Starbucks CEO Steps Out

Starbucks Chief Executive Howard Schultz speaks during the company's annual shareholder's meeting in Seattle, Washington March 18, 2015. REUTERS/David Ryder

The “grande” news of the day? Starbuck’s visionary leader Howard Schultz is stepping down as CEO of the coffee behemoth at the end of the year. Schultz’s surprise decision to step aside sent the chain’s stock sinking 3% in after-hours trading on Thursday.

However, Starbucks management said Schultz isn’t going away completely. Effective April 3 of next year, he will become executive chairman, where he will focus on innovation, the company’s premium offerings, and social impact. Current chief operating officer Kevin Johnson, a tech industry veteran, will replace Schultz as CEO.

“This is a good thing. I’m not leaving the company,” Schultz told CNN’s Poppy Harlow by phone on Thursday. The 63-year-old said he had been planning the move for at least a year, and was looking forward to new challenges and opportunities. Asked if he’s going to Washington, Schultz laughed and said, “No, I’m not going to Washington.” Instead, Schultz emphasized a desire to focus on the company’s social impact initiatives. “Given the state of things in the country, there is a need to help those left behind,” Schultz told CNN.Schultz said he also wants to focus on Starbucks’ premium offerings, such as the roasteries that allow customers to watch freshly-roasted beans arrive.

Separately, in a conference call, Schultz said Johnson brings “unparalleled understanding of market dynamics” and he deserves a “tremendous amount of credit” for the company’s recent record results. During that call, Johnson called Schultz “among the world’s most iconic leaders and entrepreneurs.” Johnson seemed to choke up and his voice broke when he said it had been a “privilege to work side-by-side with Howard.”

Schultz joined Starbucks in 1982 as director of retail operations, and he helped turn the company into a retail powerhouse, and an iconic American brand. He stepped down as CEO in April 2000 to concentrate on executing the company’s global strategy.

But Starbucks struggled without him at the helm and seemed to have lost its way. Schultz returned as CEO in 2008 and helped guide the coffee giant through the Great Recession and get it back on track. Today, Starbucks is valued at $84 billion and it has more than 24,000 retail stores in 70 countries.

Schultz has also been outspoken on a variety of social issues, including raising the minimum wage, offering employees free college tuition, and even pushed Starbucks to open a store in Ferguson, Missouri after the city’s violent protests.

Now, that’s a tall order.