Starbucks catches the “oopsies,” too…

November 30, 2010

Are the “oopsies” contagious? We just found signs that Starbucks (SBUX) may be suffering from the same affliction as Raymond James Financial (RJF), which disclosed last week in an amended 10-K that it forgot to disclose a loan for $1 million Canadian dollars that it made to an executive in August, 2008.

In the 10-K that Starbucks filed last week, the company didn’t actually confess that it had forgotten to file anything. We found the oopsie by scanning the list of exhibits and noticed that Starbucks is just now filing an employment agreement that it agreed to nearly 14 months ago.

The Agreement, attached as Exhibit 10.32 and dated October 8, 2009, is with Kalen Holmes, the Executive Vice President, Partner Resources, who came to Starbucks after serving a 6-year-stint in various roles at Microsoft. Prior to working for Bill Gates, she worked for a variety of companies including Bristol-Myers Squibb Company, PepsiCo, Inc., Enron Corporation, pcOrder.com, Inc., and Trilogy Inc.

Holmes came in with a base salary of $400K, a target bonus of $260K, and a signing bonus of $200K. The bigger money, though, came in the form of equity grants. Starbucks gave Holmes stock options worth $1.05 million that would vest over 4 years (due to the lag in filing the agreement, there are less than 3 years to go). She also got RSUs worth $750K; those also had a 4-year vesting schedule.

In addition to the usual benefits, Starbucks also agreed to pay Holmes’ COBRA health insurance premiums until the mandatory waiting period passed and she could sign up for the company’s health insurance. It also promised to buy her a $1.2 million life insurance policy, let her participate in the management deferred compensation plan, and provide her with executive physicals.

Of course, everyone forgets things from time to time, and we’re not holding Starbucks’ attorneys and accountants to a different standard than we hold everyone else. But we did find it curious that they’re just now filing the agreement. They simply put a checkmark in the column “Filed Herewith.” Maybe we’re just sticklers, but we think that full disclosure is the better way to go.

Image source: Dimitri N. via flickr

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