Salesforce appoints new administrators in response to criticism from activists

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Salesforce named three new directors to its board on Friday as the software giant seeks to fend off criticism from activist investors and turn around a company hard hit by the broader tech downturn.

The San Francisco-based group named Arnold Donald, former chief executive of cruise line Carnival Corporation, Sachin Mehra, chief financial officer of Mastercard and Mason Morfit, chief executive of ValueAct Capital, an activist fund that is also an investor, according to people familiar with the matter. .

As highly respected business leaders, they each bring valuable experience to further enhance and balance the diverse skill sets of the Board of Directors and advance our value creation initiatives, said Marc Benioff, Chairman and Co-Chief Executive Officer. from Salesforce.

The company added that Sanford Robertson, co-founder of buyout group Francisco Partners, and Hasbro Chairman Emeritus Alan Hassenfeld, who have both served on the Salesforces board since 2003, will step down.

Benioff has come under increasing pressure to improve Salesforces performance, after several activist investors revealed they had been building positions in the company.

Elliott Management said this week it had built a multibillion-dollar stake in the company, joining Starboard Value, the activist fund run by Jeff Smith, which disclosed a position in October.

ValueAct also owns a stake in the company, as does Inclusive Capital, the company founded by former ValueAct boss Jeff Ubben, according to people briefed on the matter.

Salesforce has become a target for activists due to its dismal performance over the past year, in which several software technology companies suffered setbacks following a pandemic-driven boom that boosted profits and valuations. The market value of Salesforces has fallen nearly 50% since its 2021 peak to around $165 billion.

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Activist investors want Salesforce to reduce costs, increase profit margins and evaluate the sale of certain assets acquired in recent years.

Salesforce acquired workplace productivity tool Slack for $27.7 billion in 2020, representing a 55% premium to its stock price at the time. The company wanted to compete with Microsoft Teams, but struggled to integrate the app into its platform. Stewart Butterfield, managing director of Slacks at the time of the acquisition, and Bret Taylor, who as co-head of Salesforce was the architect of the deal, have since stepped down.

Benioff has already taken some steps to get the company back on track, including cutting about 10% of its workforce.

The decision to cut jobs follows a surge in tech hiring at the height of the pandemic, when demand for digital services surged.

Activist investors had been friendly in their public communication about Salesforce, but behind the scenes they were pushing for significant changes, people briefed on the matter said.

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