Salesforce Investors Reject Executive Compensation Plan Amid Concerns

In a significant move, Salesforce investors voted against the company's executive compensation plan, particularly scrutinizing the equity awards granted to CEO Marc Benioff. At the annual meeting held last Thursday, the resolution to approve the compensation garnered 339.3 million votes in favor but faced a substantial 404.8 million votes against. This decision followed recommendations from shareholder advisory firms Glass Lewis and Institutional Shareholder Services, which urged investors to reject the measure. For the 2024 fiscal year, Benioff's total compensation rose to $39.6 million, a notable increase from $29.9 million the previous year. While his base salary remained unchanged at $1.55 million, the increase was attributed to additional stock and option awards, as well as nonequity incentive plan compensation. Notably, the compensation package included previously unbilled security fees. Earlier in January, the board's compensation committee awarded Benioff a long-term equity award valued at $20 million, citing the company's strong financial performance. Glass Lewis criticized the additional performance-based stock units and options as "unwarranted," arguing that Benioff's existing stake in Salesforce, valued at nearly $6 billion, already aligned his interests with those of shareholders. Despite the controversy, Salesforce shares experienced a remarkable 67% increase in the 2024 fiscal year, with net income soaring to $4.1 billion from just $208 million the previous year. In response to pressure from activist investors, Salesforce announced plans to lay off 10% of its workforce in January 2023 and revealed intentions to initiate dividend payments to shareholders in February. However, the company's shares have seen a decline of 2.6% year to date.