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Salesforce investors have voted down the company’s proposed compensation plan for top executives, following concerns raised by shareholder advisory groups over equity awards granted to CEO Marc Benioff.
A regulatory filing on Monday revealed that the resolution received 339.3 million votes in favor and 404.8 million against during the annual meeting held on Thursday.
Despite the board’s recommendation to approve the compensation plan, advisory firms Glass Lewis and Institutional Shareholder Services had advised investors to reject it.
For the 2024 fiscal year, Benioff’s total pay increased to $39.6 million from $29.9 million the previous year. While his salary remained at $1.55 million, he received additional stock and option awards, along with nonequity incentive plan compensation, according to the proxy statement. The recent total also included previously unbilled security fees.
In January, the board’s compensation committee awarded Benioff a second long-term equity award worth $20 million, citing the company’s “successful transformation actions and strong financial performance in the fiscal year,” among other factors.
Glass Lewis, in its recommendation, expressed concerns about the “substantial discretionary equity grants” issued to Benioff in January, noting a “lack of a fully convincing rationale” for the awards.
Already holding over 2% of Salesforce shares valued at nearly $6 billion, Benioff’s additional performance-based restricted stock units and stock options were deemed “unwarranted” by Glass Lewis, as his interests were seen to be already aligned with those of shareholders.
The vote at the annual meeting is nonbinding.
Salesforce’s board acknowledged the shareholders’ opinions, stating in the company’s proxy statement, “Our Compensation Committee, which is responsible for designing and administering our executive compensation program, values the opinions expressed by our stockholders and will consider the outcome of this vote when making future executive compensation decisions.”
Salesforce declined to comment.
In the 2024 fiscal year, Salesforce shares surged 67%, marking the strongest performance since 2011. Net income soared to $4.1 billion from $208 million a year earlier, while revenue grew 11% to $34.9 billion from $31.4 billion. In January 2023, Salesforce announced plans to lay off 10% of its employees following pressure from activist investors for a better balance of profit and growth. Salesforce also announced in February that it would begin paying a dividend to shareholders.
Salesforce shares have declined 2.6% year to date.