Activist Investors Cut Salesforce Some Slack
Wade Tyler Millward
‘We look forward to continuing our productive relationship with Marc and the Salesforce team,’ Jesse Cohn, Elliott managing partner, said in a statement.
Activist investors appear to have relaxed their grip on enterprise applications vendor Salesforce, with one of the investors promising not to nominate new directors for the company.
San Francisco-based Salesforce and New York-based Elliott Investment Management issued a joint statement Monday with Elliott saying it “decided not to proceed with director nominations,” with both organizations “committed to continue the productive working relationship they have developed together.”
Elliott announced the decision due to Salesforce’s multi-year profitable growth framework – a framework called “New Day” – strong fiscal year 2023 results, initiatives for the 2024 fiscal year and the Salesforce board “and management actions and clear focus on value creation,” according to the statement.
Salesforce, Elliott Reach Truce
CRN has reached out to Salesforce and the activist investor groups for comment.
Jesse Cohn, Elliott managing partner, said in the statement that he has “great respect” for Salesforce CEO and co-founder Marc Benioff and his team.
“I have become deeply impressed by their strong ongoing commitment to profitable growth, responsible capital return and an ambitious shareholder value creation plan,” Cohn said. “We look forward to continuing our productive relationship with Marc and the Salesforce team as they accelerate the Company’s transformation.”
Benioff said in the statement that he has “thoroughly enjoyed getting to know Jesse and the Elliott team over the last few months, and I am grateful for Jesse’s mindful and constructive ideas.”
He continued: “I look forward to continuing my relationship with Jesse and the Elliott team.”
Earlier this year, Salesforce named three new board of directors members alongside the departure of two longtime members.
Elliott was among a group of activist investors to take share in Salesforce, including Third Point, led by CEO and founder Dan Loeb; Starboard Value; ValueAct Capital Partners and Jeff Ubben’s Inclusive Capital.
Third Point currently has a stake in chipmaker Advanced Micro Devices (AMD).
Elliott Management recently made headlines for its role in Citrix going private and merging with data applications vendor Tibco.
Salesforce’s better-than-expected earnings report for the fourth quarter of its fiscal year – a quarter that ended Jan. 31 – likely helped its position with the investors.
Although Cohn tweeted a statement after the quarterly earnings report praising some of Salesforce’s efforts and progress, he noted that “much work remains.”
“Salesforce needs a sustainable leadership plan and a board that demonstrates it can provide accountability through proper oversight,” according to the Elliott statement.