Feeling the heat of activist investors as it contends with a brutal tech downturn, Salesforce Inc. on Friday appointed three new board members.
named to its board of directors Arnold Donald, former chief executive of Carnival Corp.
; Sachin Mehra, chief financial officer of Mastercard Inc.
; and Mason Morfit, CEO of ValueAct Capital, an activist fund that is also an investor.
“As highly respected business leaders, they each bring valuable experience to further enhance and balance the diverse skills on the board and advance our value creation initiatives,” Salesforce CEO Marc Benioff said in a statement.
Sanford Robertson, co-founder of buyout group Francisco Partners, and Hasbro Inc.
chair emeritus Alan Hassenfeld, who have sat on Salesforce’s board since 2003, will step down.
Salesforce has become a favorite target of activists because of its dismal performance over the past year, as it and other major tech brands cope with a downturn following a pandemic-assisted boom. The company’s market value has been chopped in half from its peak in 2021 to about $165 billion.
ValueAct has a stake in the company, as does Elliott Management, which this week took a multibillion-dollar stake in the cloud-based enterprise software company. Starboard Value disclosed a Salesforce position in October.
Activists have pushed for board seats as well as for Salesforce to explore the sale of Tableau Software and/or Slack Technologies Inc., whose acquisitions cost a collective $43.4 billion.
“We expect board changes and are not surprised by Bloomberg headlines suggesting as much,” Macquaire Research analyst Benjamin Cohen said in a note Thursday.
The revamping of Salesforce’s board comes as investors are targeting some of the industry’s biggest names as they stumble through layoffs, plunging stock prices and slackening growth. Billionaire investors are proposing to swoop in, take some radical actions to raise stock prices, and then sell at a profit.
Walt Disney Co.
faces a challenge from Nelson Peltz, co-founder of of Trian Fund Management, an alternative-investment management fund based in New York, who wants a seat on the Disney board. Alphabet Inc.
meanwhile, is under assault from hedge-fund billionaire Christopher Hohn, who insists the Google parent company needs to slash at least 20% of the workforce. Hohn has said 12,000 layoffs are not enough to bring costs in line.
“When prices back off, it is a natural place to look for value and change in strategy. It is the standard playbook” for corporate activism, David Larcker, a corporate-governance expert at Stanford University, told MarketWatch. “But it used to be smaller, medium targets. We are in a bit of a different world now, with bigger companies being looked at and the ability to get more board seats.”
Salesforce shares were flat in afternoon trading Friday.