Starbucks (SBUX) Chief Executive Howard Schultz may want a national conversation about race, but his largest shareholders appear to be taking a pass, the FOX Business Network has learned.
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The coffee maker’s top five institutional stock holders -- which combined own 23% of all outstanding shares -- all took a pass on commenting on whether they support Schultz’s controversial “Race Together” campaign, which was designed to start a conversation about racial issues inside Starbuck’s outlets.
But the plan was widely mocked, particularly on social media, as a superficial attempt to debate an important subject. Many people on outlets such as Twitter opined that the company should be focused more on selling more coffee, and improving its stock price, instead of delving into divisive social issues.
Schultz discussed the issue last Wednesday during Starbucks' annual meeting. The initiative finds it's roots in several meetings Schultz had with company officials last year where they discussed racial incidents in Ferguson, Mo., and New York, and the need for a national conversation about race.
Major shareholders, meanwhile, have chosen to remain out of the debate though their silence may also point to a general feeling that companies should not be mixing business with politics.
“They [big shareholders] keep their mouth closed publicly because they don’t want to get dragged into any issues, especially something like this,” Peter Henning, a business law professor at Wayne State University, said. “It’s turned out to be more incendiary than anyone thought."
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Among Starbucks' top five stocks holders, Fidelity Investments, the Vanguard Group, State Street Holdings, T Rowe Price Associates and Blackrock (BLK), press officials offered several reasons for not wanting to comment on the matter, from policies not to comment on individual stocks, to the fact that they may hold shares of Starbucks as a “passive investor” through an index of stocks. As a result, they have less active interest in the company’s corporate governance policies.
But a spokeswoman for Blackrock, which owns 19.4 million shares, seemed to sum of the general mood of large investors, commenting: “This is not something we'd discuss but thanks for reaching out!”
When asked about why the company’s top shareholders want little to do with Schultz’s race debate, a Starbucks spokesman said, “Anyone is welcome to join the conversation around ‘Race Together.’”
The public backlash against the campaign, which Schultz launched last week, may have prompted the company over the weekend to curtail its so-called “conversation starters” where Starbucks baristas had been instructed to scroll the words “race together” on cups of coffee and other beverages.