WASHINGTON - The Strategic Organizing Center (SOC), a shareholder group of Starbucks Corporation (NASDAQ:SBUX), has submitted a letter to the U.S. Securities and Exchange Commission (SEC), alleging that Starbucks has not fully disclosed the financial impact of its anti-union efforts to shareholders. The SOC claims these undisclosed costs and liabilities have reached at least $240 million.
The SOC's analysis suggests that Starbucks' opposition to employee unionization efforts, which include alleged violations of federal labor laws, has resulted in significant financial repercussions. The estimated costs through February 2024 include $100 million in legal fees, $40 million for consultants and internal support, and $13 million in lost employee productivity. Additionally, liabilities based on National Labor Relations Board (NLRB) complaints and labor judge decisions total $87 million, including $61 million for illegally denied wages and tips and $26 million for illegal firings and store closings.
The SOC argues that Starbucks' proxy materials do not accurately reflect the company's human capital management strategy and its associated costs. This lack of transparency, according to the SOC, impedes shareholders' ability to make informed decisions at the upcoming Annual Meeting on March 13, 2024.
To address these concerns and improve oversight, the SOC has nominated three independent candidates for the Starbucks Board: Maria Echaveste, Hon. Joshua Gotbaum, and Hon. Wilma Liebman. Their combined experience in labor management, corporate governance, and public policy is seen by the SOC as essential to repairing Starbucks' relationship with workers and regulators and to protecting shareholder value.
The information is based on a press release statement from the SOC.
InvestingPro Insights
As Starbucks Corporation (NASDAQ:SBUX) faces scrutiny from the Strategic Organizing Center over its financial disclosures related to union opposition, investors may also be interested in the company's current financial health and market position. According to recent data from InvestingPro, Starbucks has a market capitalization of $105.54 billion, reflecting its substantial presence in the market. The company's P/E ratio stands at 24.85, indicating how much investors are willing to pay for each dollar of earnings, which is in line with the company's near-term earnings growth, as the PEG ratio for the last twelve months as of Q1 2024 is 0.82.
Additionally, Starbucks has demonstrated consistent revenue growth, with an 11.46% increase over the last twelve months as of Q1 2024. This financial performance is complemented by a healthy gross profit margin of 27.87%. An InvestingPro Tip highlights that Starbucks has raised its dividend for 14 consecutive years, showcasing a commitment to returning value to shareholders. Another tip points out that the company is trading near its 52-week low, potentially offering an attractive entry point for investors considering the company's historical profitability and dividend reliability.
For investors seeking a deeper analysis of Starbucks and additional strategic insights, there are more InvestingPro Tips available, which can help inform investment decisions. By using the coupon code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable insights. Currently, there are 10 additional tips listed in InvestingPro for Starbucks.
The upcoming Annual Meeting on March 13, 2024, may provide further clarity on the company's strategy and response to the SOC's concerns. With the next earnings date scheduled for April 25, 2024, stakeholders will be closely monitoring Starbucks' financial performance and management commentary.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.