Salesforce CEO Marc Benioff praises activist investors after earnings-fueled rally

Marc Benioff, billionaire and co-chief executive officer of Salesforce.com Inc., during a panel session on day two of the World Economic Forum (WEF) in Davos, Switzerland, on Wednesday, Jan. 18, 2023. The annual Davos gathering of political leaders, top executives and celebrities runs from January 16 to 20. Photographer: Stefan Wermuth/Bloomberg

Salesforce Inc. Chief Executive Officer Marc Benioff praised the activist investors that have piled into the stock lately and said they should be happy with a rally fueled by Wednesday’s earnings report: “They are making a lot of money today.”

Speaking on Bloomberg Television after the stock jumped 16% in late trading, Benioff described the shareholders as “great new investors” with useful feedback. “I enjoy listening to them and getting their ideas.”

The CEO is enjoying a victory lap after weeks of these very investors pushing for changes at the software giant. At least five activist shareholders have taken stakes in Salesforce in recent months, seizing on a company that they see as bloated after a half-decade streak of steady job growth and multibillion-dollar acquisitions.

Though Salesforce is still facing a sharp deceleration in growth, its latest results and forecast showed that the company’s profitability is improving far faster than expected. A restructuring plan — including a 10% headcount reduction — has helped bolster the company’s margins, and it just approved more stock buybacks.

Benioff also disbanded Salesforce’s M&A committee — a significant step for a company that gobbled up businesses in recent years, including Tableau, Mulesoft and Slack. The move was part of a transformation over the last 90 days that emphasizes profitability, Benioff said.

Elliott Investment Management, whose multibillion-dollar stake in the company became public in January, released a statement Wednesday night saying the report “represents progress towards regaining investor trust.” The firm praised the dismantling of the M&A committee in particular.

Still, Elliott said it wasn’t totally satisfied, saying that Salesforce needed “a sustainable leadership plan and a board that demonstrates it can provide accountability through proper oversight.” Earlier Wednesday, news broke that Elliott had nominated directors to Salesforce’s board after the nomination window opened in February.

When asked about succession and leadership, Benioff said the company had a strong bench of leaders.

“We always take succession very seriously at Salesforce,” he said. “I’ve always had a strong successor in place.”