Salesforce appointed three new directors to its board on Friday as the software giant seeks to fend off criticism from activist investors and turn around a business hit by the broader tech downturn.
The San Francisco-based group has appointed Arnold Donald, a former executive of cruise ship 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 the people. familiar with the matter.
“As respected business leaders, each brings valuable experience to enhance and balance the diverse skills across the board and advance value creation initiatives,” said Marc Benioff, chairman and chief executive officer of Salesforce.
The company added that Sanford Robertson, founder of buyout group Francisco Partners, and Hasbro chairman emeritus Alan Hassenfeld — both of whom have sat on Salesforce’s board since 2003 — will step down.
Benioff is under increasing pressure to improve Salesforce’s performance, after several activist investors revealed that he had built a position in the company.
Elliott management said this week that it has built a multibillion-dollar stake in the company, joining Starboard Value, an activist fund run by Jeff Smith, which disclosed its position in October.
ValueAct also has a stake in the company, as does Inclusive Capital, a firm founded by Jeff Ubben, the former head of ValueAct, according to people briefed on the matter.
Salesforce has been a target of activists for its lackluster performance over the past year, where several software technology companies have suffered setbacks after a pandemic-fueled boom boosted profits and valuations. Salesforce’s market value has fallen nearly 50 percent since its 2021 peak to around $165bn.
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Activist investors want Salesforce to cut costs, increase profit margins and evaluate the sale of certain assets it has acquired in recent years.
Salesforce is acquiring workplace productivity tool Slack for $27.7bn in 2020, representing a 55 per cent premium to its share price at the time. The company wants to compete with Microsoft’s Teams, but has struggled to integrate its apps into the platform. Stewart Butterfield, Slack’s chief executive at the time of the acquisition, and Bret Taylor, who served as head of Salesforce as the architect of the deal, have left their roles.
Benioff has taken several steps to get the company back on track, including cutting about 10 percent of its workforce.
The decision to cut jobs follows the workforce in the technology sector during the pandemic as demand for digital services increases.
Activist investors have been friendly in public communications about Salesforce but behind their backs they are pushing for significant changes, people briefed on the matter said.