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Salesforce Appoints New Directors Amidst Pressure From Activist Investors

Salesforce Inc. is appointing three new independent directors to its board in an effort to appease activist investors.

January 27, 2023
2 minutes
minute read

Salesforce Inc. is appointing three new independent directors to its board in an effort to appease activist investors.

Mason Morfit, CEO and CIO of activist investor ValueAct Capital, will join Salesforce's board, the company confirmed. Morfit said he has enjoyed working with Salesforce CEO Marc Benioff and looks forward to helping the company deliver profitable growth and shareholder returns.

The enterprise software company is also bringing in Arnold Donald, the former CEO of Carnival Corp., and Mastercard Inc. Chief Financial Officer Sachin Mehra. With their experience in leading large organizations, Donald and Mehra will be valuable additions to the company's board of directors.

The appointments of new independent directors to the Salesforce Board of Directors demonstrates the company's commitment to ongoing refreshment and dialogue with its investors, Lead Independent Board Director Robin Washington said in a statement.Washington added that the Board has benefited from the valuable input of investors over the past year and looks forward to continuing that dialogue in order to create value for Salesforce shareholders.

Salesforce shares were mostly unchanged at $165.65 when the market opened in New York. They are having their best week since November, after Elliott's stake became public on Sunday night. The stock has recovered from a sharp decline in the weeks after co-Chief Executive Officer Bret Taylor announced he would be leaving the company.

Benioff said that the company would benefit from the new directors' expertise as it drives "durable top- and bottom-line growth."

As a result of the appointments, board members Alan Hassenfeld and Sanford Robertson will not stand for reelection at Salesforce’s 2023 annual general meeting. Each director had been on the board for 19 years. Bloomberg News reported earlier this week that Salesforce was considering the changes, and had been working on refreshing its board for several months.

Salesforce, based in San Francisco, has been under pressure to increase profits and shareholder returns after a period of rapid hiring and large acquisitions, including the purchase of business communications app Slack in 2021 for $27.7 billion.

Activists Elliott Investment Management, Starboard Value, ValueAct, and Jeff Ubben’s Inclusive Capital have all taken stakes in Salesforce. It’s unclear what the addition of ValueAct’s Morfit means for the other activists in the stock. Salesforce has been engaging with Elliott since it was contacted on Sunday, according to people familiar with the matter.

Elliott Management Corporation, which has a multibillion-dollar stake in the company, is preparing to nominate a slate of directors in the open nomination window starting Feb. 12, according to a person familiar with the matter. The firm has held conversations with technology executives and those from other industries as it looks to fill the board.

Wall Street analysts say that in addition to board changes, the company is expected to come under pressure to cut more jobs or spin off big acquisitions in search of greater profit. Salesforce this month said it would cut 10% of its workforce, about 8,000 jobs.

Bryan Curtis
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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