The majority of Salesforce’s (NYSE:CRM) shareholders voted against the compensation plan for CEO Marc Benioff and other top executives. The decision came after two shareholder advisory firms, Glass Lewis and Institutional Shareholder Services, raised concerns over the large equity awards granted to executives.
The voting took place at Salesforce’s annual general meeting (AGM) on June 27. The proposal to approve the full Fiscal 2024 compensation packages for key executives was rejected, with 404.8 million votes against compared to 339.3 million in favor.
According to the SEC filing, Benioff received a total salary of $39.6 million in Fiscal 2024, up from $29.9 million in the prior year. The CEO’s base pay remained unchanged at $1.55 million. Furthermore, he received additional stock, option awards, and nonequity incentive plan compensation.
Large Equity Awards
The compensation committee awarded Benioff $15 million in equity in the first quarter and an additional $20 million near the end of 2024, citing the company’s positive performance.
However, Glass Lewis, a global governance solutions provider, questioned the rationale behind these grants. The firm further argued that additional performance-based stock options were unnecessary, as Benioff’s interests were already aligned with shareholders.
Shareholders’ Non-Binding Vote
It should be mentioned that the shareholders’ vote is non-binding, but it gives CRM insight into investors’ views on executive compensation.
It will be interesting to see how Salesforce responds to this vote. The company may address shareholders’ concerns, adjust the plan, or maintain and justify the current structure to investors.
Is CRM a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating based on 29 Buys, 10 Holds, and one Sell assigned in the past three months. The analysts’ average price target on CRM stock of $297.11 implies 15.96% upside potential.
