Starbucks' investor group urges shareholders to replace directors over labor row

Feb 18 (Reuters) - Starbucks faced fresh pressure on Wednesday from a coalition of investors including public-sector pension funds that urged shareholders ‌to vote against the reelection of two directors, citing persistent failure ‌to manage labor relations.

The move against Starbucks' lead independent director, Jorgen Vig Knudstorp, and Beth ​Ford, chair of the board's Nominating and Corporate Governance Committee, comes as the company is locked in a prolonged effort to reach a collective agreement with its unionized baristas.

More than 3,800 baristas had joined a nationwide strike late last ‌year - marking the longest ⁠work stoppage in its history - as the Starbucks Workers United union pressed for better staffing, more predictable schedules and higher ⁠pay after drawn-out contract talks.

The dispute has become a high-profile test for CEO Brian Niccol as he works to revive sales.

"We are concerned that, without a ​constructive ​relationship between Starbucks and its unionized workforce, ​sustaining the turnaround may prove ‌difficult," the investors said in a letter ahead of the March 25 annual meeting.

New York State Comptroller Thomas DiNapoli, New York City Comptroller Mark Levine, Trillium ESG Global Equity Mutual Fund, SOC Investment Group, Merseyside Pension Fund and the Shareholder Association for Research and Education are all signatories.

"We offer the ‌best job in retail with hourly partners earning ​an average of $30 an hour and world-class ​benefits... all for those who ​only work 20 hours a week on average," Starbucks ‌said in a statement.

The investor group had, ​in January, written ​to the two directors raising concerns over the board's elimination of its Environmental, Partner, and Community Impact Committee without explanation.

The committee's responsibilities were reallocated ​across existing committees ‌and the full board reclaimed primary responsibility for labor oversight, Starbucks ​told Reuters on Wednesday.

(Reporting by Neil J Kanatt and Juveria Tabassum ​in Bengaluru; Editing by Pooja Desai)