Elliott Management has nominated a number of directors to Salesforce’s board, increasing the pressure on the software group ahead of its earnings call on Wednesday.
The activist hedge fund put forward its nominees after “constructive but intense” talks with the company, a person familiar with the matter said. It is not yet known how many people Elliott plans to nominate or who they are.
Elliott’s latest move shows how it is raising the stakes for Marc Benioff, Salesforce’s co-chief executive and co-founder, to put forward significant changes for the company. The hedge fund, which has earned a reputation as one of the most aggressive activists on Wall Street, is not focused on a settlement and sees the nominations as applying “maximum pressure”, the person said.
Salesforce is facing an onslaught of activist investors after its share price dropped more than 45 per cent from its coronavirus pandemic peak. Many of those activists have been critical of its dealmaking and spending.
Benioff’s preference for growth over higher profits has come under scrutiny, as have his takeovers of data analytics groups Tableau and Slack, the workplace chat app it bought at the height of the pandemic for $28bn.
The San Francisco-based company tried to fend off criticism by nominating three new directors to its board in late January, including Mason Morfit, the chief executive of activist ValueAct Capital, which is also an investor. Earlier in the year Benioff said the company would cut about 10 per cent of its workforce.
Salesforce’s earnings will be watched closely by Elliott and ValueAct as well as the other activists who have piled into its stock, including Third Point and Jeff Ubben’s Inclusive Capital. Investors are expecting Benioff to make significant changes to placate disgruntled shareholders and stave off a proxy fight.
CNBC first reported the nominations. Elliott and Salesforce declined to comment.