Former Starbucks CEO Howard Schultz plans to take 'necessary' steps to distance himself from financial interests if he runs for president in 2020
- Former Starbucks chief Howard Schultz plans to distance himself from his financial interests if he runs for president in 2020, according to his spokesman.
- Schultz is the largest individual shareholder of Starbucks, holding approximately 37 million shares with a market value of $2.5 billion, according to the latest data compiled by FactSet.
- "If he wants to get in this game and if he wants to be part of the game, I think the obvious thing is to deal with all of these issues, especially the stocks," says investment banker Christopher Whalen.
Billionaire former Starbucks chief Howard Schultz plans to distance himself from his financial interests if he makes a bid for the White House in 2020, CNBC has learned.
"If Howard Schultz decides to run for president, he will take the steps necessary to create an appropriate level of separation from any financial interests," Schultz spokesman Tucker Warren said in a statement first given to CNBC.
Schultz is the largest individual shareholder of Starbucks, holding approximately 37 million shares with a market value of $2.5 billion, according to the latest data compiled by FactSet. Schultz has a net worth of $3.5 billion, according to Forbes.
Schultz's spokesman declined to give details on how he would step away from his assets. Analysts say the most efficient methods for Schultz to avoid a potential conflict of interest is to put his Starbucks stake into a trust or conduct an asset sale.
"If he wants to get in this game and if he wants to be part of the game, I think the obvious thing is to deal with all of these issues, especially the stocks," said Christopher Whalen, an analyst and investment banker who runs his own firm, Whalen Global Advisors. "He will get a trustee and a lawyer to deal with it, and then he'll step away. You could also do an organized sale, but it's expensive and I don't think private equity firms would care."
A trust would allow a person close to Schultz to manage his Starbucks assets while he runs for president. He has said he is exploring the possibility of running as an independent.
A spokesman for Starbucks did not return a request for comment.
The development comes as Democratic leaders and donors slam Schultz for potentially splitting the vote and giving President Donald Trump a second term. This outrage has led to Democratic opposition research groups scrutinizing Schultz's past, including how Starbucks fared under his leadership.
Democratic super PAC American Bridge, for instance, gave CNBC a first look at early research on Starbucks, which focused on the coffee giant's history of settling lawsuits with its own employees during a period that included Schultz at the helm.
After publication, Andrew Bates, a spokesman for the committee, slammed Schultz for what he described as "pretend steps" toward avoiding conflicts of interest.
"Howard Schultz should spare us because we've heard all of this before. Donald Trump promised to distance himself from his countless conflicts of interest and look where that got us," Bates said. "No matter what pretend steps he takes, if he runs for president, the only American who comes out ahead is Donald Trump."
Similar issues cropped up when Trump ran and was elected to office.
After Trump became president-elect in 2016, ethics watchdogs called for the billionaire real estate tycoon to step down from leading the Trump Organization and put his stake into a trust. In January 2017, Trump transferred control of his business to his sons, Eric and Donald Jr., along with his chief financial officer, Allen Weisselberg.
"Together, Don, Eric, and Allen will have the authority to manage the Trump Organization and will make decisions for the duration of the presidency without any involvement whatsoever by President-elect Trump," Sheri Dillon, an attorney for Trump, said at the time.
Still, even those efforts didn't appease the Office of Government Ethics, which advises against federal conflicts of interests.
"This is not a blind trust, it's not even close," Walter Shaub, who was the organization's director when Trump took over the Oval Office, said at the time. "The only thing it has in common with a blind trust is the label 'trust.'"
Shaub resigned nearly six months after Trump took office after repeatedly criticizing the president's ethics.