Yahoo Movies Billionaire Marc Benioff Dodges a Bullet as Activist Investor Relents
Salesforce billionaire Marc Benioff dodged a bullet on Monday, as the hyper-aggressive activist investor Elliott Management announced that it would no longer try to nominate members to the company’s board, helping stave off a potentially ugly battle.
Elliott recently invested billions of dollars in the software company, suggesting that it intended to influence corporate strategy. Prior to Monday’s news, Salesforce had faced months of negative headlines; it announced plans to lay off 10 percent of its staff in January, and execs have floated the possibility of cutting even more.
Benioff nonetheless projected calm this week. In a joint statement with Elliott, he insisted that he had “thoroughly enjoyed getting to know” the firm and its managing partner Jesse Cohn, adding that he was “grateful for Jesse’s mindful and constructive ideas.”
Cohn also signaled peace, noting that he was pleased to see Salesforce’s “commitment to profitable growth, responsible capital return and an ambitious shareholder value creation plan.”
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Had the two sides not reached consensus, things may have gotten hairy for Benioff since Elliott is notorious for its combativeness. Famously, in 2012 the firm had an Argentine naval ship seized while it was in port in Ghana amid a bitter fight over unpaid debt. The ship was eventually released, and Elliott settled the feud, netting over $2 billion in the process.
Benioff may have sidestepped a similar fate because of his rapid cost-cutting and Salesforce’s improving financials. Earlier this month, his company announced that it generated $31.4 billion in revenue during the most recent fiscal year, an 18 percent annual improvement. It also increased share buybacks, which has helped the company’s stock rise more than 40 percent since January.
For years, Benioff has steadily cultivated a reputation as a prominent philanthropist. He signed the Giving Pledge, publicly lobbied for higher taxes on billionaires, and has donated hundreds of millions of dollars to combat climate change, fund California schools, and help open a new children’s hospital.
That persona has taken some hits of late, including the revelation that Salesforce paid no federal income taxes some years and over Benioff’s handling of the layoffs. In January, employees railed against the company’s lack of transparency and the billionaire’s failure to answer basic questions about Salesforce’s direction.
According to Insider, Benioff lamented the layoffs with characteristic drama, likening the cuts to death. “At the kickoff every year, you know, we, um, have a moment where we always say goodbye to everyone who's died during the year. And, um, loss is really difficult,” he reportedly said. “We need to kind of acknowledge that and give ourselves time to mourn.”
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