Mastercard CFO Mehra named among new Salesforce board directors

28 Jan
2023

Mastercard CFO Mehra named among new Salesforce board directors

By Staff Writer

Salesforce Inc on Friday named three new board directors, including the chief of hedge fund ValueAct Capital, amid pressure from activist investors for better cost control and a management shakeup at the cloud-based software firm.

The men will join on March 1 when two directors, who have each served two decades, will be leaving.

The moves have been long-planned as lead independent director Robin Washington has been steering the process to focus more on operational skills since last summer, a person familiar with the matter said on Friday.

However, the appointments also come as the company has been facing pressure publicly and privately from four prominent activist investment firms. Elliott Management, the biggest among them, is set to launch a board challenge next month.

Elliott, which invests over $55 billion, has been engaging with Salesforce for roughly a week and is currently interviewing candidates that it plans to nominate as directors, people familiar with the matter said on Friday.

Additionally Starboard Value, run by Jeffrey Smith, Inclusive Capital, run by Jeffrey Ubben, and ValueAct, which was founded by Ubben, have owned shares in Salesforce for months and have held talks with the company, sources said.

Many activist investors push target companies to add a shareholder to the board to represent investors' views.

By picking ValueAct's Morfit, Salesforce likely made a calculated bet that the San Francisco-based investment firm, which has a reputation for working collaboratively behind the scenes, might be more agreeable on the board than other activists, bankers and lawyers said.

Morfit has served as a director at Microsoft and Valeant Pharmaceuticals.

ValueAct has deep experience in aiding software companies with transformations, having served on the board of Microsoft and Adobe, which have ballooned in size since ValueAct's involvement.

At the same time Elliott has also made significant investments in technology companies and has won board seats at companies including Pinterest, Twitter and eBay.

salesforce's stock price, which has climbed up 22.5% this year, rose modestly at the start of trading on Friday.

Earlier this year, the company announced plans to cut 10% of its jobs and close some offices after rapid pandemic hiring left it with a bloated workforce.

Salesforce directors Sanford Robertson and Alan Hassenfeld, board members since 2003, will not stand for re-election, the company said.