Activist Shareholders Threaten Salesforce Board, Could Sell Big Acquisitions like Slack and Tableau

The board is up for reelection this year.

By Steve Huff

Bloomberg | Getty Images

In recent months, activist investors Starboard Value — and, more recently, Elliott Management — have taken over significant stakes in leading customer relationship management (CRM) software provider Salesforce. The company's employees are concerned the new investors could make moves resulting in additional layoffs beyond those already announced by the company.

Business Insider reports that more than just rank-and-file employees could receive walking papers:

It's a very real possibility that these investors could oust most, if not all, of Salesforce's board of directors in one go. And if that wasn't enough, some analysts believe that these activist firms could push Benioff to at least explore the possibility of divesting mega-acquisitions like Slack, MuleSoft, and Tableau. It could even result in Salesforce ending its remote-work policies and mandating at least some employees to come back into the office, analysts speculate.

Speaking to Insider, JMP Securities analyst Pat Walravens said replacing board members might be a good move. Five members, including co-CEO Marc Benioff, have been on the board for fifteen years. According to Insider, Walravens thinks losing entrenched old board members might be a necessary injection of "fresh blood with new ideas" for Salesforce. "I think there's pretty broad agreement that the board of directors needs to be refreshed," he said.

Executives could feel the crunch, Insider reports. Salesforce could reduce real estate investments to save money, and it could also rework the way execs are paid.

The pressure from Elliott Management and Starboard Value comes when Salesforce is already facing a challenging economic environment due to the ongoing COVID-19 pandemic. Insider reports many believe the company will overcome these challenges thanks to its strong financial position and solid customer base.

Steve Huff

Entrepreneur Staff

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