Starbucks CEO gives himself $1.3 million: So that's why coffee costs so much

Back in August, Starbucks warned that it would raise its prices on a nationwide basis in a "slow and deliberate" fashion. Most of these price increases were in the 10-to-15 cent range. Here is the rub, this news was piggybacked on news that the coffee king was going to lower some of its prices -- on smaller-sized drinks. So your small (or whatever baristas call it) black coffee costs 15 cents less, but the guy buying the large behind you is making that up and more by buying some candy-flavored concoction. Yes, I understand business and I know why Starbucks does this, but it has many coffee drinkers upset and the latest Schultzie stunt may push them over the top.

Want to know where the extra 15 cents on your drink is going? How about right into Schultzie's pocket. Back in January, Schultzie was lauded by analysts (including me, I believe) when he cut his base pay to the minimum required to maintain his benefits in the face of slumping first-quarter sales and the economic crunch. Well, that $10,000 must have made it hard to make ends meet, as Schultzie has decided to reward three solid quarters with a raise to $1.3 million.

My question is, will he lower his salary again once lower sales crop back up and hit the firm's bottom line? Let's see if he is as quick to lower his salary (again) if need be. Now, I understand business practices, but I am not sure that a major pay raise at this time is the best move.

Nevertheless, should Starbucks continue to turn in solid quarterly performances then Schultzie's move was good.