Salesforce Shareholders Reject Executive Compensation Package

Salesforce shareholders rejected the compensation plan for CEO Marc Benioff and top executives in a vote, with 404.8 million votes against compared to 339.3 million in favor. Benioff's pay increased to $39.6 million in 2024, despite lower-than-expected profit and revenue forecasts. Advisory firms Glass Lewis and ISS suggested voting against the measure.

In an unprecedented move, Salesforce shareholders rejected the compensation plan for CEO Marc Benioff and top executives in a vote held last week. With 404.8 million votes against compared to 339.3 million in favor, the outcome was a stark contrast to the company's recommendation in its proxy statement [1].

This rejection comes amidst lower-than-expected profit and revenue forecasts, as well as concerns raised by advisory firms Glass Lewis and Institutional Shareholder Services (ISS) [2]. Despite Benioff's total compensation for fiscal 2024 reaching $39.6 million, a more than 32% year-over-year increase, shareholders expressed their dissatisfaction with the proposed pay packages.

The vote was one of several issues discussed at the company's annual meeting, with shareholders also approving changes to its equity incentive plan and re-electing members of the board. The Salesforce board had recommended shareholders vote in favor of the pay packages, acknowledging the non-binding nature of the advisory vote but expressing a commitment to considering shareholder feedback [2].

Benioff's compensation for fiscal 2024 included a pair of equity awards, the second worth $20 million, which were granted in light of Salesforce's extraordinary fiscal 2024 performance [2]. However, advisory firms criticized these additional grants, citing a lack of a convincing rationale for their generosity [2].

The outcome of this controversial vote sends a clear message to Salesforce and its leadership team, emphasizing the importance of aligning executive compensation with the interests of shareholders and the company's overall performance.

[1] https://finance.yahoo.com/news/salesforce-shareholders-vote-against-pay-125735811.html?_fsig=h.4G0CMl4htcg9bY5olyLg--%7EA
[2] https://www.investopedia.com/salesforce-shareholders-vote-down-pay-plans-for-ceo-marc-benioff-other-execs-8672536

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