Friday, July 19, 2024

Shareholders of a US software company reject proposed pay plan for CEOs and top executives

Salesforce Shareholders Reject Compensation Plan for CEO Marc Benioff and Top Executives

Salesforce shareholders have made a bold statement by rejecting the compensation plan for CEO Marc Benioff and other top executives of the cloud-based software company. In a surprising turn of events, the resolution to approve the compensation received 339.3 million votes in favour versus a staggering 404.8 million against, as per a security filing seen by CNBC.

The decision comes after shareholder advisory groups, including Glass Lewis and Institutional Shareholder Services, raised concerns about the equity awards granted to CEO Marc Benioff. These firms advised investors to vote against the pay plan, citing issues with Benioff’s increased pay package from $29.9 million in 2023 to $39.6 million in 2024.

The criticism stems from a $20 million long-term equity award granted by the board’s compensation committee in January, which was deemed excessive given Benioff’s already substantial stake in the company, valued at nearly $6 billion. Glass Lewis also questioned the need for additional performance-based stock units and options.

Earlier reports stated that Salesforce had laid off 700 employees, approximately 1% of its workforce, in a bid to streamline operations. This move follows a larger downsizing in 2023 that saw the company shutter offices and eliminate 10% of its staff. Despite the cuts, Salesforce announced plans to hire over 3,000 new employees later that year, suggesting a strategic workforce adjustment rather than a simple layoff.

The rejection of the compensation plan reflects growing concerns among Salesforce shareholders about executive pay and company decisions. It remains to be seen how the company will address these issues going forward and whether it will impact its performance and growth in the future.

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