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The great Starbucks tent revival, er, shareholder meeting

Starbucks CEO Howard Schultz.
Starbucks press photo
Starbucks CEO Howard Schultz.

The scene at Seattle’s McCaw Hall had the feel of a tent revival meeting. There was gospel music. "Lord, please let me go ... take me to the river, I want to go," Leon Bridges sang.

And there were testimonials — by employees, praising the policies and positions that Starbucks CEO Howard Schultz has taken.

See, protest in 2017 is not just about giant marches.

Another form was on display at Starbucks’ annual shareholders meeting Wednesday: CEO activism.  

Last month, over a hundred companies signed on to the court case against President Donald Trump's travel ban. And Schultz took it one step further with a vow to hire 10,000 refugees in five years.

At the tail end of the event Wednesday, a conservative shareholder-activist took the mic and changed the mood.

"Why were you willing to have Starbucks' reputation take a beating by attacking President Trump's executive order, when you lacked the courage to speak out against the Obama-Clinton travel ban?" asked Justin Danhof.

He’s a lawyer with the National Center for Public Policy Research, a conservative think tank that specializes in shareholder activism.

His question drew hisses from the crowd.

For the record, President Barack Obama did slow processing of visas for refugees from Iraq back in 2011 for six months. But he did not issue a comparable travel ban. 

And Schultz rejected the premise of the question:

“None of the things that we have tried to do as a company is based on politics, but it's based on principle and our core beliefs," Schultz said.

Whether it was about politics or not, analysts at Credit Suisse said the Starbucks brand did take a hit after Schultz took his stand against Trump's travel ban. And the stock price has dipped this year.

But it’s not clear if CEO activism has hurt Starbucks, or helped it. 

"Whether the increase in people who actually support Schultz on this issue is outweighed by people who are going to avoid Starbucks because of that? That’s an open question,” said Aaron Chatterji, a business school professor at Duke who studies CEO activism.

“To me, the stock price dip alone is not enough to indicate that. We’ll have to look a little deeper into their financial metrics looking forward to really understand the impact.”

[asset-pullquotes[{"quote": "'A lot of diversity issues are what you might call settled law inside companies.'", "style": "push"}]]Chatterji says retail companies like Starbucks take a risk when the CEO speaks out. 

“In a politically polarized environment like this, taking an overtly political stand is going to alienate a large part of your customers,” he said.

And it's not the first time Starbucks has gotten into hot water with conservatives. The company also faced a backlash back in 2013 after Schultz supported the same-sex marriage measure in Washington state. 

But there are internal pressures, too.

“If you take LGBT issues as an example, what’s different between now and 20 years ago is that a lot of diversity issues are what you might call settled law inside companies," Chatterji said. "They've already modified their policies and procedures to have non-discrimination, for example, as a core value.”

“When these issues come to the fore at the national or state level, it's much easier for companies to speak out because they've already made these changes inside their own companies. I think that makes political and social activism different.”

And since 2013, Starbucks’ share price is up nearly 100 percent. 

So does that mean some companies are drawn to activism because it's good for the bottom line?

"It hasn’t been definitively shown that doing good equals doing well, but there's certainly a lot of people in corporate America who are convinced that social responsibility is also good business," Chatterji said.

[asset-images[{"caption": "Denise Zaske (left) of Kirkland with friend Karen Legg at the Starbucks shareholders meeting at Seattle's McCaw Hall on Wednesday, March 22, 2017.", "fid": "134840", "style": "offset_left", "uri": "public://201703/20170322-zaske-legg.JPG", "attribution": "Credit KUOW photo/David Hyde"}]]Schultz is among them. He steps down as Starbucks CEO at the end of April – but he’ll still be charge of social policy for the company. 

And some shareholders at the Seattle meeting Wednesday said that’s a good thing.

"I absolutely love it. I think he's an amazing man,” said Denise Zaske, who got up at 4:30 a.m. for the drive in from Kirkland so she could get a seat.

“I am so appreciative of the stand that he's taken on humanitarian issues, and I am so proud to say I'm a Starbucks shareholder." 

Year started with KUOW: 2004