Stock Split, Protests Highlight Starbucks Shareholder Meeting

While Starbucks Corp. held its annual shareholder meeting Tuesday and celebrated the runaway success of its espresso empire, activists protested its use of genetically engineered ingredients.

Starbucks Chairman Howard Schultz announced a 2-for-1 stock split, the fourth in Starbucks’ nine years as a public company, to about 2,000 shareholders.

“The growth of our company is in front of us. We sincerely believe that what we are capable of doing is so much more than what we’ve already done,” Schultz said.

The meeting was infused with the usual mix of class and humor, as shareholders were treated to a live jazz trio, an appearance by basketball legend Magic Johnson and a video that featured Schultz and other top executives dressed up like the heavy metal band Kiss.

But outside the meeting, about two dozen protesters holding signs saying “Frankenbucks,” demanded a halt to use of milk produced with bovine growth hormones and of genetically modified soy derivatives and corn sweeteners. Chief Executive Orin Smith said Starbucks would offer hormone-free milk in its U.S. stores by fall. He also said it was examining its entire product line for genetically modified ingredients.

At last year’s meeting, activists called on Starbucks to offer “fair trade” coffee, for which farmers are guaranteed a minimum price. Last October, the company started selling fair trade beans in its stores.

This year, protesters insisted that Starbucks sell fair trade coffee as one of its daily showcase brews.

Smith defended the company’s coffee buying practices, saying it would offer brewed fair trade coffee when enough high-quality beans were produced to guarantee supply.

“Starbucks has done more for farmers in these nations than any other coffee company in the world, and that is categorically true,” Smith said.

Starbucks also offered a glimpse of how it is wiring its stores for Internet access under a deal with Microsoft Corp.

Along with turning many of its stores into Internet cafes, Starbucks will also let people order their drinks through hand-held devices such as Microsoft Windows CE-based Pocket PCs.

Starbucks plans to sell prepaid cards that can be used to quickly purchase that morning cup.

Starbucks shares closed off $1.06 at $43.25 on Nasdaq amid a broad decline in stocks.