Howard Schultz will return as CEO in an interim role and also rejoin the board. Schultz led the company for three decades before handing the CEO reins to Johnson.
In a statement, Johnson said he signaled a potential retirement to the board a year ago.
“I feel this is a natural bookend to my 13 years with the company,” Johnson said.
Johnson joined the Starbucks board in 2009 and became COO and president in 2015. He has more than three decades of experience working at tech companies including IBM, Juniper Networks (he was CEO from 2008 to 2013), and Microsoft, where he led worldwide sales for two years before running the Windows and Online Services division for three years, working closely with Bill Gates and Steve Ballmer.
During his five-year tenure as CEO, Johnson helped Starbucks adopt more digital technology and grow its business in China. Over the past several years Starbucks has evolved into a tech company that sells coffee, similar to other retail giants going through digital transformation and investing heavily in the cloud.
Shares of Starbucks rose about 50% since Johnson took over as CEO. The stock was up more than 5% early Wednesday.
The announcement comes just before Starbucks hosts its annual shareholders meeting Wednesday. The company’s board has formed a working committee to conduct an ongoing search for Johnson’s permanent replacement.
“On behalf of the entire Board, I want to express our sincerest thanks to Kevin for his leadership of Starbucks. Kevin and the entire executive team stepped up to the challenge of the pandemic and navigated one of the most difficult periods in modern history,” Mellody Hobson, Independent Starbucks Board of Directors chair, said in a statement.