Each November, eligible partners receive Bean Stock after the Starbucks Board of Directors approves the annual grant. Your Starbucks Stock team will load your new grant to your Fidelity NetBenefits account and send notice when it’s viewable, usually by mid-December.
how your Bean Stock grant is valued and calculated, what actions to take when you receive your first grant and how it is taxed
When we talk about value, we’re referring to the economic value, which is an estimate of what your Bean Stock is worth at grant. The economic value of your grant is based on job for retail partners and annualized salary for non-retail partners as of the last day of Starbucks fiscal year.
To calculate the number of Bean Stock RSUs granted, take the economic value of your grant and divide it by the closing price of Starbucks stock on the grant date.
Let’s say that the economic value of your Bean Stock is $500 and the closing price of Starbucks stock on the grant date is $50.
$500 ÷ $50 = 10
Your Bean Stock grant would be 10 RSUs.
Economic values at grant don’t change much year over year, but because stock price fluctuates over time, this impacts the number of RSUs you receive from one year to the next.
Let’s say that the economic value of your Bean Stock is still $500, but the closing price of Starbucks stock on the grant date is $80.
$500 / $80 = 6.25 *
*All RSUs granted will be rounded up to the nearest share
Your Bean Stock grant would be 7 RSUs
You can see that while the economic value of your grant did not change, the higher stock price resulted in fewer RSUs granted.
Open your account. Visit Fidelity NetBenefits and click on the U.S. Employees tab to log in. If this is your first grant, you will need to create a password and open your account by clicking Register as a new user.
Accept your Bean Stock grant. After log in, you will see an Action Needed alert at the top of your Stock Plans page. Click Accept your grant(s) today and follow the steps. After you have accepted your grant, click Go to Summary. This shows the total value of your grant(s) and detail of individual grant(s).
Get your account information electronically and save paper. Under Profile, add your email address in the Personal & Contact Information section.
No taxes are due when Bean Stock is granted, but when your Bean Stock vests, this is considered a taxable event.
On the vest date, depending on where you work and/or live, you may be required to pay income tax on your gain (taxable income). Your gain is determined by taking the number of shares vesting multiplied by the Starbucks closing stock price on the vest date. If taxes are due, Starbucks will withhold taxes by reducing the number of vested shares equal to the amount of tax you owe. This is referred to as netting of shares. The remaining shares will be deposited in your Fidelity account shortly after the vest date.
Starbucks is responsible for reporting the taxable income to the tax authorities at vesting. The taxable income will also be reported through payroll, and the amount of tax withheld in shares will be detailed on your pay statement.
Partners who have been granted RSUs while employed by Starbucks in other countries may have additional taxes that need to be withheld through local payroll at the time of vesting.
TAX WITHHOLDING EXAMPLE
Let’s say you receive 10 RSUs. One year later, the first 50% (5 RSUs) vests.
If the closing stock price on the vest date was $75, your gain (taxable income) would be $375.
5 shares x $75 = $375 gain
If your tax rate is 30%*, the taxes due would be $112.50.
$375 x 30% = $112.50 taxes due
Two shares** would be used to cover the taxes due and the remaining three shares would be deposited into your Fidelity account.
2 shares x $75 = $150 taxes paid
Since only $112.50 was due in taxes, you would get $37.50 refunded through your next paycheck and 3 shares would be deposited in your Fidelity brokerage account.
* The example shows estimated tax withholding. For your own personal situation, we encourage all partners to consult with their own tax adviser with respect to local tax consequences in regards to taxation of RSUs at the time of vest.
** Shares will be rounded up to the nearest whole share, and any residual from the netting of shares will be refunded to you through payroll.
For more information, check out Fidelity’s Stock Plan Services guide on How equity compensation and stock purchase plans are taxed.