(Bloomberg) -- Starbucks Corp. founder Howard Schultz suspended a share-buyback plan to mark the start of his latest spell as chief executive officer, saying the cash could be better spent on stores and staff.
The 68-year-old announced the move in a letter to the coffee chain's employees, the Seattle-based company said in a statement on Monday. It's “the only way to create long-term value for all stakeholders,” he said.
In October, Starbucks said it would spend $20 billion on dividends and buybacks over three years, a decision that's now been partially revoked. Schultz's return, announced last month, comes at a challenging time for the global coffee chain, which faces a growing unionization effort at stores across the U.S. and a resurgent Covid-19 virus in the key growth market of China.
Through Friday, the stock fell 22% this year, valuing the company at $105 billion. Starbucks shares slipped 4.2% as of 9:38 a.m. in New York trading on Monday.
The founder is taking over from Kevin Johnson, who has run the company since 2017. Schultz is serving on an interim basis while Starbucks seeks a permanent CEO. He will rejoin the board and handle day-to-day management in addition to helping with the search for a new leader, a process the company expects to complete by this fall.
Read More: As Schultz Returns to Starbucks, Some Hope He'll Stick Around
Potential internal candidates for the top post include new operating chief John Culver and North America President Rossann Williams, Credit Suisse analyst Lauren Silberman has said. Other analysts have speculated that Schultz may end up staying on a longer-term basis.
Under Schultz, Starbucks grew from 11 stores to more than 28,000 across the globe, and now has 34,000.
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