Brian Niccol’s first big move as CEO of Chipotle Mexican Grill (NYSE: CMG) in 2018 was a corporate move, uprooting the burrito chain from its longtime HQ in Denver to Newport Beach, where it currently leases some 23K SF in Newport Center.
A short time later, Chipotle established its R&D base at UCI Research Park in Irvine, where it takes an additional 22K SF of space at what it refers to as its “Cultivate Center.”
The results of the OC relocation speak for themselves. Chipotle boosted its stock nearly 10-fold during Niccol’s tenure to over $70B, making the firm OC’s most valuable public company; see Nancy Luna’s front page story for more on the chain’s future after the departure of Niccol to Starbucks Corp. (Nasdaq: SBUX).
A HQ move to OC for the coffee giant, which reportedly leases nearly 1M SF of space in Seattle, isn’t in the cards. Neither is a move to the Pacific Northwest for Niccol; regulatory filings indicate that his employment contract doesn’t require him to relocate from OC.
Instead, Starbucks will set up “a small remote office in Newport Beach” for its new chairman and CEO, and he’ll get use of a company plane to make trips to the coffee co.’s base.
The median CEO pay for S&P 500 companies in 2023 was $15.7 million, according to data from the Wall Street Journal.
Brian Niccol topped that figure with a 2023 pay package running about $22.5M, factoring in bonuses and stock awards, according to Chipotle’s latest proxy report.
He’s expected to do even better at Starbucks. His annual equity awards alone will total about $23M, regulatory filings indicate.
“In his first year, his pay package could be worth as much as $116.8 million if the company hits its targets and it fully vests,” noted a report from CNBC last week.
Given that Starbucks’ stock jumped over $20B the day the news of his hiring broke, the pay package appears worth it. The coffee chain is now worth about $106B.
Two years ago, a $91M flex office deal just off Red Hill Avenue in Tustin caught my eye for what appeared to be a poorly negotiated local government real estate deal.
The 120K-SF building, used by the Sheriff-Coroner’s Technology Division, was bought by the county for a sky-high $758 per square foot, nearly double the going PSF price for comparable buildings.
Just down the street in Irvine, there’s a new example of questionable local government decisions. The City of Irvine last week agreed to spend about $98M, or $890 PSF, for a new 110K-SF industrial building at 17300 Red Hill Ave. that will be used for badminton and other indoor gym uses once it is built.
That price doesn’t include tenant improvements.
Among warehouses in OC larger than 100K SF, only 3 in the past 2 years have traded hands for more than $400 PSF, according to CoStar data.
