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Salesforce investors reject compensation for Benioff and senior management

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Shareholders of Salesforce Deny Remuneration for Benioff and Senior Leadership

Investors of Salesforce have rejected the company’s proposed compensation package for its top management, following concerns raised by shareholder advisory firms regarding the equity awards given to CEO Marc Benioff.

At the annual meeting last Thursday, the resolution to approve the compensation plan received 339.3 million votes in favor and 404.8 million against, as per a regulatory filing on Monday.

Although the board advocated for shareholders to support the resolution, both Glass Lewis and Institutional Shareholder Services advised against it.

In the fiscal year 2024, Benioff’s total pay amounted to $39.6 million, an increase from $29.9 million in the previous year. While his salary remained unchanged at $1.55 million, he was granted additional stock and option awards, along with non-equity incentive plan compensation, as stated in the proxy statement. The total also encompassed security fees that were previously unaccounted for.

In recognition of the company’s accomplishments, Benioff was given a $20 million long-term equity award by the compensation committee in January, citing successful transformations and robust financial performance.

Glass Lewis expressed concerns in its evaluation, questioning the rationale behind the sizable discretionary equity grants issued to Benioff earlier in the year, deeming them potentially unwarranted given his substantial existing stake in Salesforce.

Despite being one of the significant shareholders of Salesforce with a stake exceeding 2%, valued at approximately $6 billion, Benioff’s additional performance-based restricted stock units and stock options were deemed unnecessary.

Notwithstanding the outcome of the vote, which is nonbinding, Salesforce’s board reassured that they value the feedback from shareholders and will consider it in future executive compensation decisions.

The company opted not to provide any comments on the matter.

Over the fiscal year ending on January 31, 2024, Salesforce witnessed a 67% surge in its share value, marking its most robust performance since 2011.

Profits surged from $208 million in the prior year to $4.1 billion, as revenue climbed 11% to $34.9 billion from $31.4 billion. Following activist investor pressure for enhanced profitability, Salesforce announced employee layoffs in 2023 and later declared plans to introduce shareholder dividends.

Year-to-date, Salesforce shares have dipped by 2.6%.

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