That could buy some time for the beleaguered company, and it was certainly better than a poor report. But is it enough to keep the activist investors at bay? On the same day the company was to report earnings, one of those activists, Elliott Management, indicated that it would be putting forth its own slate of candidates for the board of directors, a move aimed at gaining enough voting control to impose its agenda. With successful quarterly revenue of $8.38 billion, Salesforce now faces scrutiny regarding how it could lay off 10% of its workforce amid such great performance (and news reports it paid actor Matthew McConaughey $10 million to act as a consultant). None of this is a great look for Salesforce, especially as a company that promotes itself as being a responsible capitalist. The executive suite finds itself caught in between critics with conflicting agendas, all while trying to run a company. It’s unlikely that anyone has any sympathy for CEO Marc Benioff and his team as they try to run this gauntlet, but it is their reality for the time being. Will this week’s promising report fend off the activist investor hawks, who are gunning for the company and pressuring it to cut costs even more? And can Salesforce manage to keep the growth trend going, especially with lower growth guidance for next fiscal year and an uncertain economy? One thing’s clear: It’s probably not going to get easier anytime soon.
We don’t know what the activists are thinking as they look to increase the value of their investments, but Elliott Management, which invested billions of dollars in Salesforce, issued a statement after earnings came out indicating it was pleased, which is no small feat.
Will one good quarter appease the activist investors dogging Salesforce? by Ron Miller originally published on TechCrunch