Salesforce shareholders rejected the company’s compensation plan for top executives, particularly CEO Marc Benioff, following concerns raised by shareholder advisory groups about equity awards.
According to a regulatory filing on Monday, the resolution to approve the compensation plan received 339.3 million votes in favor and 404.8 million against at the annual meeting held on Thursday.
The board had recommended shareholders to support the resolution. However, both Glass Lewis and Institutional Shareholder Services advised investors to vote against it, citing concerns over substantial discretionary equity grants given to Benioff in January.
For the fiscal year 2024, Benioff received $39.6 million in total pay, up from $29.9 million the previous year. His salary remained unchanged at $1.55 million, but he received additional stock and option awards, as well as nonequity incentive plan compensation, according to the proxy statement. The total also included security fees invoiced to the company for the first time.
In January, the compensation committee awarded Benioff a second long-term equity grant worth $20 million, recognizing Salesforce’s successful transformation efforts and strong financial performance.
Glass Lewis expressed concern that these grants were unwarranted given Benioff’s significant existing stake in Salesforce, valued at close to $6 billion, representing over 2% of the company.
The shareholder vote is advisory and nonbinding. Salesforce’s board stated in the proxy statement that it values shareholder opinions and will consider the outcome when making future executive compensation decisions.
Salesforce declined to comment on the vote results.
During the 2024 fiscal year, Salesforce shares rose by 67%, marking its strongest performance since 2011. The company reported a significant increase in net income to $4.1 billion from $208 million the previous year, with revenue growing 11% to $34.9 billion.
In response to activist investor pressure in January 2023, Salesforce announced a 10% employee layoff and later initiated dividend payments to shareholders in February.
