Starbucks Reports First-Ever Customer Traffic Drop

[CorpGovActivist]

This is an economic sign that even NY-mindsetted "chief campaign strategists" should be able to understand: Story link

For the record, the Starbucks CEO and other C-level execs only pay Social Security tax on the first $97,500 of their payroll earnings: http://en.wikipedia.org/wiki/Social_Security_%28United_States%29#Taxation

To look up many companies' C-level exec comp: http://www.aflcio.org/corporatewatch/paywatch/

(The ticker is SBUX.)

According to the last proxy statement for Starbucks, filed with the SEC:

"Base Salary. In fiscal 2006, Mr. Donald’s annualized base salary, which was also determined in accordance with the factors used for all executive officers, was $1,000,000. His salary falls slightly below the median of salaries paid to chief executive officers by the comparator group companies.

Annual Incentive Bonus. For Mr. Donald, the EMB Plan provided a bonus target of $1,000,000, or 100% of base salary, for achievement of the objective performance goal. Under the terms of the EMB Plan, Mr. Donald earned a bonus of $2,000,000 for fiscal 2006. Because the Company achieved earnings per share at a level permitting payout of 200% of the target bonus, as approved by the Committee and the Independent Directors, the bonus paid to Mr. Donald was above the competitive target of the 50th percentile of bonuses paid to chief executive officers by target peer group companies.

Long-Term Incentive Compensation. On November 16, 2005, Mr. Donald was granted a stock option to purchase 966,469 shares of Common Stock. This grant, like the stock options granted to the other executive officers on the same date, reflects the Company’s and Mr. Donald’s performance for fiscal 2005."

On just his base, he escaped paying Social Security payroll tax on $902,500.

The cashier who rings up the java?

S/he pays Social Security on 100% of his/her earnings.

- Dave

[OHdem10]

1. HRC will not agree to raise the cap on Incomes who

earn over 97,000 as a way of solving the SS Problem.

[CorpGovActivist]

2. That One CEO Alone...

... is worth almost 10 more $97.5K earners paying into the system, just on his base salary.

With those kinds of numbers, the rate everyone pays could be decreased.

- Dave

[PSPS]

3. The FICA (Soc Sec) tax represents an extra 12.4% tax paid by those earning under $90,000. Crazy!

If you're not self-employed, your employer pays half. But it still comes out of your potential income.

[CorpGovActivist]

4. Employers Would Likely Balk...

... at paying the tax on the full amount of their payroll, and I'm sensitive to that argument.

Maybe after $97.5K, only the employee half should be taken out. That way, companies can offset it against the "potential income" they would have paid the high rollers.

*evil grin*

- Dave

[begin_within]

5. Maybe people finally took a taste of their bitter coffee.

[BuelahWitch]

6. Or maybe they finally came to their senses

And said, "Why the hell am I paying $4 for a fucking cup of coffee?" I could never understand the lure of Starbucks. I guess it all fit into that '90s coffeehouse "Friends" thing...

[begin_within]

7. I think it's funny that McDonalds won a coffee "taste test" about a year ago

McDonalds' coffee won over Starbucks and several others, at least in the report I saw. I like the iced tea at Starbucks, but their chai is terrible and I can't drink their coffee at all - too bitter.