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Salesforce facing rare 5 activist investors after stock lost 48% in 2022

Feb 13, 2023

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Salesforce and its co-founder and CEO Marc Benioff are facing pressure from five activist investors. The latest activist investor, Third Point’s Dan Loeb, recently called off his proxy fight with Disney.

Starboard Value, ValueAct Capital, Inclusive Capital and Elliott Management round out the five. Elliott Management is believed to be the most active, with a multi-billion dollar investment.

The outside challenges come at a tumultuous time for the company worth $170 billion. Last month, Salesforce announced layoffs for 10% of its workers, saying it hired too many during the COVID-19 pandemic. Both co-CEO Bret Taylor and Slack CEO Stewart Butterfield left the company in January. It is the second time in less than three years Benioff has lost a co-CEO, leaving him alone at the helm. And the stock plunged 48% in 2022.

The share price has rebounded some in 2023, up 25% as of Monday, rising on activist news and the overall boost to tech stocks. But five activist investors can be a complicated recipe if they’re each looking at different ways to shake up the company.

Board seats are always a big ploy. Sunday marked the start of the month-long nominating window for investors to put forward their preferred names. Salesforce has already placated one of the activist investors, ValueAct, by appointing its CEO and Chief Investment Officer Mason Morfit to the board. He is one of three new directors that was announced at the end of January at the same time the company revealed two existing members were retiring. Morfit, along with Mastercard Chief Financial Officer Sachin Mehra and former Carnival CEO Arnold Donald, will be active March 1.

But Elliott Management is also expected to nominate multiple people to replace other longtime board members who work closely with Benioff. Elliott Management and other investors have so far kept their demands out of the public, working behind the scenes with Benioff to negotiate changes to maximize Salesforce’s value.

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SALESFORCE AND CEO MARC BENIOFF ARE UNDER SOME SERIOUS PRESSURE.

THE COMPANY IS FACING, NOT ONE, NOT TWO OR THREE OF FOUR, BUT FIVE ACTIVIST INVESTORS.

THE LATEST BEING DAN LOEB, WHO RECENTLY BACKED OFF HIS PROXY FIGHT WITH DISNEY.

THE UNUSUAL ONSLAUGHT COMES AT A TUMULTUOUS TIME FOR THE 170-BILLION-DOLLAR COMPANY.

SALESFORCE ANNOUNCED LAYOFFS FOR 10% OF ITS WORKERS SAYING THEY HIRED TOO MANY DURING THE PANDEMIC.

CO-CEO BRET TAYLOR JUST LEFT THE COMPANY, LEAVING BENIOFF AS SOLE CEO.

IT’S THE SECOND TIME IN LESS THAN THREE YEARS BENIOFF HAS LOST A CO-CEO.

SLACK CEO STEWART BUTTERFIELD ALSO WALKED OUT THE DOOR.

AND IN 2022 THE STOCK PLUNGED 48%.

NOW IT’S BEEN RISING THIS YEAR ON THE ACTIVIST NEWS AND OVERALL BOOST TO TECH SHARES.

BUT FIVE ACTIVIST INVESTORS CAN BE A COMPLICATED RECIPE IF THEY’RE ALL LOOKING AT DIFFERENT WAYS TO SHAKE UP THE COMPANY.

BOARD SEATS ARE ALWAYS A BIG PLOY, AND SUNDAY MARKED THE START OF THE NOMINATING WINDOW FOR INVESTORS TO PUT FORWARD THEIR PREFERRED NAMES.

SALESFORCE HAS ALREADY PLACATED ONE OF THE ACTIVIST INVESTORS, VALUEACT, BY APPOINTING ITS CEO MASON MORFIT TO THE BOARD TO REPLACE RETIRING MEMBERS.

BUT THE MOST ACTIVE INVESTOR OF THE BATCH, ELLIOTT MANAGEMENT, IS EXPECTED TO LAUNCH A MAJOR CHALLENGE…NOMINATING MULTIPLE PEOPLE TO REPLACE LONGTIME BOARD MEMBERS WHO ARE CLOSE TO BENIOFF.

THE INVESTORS HAVE SO FAR KEPT THEIR DEMANDS OUT OF THE PUBLIC, WORKING BEHIND THE SCENES WITH BENIOFF TO NEGOTIATE CHANGES TO HOW HE RUNS HIS COMPANY.

I’M SIMONE DEL ROSARIO IN NEW YORK IT’S JUST BUSINESS.


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