- Former StarbucksCEO Howard Schultz’s biggest weakness as a likely presidential candidate is that his net worth is estimated to be $US3.5 billion.
- While Schultz often speaks of his humble beginnings, he is considerably less comfortable with accepting his current status as a billionaire.
- This billionaire blind spot leaves him unprepared for a 2020 presidential campaign where “class warfare” promises to be a major issue.
- “I know he would shudder to call himself an elitist, but, what the hell, he just went on Gwyneth Paltrow’s podcast,” one former Starbucks employee who worked closely with Schultz told Business Insider.
Howard Schultz is far from perfect, according to those who know him and have worked with him.
The former Starbucks CEO takes criticism poorly and is obsessed with control, according to two former Starbucks corporate employees. He overestimates his abilities, as in the case of his acquisition of the Seattle SuperSonics. Less than two weeks after announcing that he is “seriously considering” running for president, he has alienated many of his potential allies on the left.
But, Schultz’s biggest problem is that he has simply been too rich for too long, leaving him disconnected from the average American.
Schultz’s net worth is roughly $US3.5 billion, according to Forbes, making him one of the 300 richest living Americans.
While Schultz left Starbucks in 2018, he still owns more than 37.7 million shares – or roughly 3% – of the company’s stock. In 2018, Schultz’s salary at Starbucks was $US1, and he received $US30.1 million in total compensation from the company, including stock and options awarded.
Schultz sees his life as proof that the American dream is alive and well. In speeches and his own writings, he frequently highlights his childhood growing up in public housing in Brooklyn.
“My life experience is proof that the American Dream is in fact real,” he said in a speech at Purdue University on Thursday. “And that those who achieve it can pay it forward – and help others achieve it as well.”
However, Schultz’s success hasn’t given him unique insight into the American dream. Instead, it has made him unable to connect with the average American or embrace new policies.
Schultz can’t deal with the fact that he is rich
Schultz admits that he is uncomfortable dealing with his status as someone who is not just in the 1%, but the top 0.001% of the top 1%.
“I must say that writing about my own experience with money as a wealthy adult is less comfortable for me than writing about life as a child with my struggling father,” Schultz writes in his most recent book “From the Ground Up.”
Business Insider spoke with two former Starbucks corporate workers who worked with Schultz, under the condition of anonymity to allow them to speak frankly without fear of professional repercussions. According to both, Schultz would hate to think of himself as elitist, but they say it is clear he has become disconnected from the average American.
“I know he would shudder to call himself an elitist, but, what the hell, he just went on Gwyneth Paltrow’s podcast,” one former Starbucks employee who worked closely with Schultz in the early 2000s said. “Talk about talking to yourself.”
“The guy has been living in the world of the ultra-rich for decades,” she added.
Schultz reimbursed Starbucks for $US216,124 in rides on company-owned aircraft in 2018. Over the years, he has reportedly bought a $US40 million apartment in New York, a $US33 million estate in Hawaii, and, back in the ’90s, he infuriated neighbours when he and his wife reportedly built a 100-foot driveway to their house through a public park to their Seattle home.
A representative for Schultz did not immediately respond to Business Insider’s request for comment on whether his wealth made him an unsuitable candidate.
Schultz’s billionaire blindspot
This week, Schultz saw a new wave of backlash after a clip from an interview went viral in which he objected to being called a billionaire, calling the term a “catchphrase.”
“I would rephrase that and say people of means have been able to leverage their wealth and their interest in ways that are unfair,” Schultz said in the interview with New York Times reporter Andrew Ross Sorkin.
While Schultz went on to acknowledge wealthy people’s and organisations’ undue influence, he was mocked for his apparent preference for the term “people of means” over “billionaire.” The gaffe was just one instance of how – in his own words and according to those who have worked with him – Schultz is uncomfortable with his immense wealth, instead preferring to highlight his humble roots.
That could prove to be a dangerous blindspot during an election in which class is likely to take center stage, especially on the left. Rep. Alexandria Ocasio-Cortez has argued that it is “immoral” for billionaires to exist in a society with widespread poverty, an opinion Schultz has called “un-American.”
“The left is running on a level of class warfare that crosses over into Marxism,” Brian Riedl, a senior fellow at the right-leaning Manhattan Institute, recently told INSIDER’s Eliza Relman. “When we’re debating whether billionaires should exist, that is class warfare.”
Meanwhile, many progressives are doubling down.
“Class war is the only war that’s necessary and apparently the only one conservatives wouldn’t support waging for two decades without end,” Sean McElwee, a progressive activist and co-founder of Data for Progress, told INSIDER.
Muddled middle ground
Schultz hopes to prove the middle ground between a left obsessed with class warfare and the Republican party under President Donald Trump, who Schultz says has “poisoned our culture.” In his speech on Thursday, Schultz repeatedly spoke out against the “far right” and “far left.”
Schultz has spoken out against federal jobs guarantees and universal healthcare, saying the left does not have a feasible way to fund the programs. He has floated the option of targetingSocial Security and Medicare to reduce the national debt. Even as he criticises Republicans and says he should pay higher taxes, Schultz is completely divorced from many accepted liberal policy stances.
At the same time, Schultz has not provided many concrete details on policies beyond stressing the importance of “common sense” solutions. While he says that every person should have the chance to live the American dream, he has not come up with new solutions to the reality that few people will experience his monumental rise.
Further, Schultz’s socially liberal and fiscally conservative “views put him on the radical fringe in the United States: According to data collected by the Voter Study Group, the percentage of the 2016 electorate that held right-of-center views on economic matters – and left-of center ones on ‘identity’ issues – was a whopping 3.8 per cent,” New York magazine reports.
While Schultz cites the fact that many Americans are dissatisfied with the current state of politics, it seems that few people are interested in the former Starbucks CEO as an alternative.
A survey from data science firm Optimus, released on Thursday, found that of those familiar with Schultz, 18% have a favourable opinion, while 40% have an unfavorable opinion.
“It’s not just that he’d help re-elect Donald Trump, but that he came across as a spoiled billionaire more concerned with protecting his fellow billionaires from paying a lot of taxes than protecting Medicare and Social Security for the middle class,” Geoff Garin, a Democratic pollster, told Bloomberg.
“He is quite a patriotic guy,” the former Starbucks executive told Business Insider last week. “He believes the American dream thing, there’s no doubt about that.”
“But he’s also not offered up many ideas,” he continued. “It’s more, trust me, I’m the representation of the American Dream and I can help. … There’s been a distinct lack of substance.”
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