Here's Why Starbucks Calls Its Employees 'Partners'

Anyone scrolling through the Starbucks website eventually starts to recognize company lingo that refers to employees as "partners" rather than workers or other common catchall terms. It's easy to dismiss that as just a trendy way to make employees feel important, but in the case of Starbucks, the moniker actually has more meaning. The term "partners" comes from the fact that employees actually own Starbucks stock, awarded at no cost to them.

The program does come with the catchy phrase of Bean Stock, a nod to coffee beans comprising the core of the entire operation. But the actual monetary stocks are real. They became part of the Starbucks employee ethos in 1991, on the day the company opened its 100th store. Company founder Howard Schultz announced the ongoing practice of awarding stocks to all employees, whether full- or part-time, and regardless of hierarchy in the chain of operations (up to but not including Director level). Schultz noted that every single person would have a stake in the success of Starbucks — thus, the designation of "partners."

Bean stocks, in the form of Restricted Stock Units (RSUs), are automatically assessed and "granted" annually to eligible employees. To reach that eligibility, employee partners must have started working at a Starbucks-operated store by May 1st of the fiscal year prior to the annual November grant. With continual employment over the course of two years, the RSU's convert to shares of Starbucks stock at the rate of 50% after one year and 100% at two years.

There doesn't seem to be a catch regarding the Bean Stock program. However, stock-owning partners do have tax liabilities, as they would when owning any type of stock. To cushion the blow, Starbucks "nets" a portion of the shares. This basically means the company offsets the taxes that partners owe by lowering their shares by an equivalent amount. All remaining partner shares go into a personal Fidelity account. Employees own the shares and can hold or sell them. These shareholders also have voting rights and qualify for dividend payments.

Some current or former employees have varying opinions on how valuable the partnership/stock program actually is. The topic has cropped up on Reddit with complaints like low overall pay for certain employee levels, the headache of filing K-1 forms, and a perceived lack of Board representation for non-management employees. On the flip side, satisfied employees correct misconceptions and remind fellow partners of benefits not typically provided to retail-level employees in other companies. Those include health care, tuition, and Starbucks financial wellness programs.

Separate from the free Bean Stock awards, Starbucks partner employees can also purchase company stock shares at a 5% discount. That happens on a quarterly basis through the Starbucks Stock Investment Plan (S.I.P.), available after 90 days of company employment. If you're interested in working at Starbucks, check out these articles on everything to know before applying for a job at Starbucks and 14 rules Starbucks employees must follow.