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Proxy advisor Glass Lewis backs Starbucks in proxy fight with union

Published 03/01/2024, 12:49 PM
Updated 03/01/2024, 12:50 PM
© Reuters. Starbucks cups are pictured on a counter in the Manhattan borough of New York City, New York, U.S., February 16, 2022. REUTERS/Carlo Allegri/File Photo

By Svea Herbst-Bayliss

NEW YORK (Reuters) - Starbucks (NASDAQ:SBUX) on Friday picked up fresh support in its board room fight with a coalition of labor unions over how it reacted to efforts to unionize and the effect those decisions had on the coffee chain's brand and stock price.

Glass Lewis followed Institutional Shareholder Services and recommended that investors re-elect all 11 Starbucks directors and not support any of the three candidates proposed by the Strategic Organizing Center, a coalition of North American labor unions. The coalition includes the parent of Workers United, which represents Starbucks workers.

"We ultimately believe the SOC's (Strategic Organizing Center) proxy campaign here is simply too myopic and falls well

short of justifying the board changes it is seeking," Glass Lewis wrote in a report seen by Reuters on Friday.

Glass Lewis wrote that Starbucks "has been reasonably responsive" to complaints about pay and work conditions and labor matters more generally.

Shareholders will vote on March 13 unless the two sides reach an agreement beforehand.

This battle has been widely watched because it is among the first board challenges to turn environmental, social and governance issues instead of financial arguments into the campaign's pillars.

Unionized workers make up only a small portion of Starbucks' workforce, but the movement has gained traction with some 370 stores voting to unionize since 2021.

© Reuters. Starbucks cups are pictured on a counter in the Manhattan borough of New York City, New York, U.S., February 16, 2022. REUTERS/Carlo Allegri/File Photo

Both sides this week committed to talks aimed at finding ways to reach labor agreements and resolve law suits between the two sides.

Starbucks on Thursday welcomed the ISS recommendation while the union coalition disagreed with it.

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