Salesforce appointed three new directors to its board on Friday as the software giant seeks to fend off criticism from activist investors and turn round a business being hit hard by the broader tech downturn.
The San Francisco-based group has appointed Arnold Donald, former chief executive of cruise operator Carnival Corporation, Sachin Mehra, chief financial officer of Mastercard and Mason Morfit, chief executive of ValueAct Capital, an activist fund that is also an investor, according to people familiar with the matter.
“As highly respected business leaders, they each bring valuable experience to further enhance and balance the diverse skills on the board and advance our value creation initiatives,” said Marc Benioff, chair and co-chief executive of Salesforce.
The company added that Sanford Robertson, co-founder of buyout group Francisco Partners, and Hasbro chair emeritus Alan Hassenfeld — who have both sat on Salesforce’s board since 2003 — will step down.
Benioff has come under mounting pressure to improve Salesforce’s performance, after several activist investors disclosed they had built positions in the company.
Elliott Management said this week it had built a multibillion-dollar stake in the company, joining Starboard Value, the activist fund run by Jeff Smith, which disclosed a position in October.
ValueAct also has a stake in the company, as does Inclusive Capital, the firm set up by Jeff Ubben, the former head of ValueAct, according to people briefed on the matter.
Salesforce has become a target for activists because of its dismal performance over the past year, in which several software technology companies faced setbacks following a pandemic-driven boom that bolstered profits and valuations. Salesforce’s market value has dropped almost 50 per cent since its 2021 peak to about $165bn.
The activist investors want Salesforce to cut costs, boost profit margins and evaluate the sale of certain assets that were acquired in recent years.
Salesforce acquired workplace productivity tool Slack for $27.7bn in 2020, representing a 55 per cent premium to its share price at the time. The company wanted to compete with Microsoft’s Teams, but has struggled to integrate the app into its platform. Stewart Butterfield, Slack’s chief executive at the time of the acquisition, and Bret Taylor, who as co-chief of Salesforce was the architect of the deal, have since left their roles.
Benioff has already taken some measures to get the company back on track, including cutting about 10 per cent of its workforce.
The decision to slash jobs followed a hiring spree across the tech sector during the height of the pandemic when demand for digital services surged.
The activist investors had been friendly in their public communication about Salesforce but behind the scenes they were pushing for significant changes, said people briefed about the matter.