Salesforce is now facing the very real threat of activist shareholders overthrowing its board and forcing the sale of mega-acquisitions like Slack and Tableau
The cloud software giant is now being targeted by activist firm Elliott Management, which has taken a big stake in the company. That makes Elliott the second such firm to take aim at Salesforce, after Starboard Value disclosed its stake in the company in October as it pushed for cost-cutting at the company. beyond those already announced, as these activists push CEO Marc Benioff to show greater profit margins, Insider reported this week.
Salesforce, unlike many other tech companies, only appoints its board members to serve for one-year terms, meaning they have to be reelected by shareholders every single year. JMP Securities analyst Pat Walravens tells Insider that Elliott and Starboard could take advantage of the situation by mustering the support to replace many or most of those board seats with their own candidates at this year's meeting later this year.
, especially since that deal came so soon after the sizable acquisitions of companies like data analysis firm Tableau and data integration company MuleSoft. However, Salesforce likely wouldn't get the full amount it paid for Slack if it sold it under current market conditions, RBC notes. However, it thinks that some acquisitions like MuleSoft, ClickSoftware, or Heroku would turn a profit if they were to be sold off, while minimizing disruptions to the business.Elliott and Starboard could also push for relatively smaller, but no less meaningful changes, too.
Another change that Walravens thinks could be in the cards is a revamping of compensation, particularly for executives.
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