SBUX » Topics » Fiscal 2008 Director Compensation

This excerpt taken from the SBUX DEF 14A filed Jan 22, 2009.
Fiscal 2008 Director Compensation
 
                         
    Fees Earned
             
    or Paid in
    Option
       
    Cash
    Awards
    Total
 
Name
  ($)     ($)(1)     ($)  
 
Barbara Bass
          285,589       285,589  
William W. Bradley
          281,516       281,516  
Mellody Hobson
          316,644       316,644  
Olden Lee
          281,516       281,516  
James G. Shennan, Jr. 
    120,000       142,799       262,799  
Javier G. Teruel
          369,303       369,303  
Myron E. Ullman, III
          281,516       281,516  
Craig E. Weatherup
          285,589       285,589  
 
 
(1) These amounts reflect the aggregate compensation costs for financial statement reporting purposes for fiscal 2008 under Statement of Financial Accounting Standards (“SFAS”) No. 123(R), “Share-Based Payment” (“SFAS 123R”), for annual stock options granted in fiscal 2008 and fiscal 2007, and for Ms. Hobson’s and Mr. Teruel’s initial grants, which were granted in fiscal 2005. These amounts do not reflect amounts paid to or realized by the director for fiscal 2008. The full grant date fair value of the stock option awards granted in fiscal 2008 to each director other than Mr. Shennan (who elected to receive his retainer in cash), computed in accordance with SFAS 123R, was $285,589. The SFAS 123R full grant date fair value of the stock option award granted in fiscal 2008 to Mr. Shennan was $142,799. For information on the method and assumptions used to calculate the compensation costs, see Note 14 to our audited consolidated financial statements in our 2008 10-K. In calculating expense for non-employee director stock options for financial statement reporting purposes, we do not assume any service-based forfeitures. As of September 28, 2008, the aggregate number of shares underlying outstanding option awards for each non-employee director were: Ms. Bass — 546,039 shares; Mr. Bradley — 128,654 shares; Ms. Hobson — 127,534 shares; Mr. Lee — 188,892 shares; Mr. Shennan — 472,824 shares; Mr. Teruel — 127,534 shares; Mr. Ullman — 188,892 shares; and Mr. Weatherup — 547,268 shares.
 
Former Deferred Compensation Plan
 
Non-employee directors formerly could defer all or a portion of their compensation in the form of unfunded deferred stock units under a directors’ deferred compensation plan. The board terminated future deferrals under the plan during fiscal 2005, so no further compensation may be deferred. Amounts previously deferred are unaffected and deferred stock units credited to non-employee directors who had previously deferred compensation under the plan remain outstanding. We do not provide above-market or preferential earnings on these amounts. Deferred stock units are settled in an equal number of shares of Starbucks common stock when plan participants leave the board. Deferred stock units cannot be voted or transferred. The number of deferred stock units held by each director is shown in the footnotes to the beneficial ownership table on page 17.


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Director Stock Ownership Guidelines
 
The board adopted stock ownership guidelines for non-employee directors in fiscal 2003. The original guidelines required a $200,000 investment within four years. In May 2007, the board revised the guidelines in tandem with the increase to non-employee director compensation described above. The revised guidelines increase the required investment in our common stock by $40,000 to $240,000, so the guidelines will continue to correspond to the value of annual compensation. All future non-employee directors will have four years from their election to the board to achieve the $240,000 investment. Existing directors have two years from their original deadline to achieve the additional $40,000 investment. Stock options do not count toward meeting the requirement. Each director must continue to hold the shares purchased as a result of the director’s investment for as long as he or she serves on our board. All non-employee directors are in compliance with the guidelines. Ms. Hobson and Mr. Teruel have not yet served on the board for four years and are working toward making the required investment.


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Fiscal 2007 Director Compensation
 
                         
    Fees Earned
             
    or Paid in
    Option
       
    Cash
    Awards
    Total
 
Name
  ($)     ($)(1)     ($)  
 
Barbara Bass
          261,247       261,247  
William W. Bradley
          239,583       239,583  
Mellody Hobson
          400,981       400,981  
Olden Lee
          254,421       254,421  
James G. Shennan, Jr. 
    100,000       130,631       230,631  
Javier G. Teruel
          468,338       468,338  
Myron E. Ullman, III
          254,421       254,421  
Craig E. Weatherup
          261,247       261,247  
 
 
(1) These amounts reflect the aggregate compensation costs for financial statement reporting purposes for fiscal 2007 under Statement of Financial Accounting Standards (“SFAS”) No. 123(R), “Share-Based Payment” (“SFAS 123R”), for stock options granted in fiscal 2007 and fiscal 2006, and for Ms. Hobson’s and Mr. Teruel’s initial grants, which were granted in fiscal 2005. These amounts do not reflect amounts paid to or realized by the director for fiscal 2007. The full grant date fair value of the stock option awards granted in fiscal 2007 to each director other than Mr. Shennan (who elected to receive his retainer in cash), computed in accordance with SFAS 123R, was $261,247. The SFAS 123R full grant date fair value of the stock option award granted in fiscal 2007 to Mr. Shennan was $130,631. For information on the method and assumptions used to calculate the compensation costs, see Note 13 to our audited consolidated financial statements in our 2007 10-K. In calculating expense for non-employee director stock options for financial statement reporting purposes, we do not assume any service-based forfeitures. As of September 30, 2007, the aggregate number of shares underlying outstanding option awards for each non-employee director were: Ms. Bass — 514,556 shares; Mr. Bradley — 97,171 shares; Ms. Hobson — 96,051 shares; Mr. Lee — 157,409 shares; Mr. Shennan — 457,082 shares; Mr. Teruel — 96,051 shares; Mr. Ullman — 157,409 shares; and Mr. Weatherup — 515,785 shares.


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Former Deferred Compensation Plan
 
Non-employee directors formerly could defer all or a portion of their compensation in the form of unfunded deferred stock units under a directors’ deferred compensation plan. The board terminated future deferrals under the plan during fiscal 2005, so no further compensation may be deferred. Amounts previously deferred are unaffected and deferred stock units credited to non-employee directors who had previously deferred compensation under the plan remain outstanding. We do not provide above-market or preferential earnings on these amounts. Deferred stock units are settled in an equal number of shares of Starbucks common stock when plan participants leave the board. Deferred stock units cannot be voted or transferred. The number of deferred stock units held by each director is shown in the beneficial ownership table on page 16.
 
Director Stock Ownership Guidelines
 
The board adopted stock ownership guidelines for non-employee directors in fiscal 2003. The original guidelines required a $200,000 investment within four years. In May 2007, the board revised the guidelines in connection with the increase to non-employee director compensation described above. The revised guidelines increase the required investment in our common stock by $40,000 to $240,000, so the guidelines will continue to correspond to the value of annual compensation. All future non-employee directors will have four years from their election to the board to achieve the $240,000 investment. Existing directors have two years from their original deadline to achieve the additional $40,000 investment. Vested stock options do not count toward meeting the requirement. Each director must continue to hold the shares purchased as a result of this investment for so long as he or she serves on our board. All non-employee directors are in compliance with the guidelines. Ms. Hobson and Mr. Teruel have not yet served on the board for four years and are working toward making the required investment.


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