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It\u2019s been a busy couple of days for Rachel Ruggeri: She\u2019s been named the interim CEO<\/a> of Starbucks<\/a> and sold hundreds of thousands of dollars worth of stock in the coffee behemoth she now finds herself leading.<\/p>\n Ruggeri\u2019s sale is not, however, a reflection of her self-confidence. <\/p>\n Instead, it was a pre-planned trade scheduled in November of last year, carried out by a third-party broker to mitigate any concerns of insider trading.<\/p>\n Ruggeri sold the 3,750 stocks yesterday for $341,850 under a Rule 10b5-1 trading agreement, which allows business insiders and executives to trade their shares in a publicly listed company without risk of breaking the law.<\/p>\n Strangely, while Ruggeri herself would have had no influence over the sale, her appointment may have led to the agreement being triggered.<\/p>\n Yesterday, the $108 billion Seattle giant announced that CEO Laxman Narasimhan would be stepping down from the top job\u2014and the board\u2014with immediate effect.<\/p>\n Incoming CEO Brian Niccol, who joins from Chipotle<\/a>, will take over the corner office on September 9.<\/p>\n In the meantime, Ruggeri, currently serving as Starbucks\u2019s CFO, will lead the company.<\/p>\n The market is pleased by the decision, with the stock jumping from $77 a share to $91 a share\u2014the point at which Ruggeri\u2019s stocks were offloaded onto the market. At the time of writing, Starbucks\u2019s shares are up nearly 30% over the past five days.<\/p>\n A Rule 10b5-1 trading agreement can be triggered either by a share price hitting a certain point, or by a certain date being reached. <\/p>\n The trading agreement is subject to a strict set of rules, which includes handing the stocks to an independent party\u2014in this case, Rhode Island-based Fidelity Brokerage\u2014who has the exclusive knowledge of when a sale or purchase will be made.<\/p>\n Furthermore, a formula must be employed to determine the amount, price, and date of the sale to remove any human bias.<\/p>\n The method is employed by a range of top executives, including Nvidia<\/a> CEO Jensen Huang.<\/p>\n In Ruggeri\u2019s situation, the stock sale was made up entirely of restricted stocks vesting, which had been awarded to her as part of her compensation packages over the past two years.<\/p>\n The CFO-turned-CEO\u2019s recent selloff also represents a fraction of her assets still remaining vested in the company. The SEC filing seen by\u00a0Fortune<\/em>\u00a0confirms<\/span> that Ruggeri still owns more than 1.13 million shares or other units in Starbucks.<\/p>\n Starbucks did not respond to Fortune\u2019s<\/em> request for comment.<\/p>\n While overall, Starbucks has enjoyed massive growth since its launch in the 1970s, the past couple of years have not been without hiccups.<\/p>\n Howard Schultz, who joined the business ten years after its inception, has been a yo-yo CEO, repeatedly called back to the business in times of crisis in order to steer it back on track. <\/p>\n As a result, Schultz served in the top job three times: from 1987 to 2000, following the financial crisis from 2008 to 2018, and again during the COVID-19 pandemic from 2022 to 2023.<\/p>\n The most recent CEO to take over after Schultz\u2019s tenure was Narasimhan, who was in the top job for only 17 months.<\/p>\n During that time, Starbucks struggled to navigate a\u00a0complicated consumer environment<\/a>,\u00a0union negotiations<\/a>\u00a0with employees, and\u00a0tensions in the Middle East<\/a>.<\/span><\/p>\n In its latest earnings release, the business revealed that comparable global store sales were down 3% while net revenues declined 1% to $9.1 billion.<\/p>\n Schultz said of Nichol\u2019s appointment: \u201cHis retail excellence and track record in delivering extraordinary shareholder value recognizes the critical human element it takes to lead a culture and values driven enterprise. <\/p>\n \u201cI believe he is the leader Starbucks needs at a pivotal moment in its history. He has my respect and full support.\u201d<\/p>\n<\/div>\n\nWhat is a Rule 10b5-1 trading agreement?<\/h2>\n
A bumpy time for Starbucks<\/h2>\n
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