Syed Imran Haider 
Salesforce had come up with a compensation plan for its top executives, but the company’s investors voted against it.
This was after the equity awards given to chief executive Marc Benioff had prompted concerns amongst shareholder advisory groups.
The vote
On Monday, a regulatory filing showed that there were 339.3 million votes that favored granting approval to the resolution for the compensation plan for the executives. Meanwhile, 404.8 million votes had been against it.
The voting had occurred last week on Thursday at the annual meeting of the company. The board had urged the shareholders to give their approval for the compensation plan.
However, Institutional Shareholder Services and Glass Lewis were the two shareholder advisory companies that recommended that investors vote against the resolution.
The total pay given to Benioff for the 2024 fiscal year was $39.6 million, while his pay a year earlier had stood at $29.9 million.
His flat salary had been around $1.55 million, the CEO had been given additional option and stock awards as well as non-equity incentive plan compensation.
Security fees had also been included in the latest figure, which had not been invoiced to the firm previously.
The recommendation
Benioff had received another long-term equity compensation in January from the compensation committee of the board, which was about $20 million.
The executive had received this compensation for the strong financial performance of the company and its successful transformation, along with other factors.
In its recommendation, Glass Lewis stated that the substantial equity grants should make shareholders wary.
It further said that there was not a proper rationale behind the equity grants that had been given to Benioff in January.
The CEO was already one of the largest shareholders of the firm. His total stake was about 2%, which carried a value of $6 billion.
Glass Lewis said that the CEO’s interest was already in line with that of the shareholders. It also said that there was no need for additional restricted stock options and stock units based on performance.
The annual meeting vote is not binding.
The company
In the proxy statement of the company, the board said that the Compensation Committee considered the opinion of the stockholders very valuable.
The said committee is responsible for developing and executing the compensation program.
The board said that it would take the outcome of the vote into account for making executive compensation decisions in the future.
The 2024 fiscal year of Salesforce ended on January 31st, which saw its share record a rise of 67%. This is the strongest performance the company has seen since 2011.
The fiscal year also saw the net income rise from $208 million last year to $4.1 billion. Meanwhile, the revenue rose 11% from $31.4 billion to $34.9 billion.
Last year in January, the company had announced plans of laying off 10% of its workforce. This was after activist investors purchased stakes and demanded a better combination of growth and profit.
In February, Salesforce announced that it would start paying dividend to shareholders.
