Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Starbucks has awarded its new chief executive Brian Niccol cash and stock potentially worth more than $100mn, one of the largest hiring packages in US corporate history and four times larger than the sign-on deal offered to his ousted predecessor.
If paid out in full, the package — revealed in a regulatory filing on Wednesday — would make Niccol one of America’s highest paid CEOs. The contract would be worth $113mn if he hits the targets Starbucks has set for him.
Starbucks named Niccol as its fourth boss in less than three years on Tuesday after the surprise ousting of CEO Laxman Narasimhan, the former Reckitt Benckiser chief executive.
Advertisement
Niccol will arrive at Starbucks next month from burrito chain Chipotle Mexican Grill, where since 2018 he led a revival in its business and reputation after a series of food safety scares. Shares of Chipotle gained almost 800 per cent during his tenure.
To start, Niccol will receive a $10mn cash bonus upfront and another $75mn in equity grants designed to pay out over time, to compensate him for bonuses and unvested stock he left behind at Chipotle.
Annually, Niccol will earn a $1.6mn salary plus a target cash bonus worth about $3.6mn depending on how Starbucks performs. That is in addition to a long-term equity grant with an annual target value of $23mn, to be paid out over multiple years.
“The (Starbucks) board’s willingness to pay such a high price is testament to the faith they have in Niccol,” said Ben Silverman, vice-president of research at Verity, an analytics firm. “But he’s going to have to prove that he’s worth it because his annual compensation is about 75 per cent higher than that of his predecessor.”
Last year Niccol’s total pay at Chipotle was $22.5mn, while the value of his unrealised gains from past equity incentive grants was more than $82mn, according to a regulatory filing.
Advertisement
The package from Starbucks comes with an unusual perk: Niccol would not be required to move to its Seattle headquarters, according to the filing. Instead, the company will establish a “small remote office” in Newport Beach, California — the city to which Niccol had moved Chipotle’s headquarters from Denver — plus pay for an assistant of his choosing.
Only five other executives were awarded pay packages worth more than $100mn in 2023, according to a June report from Equilar, a pay data company, of the largest US companies by revenue. Such contracts are particularly unusual outside the financial and technology sectors.
Niccol’s target annual remuneration would be 83 per cent above the median target at other S&P 500 restaurant groups, such as Chipotle, Darden, Yum Brands and McDonald’s, said Courtney Yu, director of research at Equilar.
“Brian Niccol has proven himself to be one of the most effective leaders in our industry, generating significant financial returns over many years,” Starbucks said, adding that his pay was “tied directly to the company’s performance and the shared success of all of our stakeholders”.
When Starbucks hired Narasimhan from UK-based consumer products group Reckitt in 2022, he was offered a package valued at more than $28mn. This included a base salary of $1.3mn, annual cash bonuses worth up to $2.6mn and annual equity awards with a target value of $13.6mn.
Advertisement
In addition, Starbucks agreed to pay Narasimhan a $1.6mn signing on bonus in cash and $9.25mn in equity to compensate him for incentives he gave up by leaving Reckitt.
Starbucks did not detail the terms of Narasimhan’s severance payout.
Of course no intellectual presidential campaign speech on the economy is complete without an extended riff on immigrants and rape.
Donald Trump attacks Harris and Walz at Bozeman rally
Donald Trump criticized Vice President Kamala Harris over a perceived lack of press conferences and Gov. Tim Walz over his school bathroom policies in Minnesota.
Former president and self-described stable genius Donald Trump let a small crowd in a small venue in North Carolina know what was in store for them Wednesday: “We’re talking about a thing called the economy.”
Advertisement
Ah, yes. That thing is called the economy. I’ve heard of it.
He continued: “We’re doing this as an intellectual speech.”
Good. Many Republicans have encouraged Trump to stop babbling and hurling insults and steer his campaign onto some kind of coherent message.
Trump’s economic speech went off the rails predictably fast
“You’re all intellectuals today,” Trump said at the 2,400-seat Thomas Wolfe Auditorium in Asheville. “Today we’re doing it and we’re doing it right now and it’s very important, they say it’s the most important subject. I think crime is right there, I think the border is right there, personally. We have a lot of important subjects because our county has become a third-world nation, we literally are a third-world nation. We’re a banana republic in so many ways, and we’re not going to let that happen because we’re starting a free fall.”
Advertisement
Trump’s campaign spiral continues: Trump rambles, slurs his way through Elon Musk interview. It was an unmitigated disaster.
Hoo boy. Trump spends less time on track than a decommissioned train car. And so it was that his highly intellectual speech on a thing called the economy became, predictably, a dumb speech on a bunch of stuff that has nothing to do with the economy.
Like making fun of Democratic presidential nominee Kamala Harris’s laugh.
Trump proves again in North Carolina that insults are all he has
“For nearly four years Kamala has crackled as the American economy has burned,” Trump said, presumably mispronouncing “cackled,” because he struggles with words. “What happened to her laugh? I haven’t heard that laugh in about a week. That’s why they keep her off the stage, that’s why she has disappeared.”
Advertisement
Harris and her running mate, Minnesota Gov. Tim Walz, have been barnstorming states lately, doing far more events than Trump and drawing crowds significantly larger than the one that showed up Wednesday to hear him occasionally reference the economy.
“That’s the laugh of a crazy person, I will tell you,” Trump droned on. “She’s crazy.”
Labeling Harris crazy and mocking the way she laughs is the kind of thing Republicans keep advising Trump not to do. But he couldn’t help himself, later calling Harris an “incompetent socialist lunatic.”
‘Kamabla’? Trump isn’t just losing the election, he’s losing his mind.
Trump’s understanding of how the economy works seems dodgy at best
When he did deign to talk about the economy, Trump said things like this, referencing the brief stock market drop of last week, something he had labeled the “KAMALA CRASH!!!”:
Advertisement
“Many people say the only reason the stock market is up is because people think I’m going to win, did you ever hear that? But there was one day a couple weeks ago when they weren’t thinking that.”
OK, first off, nobody thinks Trump has anything to do with the stock market being up. And then to think last week’s drop – from which the market quickly recovered – happened due to a brief belief that Harris might win the election? That makes me wonder if Trump can even spell “economy.”
An economic speech about … rape?
Of course, no intellectual presidential campaign speech on the economy is complete without an extended riff on immigrants and rape, so Trump said: “Rape and murder, rape and beatings, rape and something else, and sometimes just immediate killing. These people are brutal. These are people that came out to the toughest jails anywhere in the world all over the world, and we can’t take them.”
Migrants commit crimes at far lower rates than U.S. citizens, but, you know … THE ECONOMY!
Advertisement
Speaking of the economy, while Trump was occasionally mentioning the word – providing no concrete policy proposals other than specious claims he will singlehandedly fix everything – the U.S. inflation rate hit its lowest point in three years.
The economy is simply not the disaster Trump and the GOP claim
And that gets to the heart of one of Trump’s biggest problems. The economy is doing reasonably well. Unemployment is low, the stock market has been breaking records and inflation continues to drop. Back in April, Moody’s chief economist Mark Zandi told CNBC: “The U.S. economy is leading the way for the global economy. It’s driving the global economic train.”
So, calling America a third-world country while taking childish swipes at the vice president’s laugh and fear-mongering about an immigrant crime wave that doesn’t exist? That’s not going to do much to swing voters who have been swinging in Harris’s direction since she took over the top of the Democratic ticket.
Republicans have been frustrated with the Trump campaign, and they know he needs to show voters something that will help him regain footing. His intellectual speech on that thing called the economy didn’t show anyone anything.
Advertisement
It was just another stumble from an aging candidate who can’t see that his schtick has gotten old.
Follow USA TODAY columnist Rex Huppke on X, formerly Twitter, @RexHuppke and Facebook facebook.com/RexIsAJerk
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
It is snack time in the packaged food industry. Confectionery giant Mars’ $36bn swoop on Pringles maker Kellanova could put dealmaking back on the table for other food and drink multinationals.
Privately held Mars, home of Snickers and Skittles, will pay $83.50 a share in cash for the maker of Cheez-it and Eggo waffles. The price represents a 42 per cent premium over Kellanova’s undisturbed three month average.
With few big US snacks groups left, a deal was never going to come cheap. Including Kellanova, there are just seven companies in the US packaged food sector with market values of over $20bn.
Advertisement
Mars is paying the equivalent of 16 times EV to forward ebitda for Kellanova. The median ratio for recent deals in the sector was around 15 times, according to JPMorgan. And the deal looks even pricier considering the difficult outlook for snacking — particularly the less healthy varieties that are in Kellanova’s portfolio.
Salty snacks have been the fastest-growing category in the packaged food sector over the past 14 years, with a compound annual growth rate of around 5.8 per cent between 2010 and 2023, according to Citi.
But that growth has slowed sharply this year. Inflation-wary consumers — particularly lower-income ones — are cutting back. At the same time, the rise of GLP-1 weight loss drugs like Ozempic, Wegovy and Zepbound is reshaping America’s waistlines. In a study by Morgan Stanley earlier this year, about two-thirds of GLP-1 drug users surveyed said they have cut back on snacking by over 50 per cent. Half of those surveyed also said they have cut back on sweets by more than 75 per cent or have stopped scoffing them altogether.
The strain is starting to show. Kellanova’s organic net sales were up 5 per cent in the first six months of the year. But that was largely driven by price increases. That strategy isn’t sustainable: consumers will buy less or choose private label brands.
Mars, as a private company with more than $50bn in sales, opted not to provide cost savings targets to justify its deal, but overlap between the two looks limited. Mars is clearly prepared to pay up to diversify away from its chocolate-heavy snack portfolio. Kellanova, which makes about half its $13bn annual sales from savoury chips and crackers, would do that. Still, $36bn is a big mouthful for what looks like a dubious defensive move.
Actor and stunt performer Andi Norris wears a full body suit covered in sensors — part of the behind-the-scenes process that makes video game characters come to life. Norris is part of the negotiating team for SAG-AFTRA, which is on strike against major gaming companies. The future of AI in game development has become a central issue.
Andi Norris
hide caption
toggle caption
Advertisement
Andi Norris
Jasiri Booker’s parkour and breaking movements are used to animate the title character in Marvel’s Spider-Man: Miles Morales video game.
“I stick to walls. I beat people up. I get beaten up constantly, get electrocuted and turn invisible,” the 26-year-old says.
He and other performers act out action sequences that make video games come to life.
Advertisement
But earlier this month, Booker picketed outside Warner Bros. Studios in Burbank, Calif., along with hundreds of other video game performers and members of the union SAG-AFTRA. They plan to picket again outside Disney Character Voices in Burbank on Thursday.
After 18 months of contract negotiations, they began their work stoppage in late July against video game companies such as Disney, WB Games, Microsoft’s Activision, and Electronic Arts. Members of the union have paused voice acting, stunts, and other work they do for video games.
YouTube
Advertisement
The bargaining talks stalled over language about protections from the use of artificial intelligence in video game production. Booker says he’s not completely against the use of AI, but “we’re saying at the very least, please inform us and allow us to consent to the performances that you are generating with our AI doubles.” He and other members of SAG-AFTRA are upset over the idea that video game companies could eventually replace him and now may see his very human stunts as simply digital reference points for animation.
In a statement, a spokesperson for the companies, Audrey Cooling, wrote, “Under our AI proposal, if we want to use a digital replica of an actor to generate a new performance of them in a game, we have to seek consent and pay them fairly for its use. These are robust protections, which are entirely consistent with or better than other entertainment industry agreements the union has signed.”
But video game doubles say those protections don’t extend to all of them – and that’s part of why they’re on strike.
Andi Norris, a performer on the union’s negotiating team, says that under the gaming companies’ proposal, performers whose body movements are captured for video games wouldn’t be granted the same AI protections as those whose faces and voices are captured for games.
Norris says the companies are trying to get around paying the body movement performers at the same rate as others, “because essentially at that point they just consider us data.” She says, “I can crawl all over the floor and the walls as such-and-such creature, and they will argue that is not performance, and so that is not subject to their AI protections.”
It’s a nuanced distinction: the companies have included “performance capture” in their proposal, including recordings of voice and face performers, but not behind-the-scenes “motion capture” work from body doubles and other movement performers that are used to render motion.
Advertisement
But Norris and others like her consider themselves “performance capture artists” – “because if all you were capturing is motion, then why are you hiring a performer?”
Andi Norris (left) and Jasiri Booker (right) picketing outside Warner Bros. Studios in early August.
Mandalit del Barco/NPR
hide caption
toggle caption
Advertisement
Mandalit del Barco/NPR
How motion capture works
Another Spider-Man double, Seth Allyn Austin, says video game performance artists work in studio spaces known as “volumes,” surrounded by digital cameras. They wear full body suits – a bit like wetsuits – dotted with reflective sensors captured by cameras, “So the computer can have our skeletons and they can put whatever they want on us.”
Those digitized moving skeletons are fed into video software and then rendered into animated video game characters, says mechanical engineer Alberto Menache, cofounder of NPCx, which develops AI tools to capture human motion data for video games and movies.“Motion capture,” he says, “They call it mocap for short.”
Advertisement
Menache is a pioneer in the field, and has consulted or supervised the visual effects for films including The Polar Express, Spider-Man, Superman Returns, and Avatar: The Way of Water. He’s also worked at PDI (which became DreamWorks Animation before shuttering), Sony Pictures, Microsoft, Lucasfilm and Electronic Arts. (Electronic Arts along with Activision, owned by Microsoft, are both involved in negotiations with SAG-AFTRA and currently involved in the work stoppage.)
Performers are outfitted with suits covered in sensors. Behind the scenes, visual effects crews use these sensors to construct a digital version of performers’ bodies.
Alberto Menache
hide caption
toggle caption
Advertisement
Alberto Menache
It takes an entire crew of digital artists, he says, to animate the motions created by human performers. “You need a modeler to build the character, then you need a person doing the texture mapping, as it’s called, which is painting the body or painting the Spider-Man suit,” he says. “Then you need a rigger, which is the person that draws the skeleton, and then you need an animator to move the skeleton. And then you need someone to light the character.”
From hand-drawn animation to motion capture
During the silent picture era more than a century ago, hand-drawn animators began using live-action footage of humans. They created sequences by tracing over projected images, frame by frame – a time consuming process that became known as “rotoscoping.” Filmmaker Max Fleischer patented the first Rotoscope in 1915, creating short films by hand-drawing over hand-cranked footage of his brother as the character Koko the Clown. According to Fleischer Studios, one minute of film time initially required almost 2,500 individual drawings. Fleischer went on to animate Popeye the Sailor and Betty Boop this way, as well as characters in Gulliver’s Travels, Mr. Bug Goes to Town, Superman and his version of Snow White.
Later, WaltDisney animators used rotoscope techniques, beginning with the 1937 film Snow White and the Seven Dwarfs.
Advertisement
By the 1980s, animation techniques advanced with computer generated images. During the 1985 Super Bowl, viewers watched an innovative 30-second commercial made by visual effects pioneer Robert Abel and his team. To create the ad for the Canned Food Information Council, they painted dots onto a real woman performer as the basis for a “sexy” robot character that was then rendered on a computer.
Canned Food Information Council, “Sexy Robot,” Super Bowl 1985
YouTube
Menache says similar technology had been used by the military to track aircraft, and in the medical field to diagnose conditions such as cerebral palsy. In the early 1990s, he innovated the technique by developing an animation software for an arcade video game called Soul Edge.
Advertisement
“It was a Japanese ninja fighting game. And they brought a ninja from Japan,” he says. “We put markers on the ninja and we only had a seven by seven foot area where he could act because we only had four cameras. So the ninja spent maybe two weeks doing motions inside that little square. It was amazing to see. And then it took us maybe a month to process all that data.”
Will human performers be needed in the future?
Besides Spider-Man, Seth Allyn Austin has portrayed heroes, villains and creatures in such games as The Last of Us, and Star Wars Jedi: Fallen Order. He says the technology has evolved even since he started a decade ago. He remembers wearing a suit with LED lights powered by a battery pack. “Whenever I did a flip, the battery pack would fly off,” he recalls. “I’ve had engineers have to try to solder the wires back on while I’m wearing the suit because it would save time. Luckily we’ve moved away from that technology.”
Seth Allyn Austin has performed stunts and voice work on various Marvel Spider-Man video games. He picketed at the Warner Bros. Studios in Burbank, Calif., in early August.
Mandalit del Barco/NPR
hide caption
Advertisement
toggle caption
Mandalit del Barco/NPR
These days, he says, some new technologies allow performers to watch themselves performing on screen as fully animated characters in 3-D, reacting to animated settings and other characters.
“We can adjust our performance in real time to make it look even more creepy or cool or realistic or heroic,” he says. “That’s the thing with AI, the tool is pretty cool. The tool can help us a lot. But if the tool is used to replace us, then it’s not the tool, it’s who’s wielding it.”
Advertisement
Menache says replacing human performers for video games or films is unlikely any time soon.
“If you want it to look real, you can’t animate,” he says. “There’s a lot of very good animators, but their expertise is mostly for stylized motion. But real human motion: Some people get close, but the closer you get to that look, the weirder it looks. Your brain knows.”
He likens it to the phenomenon of the uncanny valley – as he describes it, “that one percent that is missing, that tells your brain something’s wrong,” he says.
How AI is changing video game development
Menache is now developing AI technology that doesn’t require people to wear sensors or markers. “To train the AI, you need data from people,” he says. “We don’t just grab people’s motions, we get their permission.”
For example, he says he could hire and film team players from LA Galaxy, like he once did in the 1990s. Their moves could be stored to train the AI model to develop new soccer video games. “With our new system,” he says, “They won’t even need to go to the studio… You just need footage. And the more angles, the better.”
Advertisement
Menache has also developed technology for face tracking and “de-aging” actors, and to create “deep fakes” where actors’ faces can be scanned and altered. All of this, he says, still requires the consent of human performers.
Even AI still needs humans to train the models, says Menache. “I built a system for face tracking, and I trained it with maybe 2,000 hours of footage of different faces. And now it doesn’t need to be trained anymore. But a face is a lot less complex than a full body,” he says, adding that would need footage of “thousands and thousands of hours of people of different proportions.”
“Maybe you wouldn’t need people to do that anymore,” he says, “but the people that were used to train it should get their piece of whatever this is useful. That’s what the strike is all about. And I agree with that. We don’t use any data that is not under permission from the performers.”
Editor’s note: Many NPR employees are members of SAG-AFTRA, but are under a different contract and are not on strike.