Elliott Management, one of five activist investors active within Salesforce, has nominated candidates for the Salesforce board of directors. The move, confirmed by TechCrunch sources, indicates that negotiations to resolve this have broken down without reaching this point. CNBC was the first to cover the news.
“Elliot has been in constructive but engaged dialogue with the company over the past few weeks and has appointed a director to Salesforce’s board of directors,” a person familiar with the matter told TechCrunch.
That person shows that Elliott is putting maximum pressure on the company through dialogue and these appointments, and the company will be watching tonight closely to see what happens when Salesforce reports earnings later today. There is
“And we’re going to see basically what would happen if only what Elliott wanted to hear tonight, which is company improvements and overall changes, is announced. It’s time to figure out the next step.”
When the company nominates its own list of candidates to the board, the ultimate goal is to have a group of people on the board who can act on Elliott’s behalf and implement the changes they have in mind. It’s not clear what they want, but apparently that includes reducing operating costs and increasing profits, and possibly even selling off some of the non-core parts of the business.
So far, the company has announced changes such as laying off 10% of its workforce and reducing its real estate footprint to cut costs.
Elliott, who announced in January that it would acquire a multi-billion dollar stake, isn’t the only activist currently working within the company. Starboard Value, ValueAct, Inclusive Capital, and Third Point, who was involved last month, are also prominent activists investing in Salesforce. It’s very rare for him to have five activists working at the same time within a company like Salesforce, and this may be the first time.
Salesforce has not commented on this news. We’ll report earnings this afternoon after the bell.
