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Starbucks Makes a Bold Move: Ties Executive Pay to Diversity Initiatives

As the nation continues to experience racial turmoil, renewed focus on social justice movements, ongoing conversations over police brutality and an extremely divided political landscape, the need for greater diversity and inclusion is becoming more important than ever. A recent move by Starbucks highlights how some in the corporate sector are recognizing that urgency and promoting those goals with the business world’s most valuable and effective tool: money.

Making Sure That Inclusion Efforts Make a Difference

One of the criticisms frequently leveled at corporate America’s diversity and inclusion efforts is that they are all talk and no action. It’s easy to state grand goals and objectives, but where is the concrete action? Where are they demonstrating the dedication of resources to achieve those goals?

In an article for The Business Journals’ Biz Women, Anne Stych explains how coffeehouse giant Starbucks is taking some concrete measures to achieve its own diversity goals, measures sure to catch the attention of the company’s leadership.

Starbucks will link executive pay to efforts to increase diversity at the company with a target of employing 30% Black, indigenous and people of color employees at the corporate level and 40% in retail and manufacturing by 2025,” Stych writes. “The company said it will incorporate goals around building and retaining inclusive and diverse teams into its executive compensation programs beginning in fiscal year 2021 and will create an analytics tool for senior leaders to track diversity.”

In addition, Stych writes that anti-bias content will be embedded into all hiring, development and performance assessment processes at Starbucks and that leaders at the vice president level and above will be required to complete anti-bias training and racial bias courses.

Big Benefits From Tying Executive Compensation to I&D Goals

Tying executive compensation to diversity goals might seem revolutionary, but it makes perfect sense. For years, we’ve been making the case that diversity and inclusion are more than just feel-good notions; they have concrete and positive impacts to the bottom line. It makes sense then that executives should be incentivized to promote these goals, just as they would be incentivized to promote cost-saving measures or productivity.

The move by Starbucks is already gaining a lot of attention in the media. Hopefully other large companies will take notice and follow suit. Ideally, linking executive pay to diversity goals will be taken a step further to also include inclusion metrics as well, instead of focusing purely on headcounts. But if there is room for

improvement and further development in Starbucks’s plans, this iteration is certainly another step in the right direction.

What steps will you take to ensure your I&D efforts are making a real difference?

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Are you tired of workplace diversity training that does not link to business? Are you tired of tactics that don’t drive business results? InclusionINC has inclusion training solutions and strategic consulting that link inclusion to employee engagement, productivity, innovation and retention, moving inclusion beyond tactics to a critical business strategy.


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