Salesforce just announced the cash bonus awards it granted to executives and, not surprisingly, its founder CEO Marc Benioff (the heart and soul of the company) did well, collecting a $2.33 million bonus.
That’s a four-times bigger cash bonus than what most of the other named executives got, including Salesforce’s other cofounder, and head of engineering, Parker Harris. Harris and most of the others got $525,000.
Meanwhile, top sales guy, COO Keith Block also did better than average. His cash bonus was $807,750. (Benioff can’t stop showering Block with promotions, money and gifts. Benioff also bought Block a $40,o00 watch this year and expensed it to Salesforce.)
While the company has promised it will freeze Marc Benioff’s base salary of $1.55 million, in response to investor concerns over his pay package, in truth that $1.55 million is only a tiny fraction of the money he makes from the company. And the same goes for the $2.33 million bonus.
Like most executives, his true pay comes from the stock he’s granted. Salesforce has given him ample stock grants, recently changing them to restricted stock units tied to various performance metrics.
Benioff is the company’s biggest individual shareholder, with over 40 million shares that gives him 6% of the company.
What’s unusual about Benioff’s pay is that these stock grants and options allow him to sell off huge chunks of stock at a machine-gun pace and still remain the company’s top shareholder.
For instance, Benioff’s mentor, Oracle founder and executive chairman Larry Ellison, has accumulated a huge amount of stock options over the years, turning him into one of the world’s richest men. But he rarely sells his Oracle stock.
In contrast, Benioff sells off 12,500 shares in automatic, pre-scheduled sales as often as every couple of days, collecting the better part of a $1 million on each sale. (There’s nothing improper with automatic sales. It’s what all named executives do to convert the stock they are paid as part of their salaries into cash.)
Since the start of January, 2016, Benioff has already sold chunks of stock 65 times, dropping over $56 million into his pocket, according to insider trading SEC forms as gathered by Yahoo Finance.
So, even while his $2.33 million bonus is 3-4 times bigger than the other executives, it’s still only a tiny fraction of what he’s making from his job as CEO.
Salesforce has been crushing its sales goals the past couple of years, although its stock price has been somewhat stagnant over the past 12 months, mostly hovering below $80/share (and falling as low as $54 in February).
Some shareholders have complained about the amount of money Salesforce spends on employee compensation, particularly Benioff’s, especially because the 17-year-old company remains unprofitable and has never issued a dividend.
Nearly 47% of the shareholders voted against Salesforce’s executive-compensation packages at last year’s annual shareholders meeting.
Business Insider Emails & Alerts
Site highlights each day to your inbox.