Cathy Smith
STARBUCKSAbout Cathy Smith
Cathy R. Smith, 62, joined Starbucks in March 2025 as executive vice president and chief financial officer (principal financial officer and principal accounting officer). She holds a BA from UC Santa Barbara and an MBA from USC, and currently serves on the boards of PPG Industries and Baxter International; prior directorships include Dick’s Sporting Goods . In FY2025 under Smith’s tenure, consolidated net revenues increased 3% to $37.2B, GAAP operating margin contracted to 7.9% (-710 bps YoY), GAAP EPS was $1.63 (-51% YoY), and non-GAAP EPS was $2.13 (-36% YoY); Smith emphasized a multi-year turnaround focus and disciplined cost control in the “Back to Starbucks” plan .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Nordstrom, Inc. | EVP, Chief Financial Officer & Treasurer | 2023–2025 | Senior retail finance leadership; breadth in retail and global operations . |
| Bright Health Group, Inc. | Chief Financial & Administrative Officer | 2020–2023 | Finance and administration leadership in healthcare services . |
| Target Corporation | Chief Financial Officer | 2015–2020 | Fortune 100 retail CFO; large-scale finance and operations . |
| Express Scripts Holding Co. | Chief Financial Officer | 2014–2015 | CFO in pharmacy benefit management . |
| Walmart International | Chief Financial Officer | 2010–2014 | Global retail finance leadership across international markets . |
| GameStop Corporation | Chief Financial Officer | 2009–2010 | Specialty retail finance leadership . |
| Centex | Chief Financial Officer | 2006–2009 | CFO in homebuilding sector . |
| Kennametal | Chief Financial Officer | 2005–2006 | Industrial manufacturing finance leadership . |
| Textron | Chief Financial Officer | 2003–2005 | Diversified industrial finance leadership . |
| Raytheon | Various Finance Roles | 1986–2003 | Long-tenured defense/aerospace finance experience . |
External Roles
| Organization | Role | Years |
|---|---|---|
| PPG Industries, Inc. | Director | Current |
| Baxter International, Inc. | Director | Current |
| Dick’s Sporting Goods, Inc. | Director | Prior |
Fixed Compensation
| Component | Terms | Value |
|---|---|---|
| Base Salary | Initial base salary | $925,000 per year |
| Target Bonus (EMBP) | Annual cash incentive target | 125% of base salary (prorated for FY2025) |
| Sign-On Bonus | Two installments; 30 days after start and 12 months after start; repayment if voluntary departure within first/second year per stated proration formula; paid if termination without cause, death or disability | $5,000,000 |
Performance Compensation
New-Hire Equity and Annual LTI
| Award | Structure | Target Value | Vesting | Performance Cycle / Metrics |
|---|---|---|---|---|
| Replacement Grant | 60% PRSUs / 40% RSUs | $6,400,000 | RSUs vest 1/3 annually over 3 years; PRSUs vest based on FY2025–FY2027 LTIP metrics | PRSUs tied to LTIP 2025–2027; settlement after FY2027 |
| FY2025 Annual Grant | 60% PRSUs / 40% RSUs | $4,500,000 | RSUs vest 1/4 annually on the first–fourth anniversaries of November 19, 2024; PRSUs vest based on FY2025–FY2027 LTIP metrics | PRSUs tied to LTIP 2025–2027; settlement after FY2027 |
Special “Back to Starbucks” PRSU Grant (June 2025)
| Metric | Weighting | Target | Payout Range | Vesting / Conditions |
|---|---|---|---|---|
| Operating expense reduction (threshold) | Not disclosed | Threshold required for any payout | ≥ Threshold unlocks payout eligibility | Eligible to vest after FY2027; requires service through settlement |
| Green Apron Service program rollout | Not disclosed | Company-defined rollout goals | Up to 200% of target when combined metrics achieved | As above; subject to rTSR modifier |
| Coffeehouse uplifts | Not disclosed | Program targets | Up to 200% | As above |
| New food & beverage platforms | Not disclosed | Launch targets | Up to 200% | As above |
| Reimagined Starbucks Rewards program | Not disclosed | Program milestones | Up to 200% | As above |
| Relative TSR modifier | N/A | S&P 500 median | Downward adjustment if rTSR < 50th percentile | Settlement post-FY2027 |
| Award size (NEOs) | N/A | — | Target $6,000,000 | Service through settlement date required |
In FY2024 PRSUs for NEOs used EPS goals with rTSR, talent, and sustainability modifiers; FY2025 program changes aimed to simplify and align with “Back to Starbucks” long-term sales growth priorities .
Equity Ownership & Alignment
- Stock ownership guidelines: CFO must hold company stock equal to 3× base salary within five years .
- Insider trading policy: Quarterly restricted trading windows; event-specific blackouts; 10b5‑1 trading permitted if compliant; hardship exceptions are not allowed for executive officers; CFO and CLO have authority to interpret policy .
- Anti-hedging and anti-pledging: Hedging and pledging of Starbucks stock are prohibited for officers and directors; no current executive officer or director has pledged shares .
- Beneficial ownership: Not disclosed in available filings for Smith; no related party transactions reported for her .
Employment Terms
| Term | Details |
|---|---|
| Employment start | March 2025; appointed EVP, CFO and designated principal financial and accounting officer |
| Employment type | At-will |
| Restrictive covenants | Confidentiality, non-solicitation, non-compete, inventions assignment agreement required |
| Severance plan participation | Eligible for Executive Severance and Change-in-Control (CIC) Plan |
Severance and Change-of-Control Economics
| Scenario | Cash Severance | Equity | Bonus | Benefits |
|---|---|---|---|---|
| Termination without Cause (outside CIC) | 1.5× base + target bonus; 50% paid within 10 business days of release effectiveness and 50% at 18 months | Continued vesting of post‑Aug 31, 2022 equity, pro‑rated; performance awards earned based on actual performance | Prorated, based on actual Company financial performance; individual factor assumed at 100% | Lump sum equal to 18 months of COBRA; outplacement (or lump sum up to $25,000) |
| Termination without Cause or Resignation for Good Reason (within CIC period) | 2× base + target bonus (CEO at 2.99×) paid within 10 business days | Double‑trigger acceleration of post‑Aug 31, 2022 equity; performance awards vest at target if termination occurs on/before performance period end; otherwise based on actual achievement | Prorated at greater of target or actual Company performance | Lump sum equal to 18 months of COBRA; outplacement (or lump sum up to $25,000) |
| New-hire awards on termination without Cause | 100% of Replacement Grant & FY2025 RSUs continue to vest per schedule; PRSUs eligible to vest (up to 200% of target) based on actual performance; any unpaid sign-on bonus paid within 30 days; no repayment collected | As stated | As stated | As stated |
- Clawback policy: Company maintains an expanded clawback policy beyond Dodd‑Frank; Smith’s awards are subject to the Amended and Restated Recovery of Incentive Compensation Policy .
- Deferred compensation: Eligible for Management Deferred Compensation Plan; no above‑market returns and no company match under MDCP .
- Perquisites: Executive life insurance at 3× base pay (option to purchase up to 5×, capped at $2,000,000); executive physical program eligibility .
Performance & Track Record
| Metric | FY2025 | Notes |
|---|---|---|
| Consolidated Net Revenues ($USD Billions) | $37.2 (+3% YoY) | |
| GAAP Operating Margin (%) | 7.9 (−710 bps YoY) | |
| GAAP EPS ($USD) | $1.63 (−51% YoY) | |
| Non-GAAP Operating Margin (%) | 9.9 (−510 bps YoY) | |
| Non-GAAP EPS ($USD) | $2.13 (−36% YoY) | |
| Global Comparable Store Sales | −1% | |
| CFO Commentary | “Multi-year turnaround… focus on topline and costs within our control.” |
- Organizational alignment: CTO now reports to CFO to accelerate technology enablement of partner and customer experience, indicating expanded operational oversight for Smith .
Investment Implications
- Alignment and retention: Structure emphasizes equity at risk via multi-year PRSUs (including $6M special PRSU tied to turnaround milestones) plus strict ownership guidelines (3× salary), aligning incentives with execution of cost reduction, service improvement and product platform rollouts through FY2027 .
- Severance economics: Standard market multiples with double-trigger equity acceleration in CIC scenarios; outside CIC, continued vesting and prorated bonuses mitigate abrupt separation risks while preserving performance linkage .
- Trading signals: Insider trading windows are restrictive (no hardship exceptions for executive officers) and anti-hedging/pledging policies reduce forced-sale/pledging pressure; expect any sales via pre‑planned 10b5‑1 programs .
- Execution risk: FY2025 results reflect margin compression and EPS declines amid turnaround; PRSU metrics explicitly target operating expense reductions and core program rollouts, offering visibility into management priorities and milestones that may act as catalysts if achieved .
- Governance and clawbacks: Expanded clawback coverage and no tax gross‑ups, no SERPs, and double‑trigger CIC treatment indicate shareholder‑aligned pay practices, lowering governance red‑flag risk .