & Alignment
| Category (as of Sep 29, 2024) | Count | Value ($) |
|---|---|---|
| Unvested RSUs (5/15/2023) | 7,757 | $755,222 |
| Unvested RSUs (11/14/2023) | 13,513 | $1,315,626 |
| Total Unvested RSUs | 21,270 | $2,070,848 |
| Unearned PRSUs (FY2023‑2025 cycle) | 17,395 | $1,693,577 |
| Unearned PRSUs (FY2024‑2026 cycle) | 5,067 | $493,323 |
| Total Unearned PRSUs | 22,462 | $2,186,900 |
| Options Outstanding | 0 | 0 |
Alignment policies:
- Executive stock ownership guidelines: executives must hold multiples of base salary; all current NEOs exceeded their applicable requirement as of the proxy date .
- Insider trading: hedging and pledging prohibited; no current executive officer or director has pledged Starbucks stock; strict preclearance and 10b5‑1 plan procedures apply .
- Clawback: Recovery of Incentive Compensation Policy extends beyond Dodd‑Frank to recover cash and equity for miscalculation or misconduct; policy filed as Exhibit 97 to 10‑K .
Employment Terms
| Provision | Key Terms |
|---|---|
| Commencement & Role | Commenced May 2023; EVP, Chief Legal Officer; ceased CLO role Nov 14, 2025; remains as advisor during transition |
| Severance (no CIC) | 1.5× base + target bonus; prorated bonus based on actual financial performance (assuming 100% IPF); 18 months’ COBRA cash; up to $25,000 outplacement; continued vesting (prorated) of post‑Aug 31, 2022 awards; restrictive covenants required |
| Severance (double‑trigger CIC) | 2× base + target bonus (2.99× for CEO, not applicable to Lerman); prorated bonus based on greater of target or actual; 18 months’ COBRA; full vesting of post‑Aug 31, 2022 awards (performance at target if termination before performance period end); restrictive covenants |
| Potential Payments (Illustrative as of Sep 29, 2024) | Termination without cause: cash $2,572,385; COBRA $29,520; outplacement $25,000; equity continued vesting value estimate provided in proxy |
| Insider Selling Controls | Preclearance required; certification of no MNPI; two‑day execution window post‑approval; Company may reject requests; Corporate Secretary maintains records |
| Clawback & Policies | Robust clawback; no option repricing; no excise tax gross‑ups on change‑in‑control; strong governance of aircraft use; no dividend payments on unvested awards |
Performance & Track Record
- Governance and legal execution: Drove legal strategy on high‑profile matters; extensive shareholder engagement; supported board refresh (four new directors) and new committee formation; strengthened legal function efficiency—recognized via above‑target IPF .
- Enterprise risk oversight: As CLO, co‑manages the management‑level Risk Management Committee with the CFO; committee meets at least monthly and reports to senior leadership and the Audit Committee .
- Transition: Effective Nov 14, 2025, Lerman ceased serving as CLO and remained as advisor; Starbucks appointed Pilar Ramos as EVP and CLO in Nov 2025 .
Investment Implications
- Pay-for-performance alignment: Lerman’s FY2024 bonus reflected challenging company financials (financial factor 14%) and above‑target individual performance (IPF 108.3%), yielding 37.6% of target—reinforces program discipline and individual accountability .
- Selling pressure/vesting cadence: No stock options; RSUs vest annually (4‑year schedule); PRSUs settle on three‑year cycles with TSR/talent/sustainability modifiers (FY2024 design), moderating near‑term selling pressure; insider trading preclearance and anti‑pledging further reduce opportunistic sales risk .
- Retention/transition risk: Ceased CLO role with advisory status; severance and CIC protections standard for peers; board already appointed successor CLO in Nov 2025—limiting operational disruption .
- Governance strength signals: Strong clawback beyond Dodd‑Frank, prohibition on hedging/pledging, and robust shareholder support (≈92% say‑on‑pay) indicate high governance quality and lower compensation-related red flags .