Jim Cramer suggested Saturday that plans for a leadership change at Club holding Salesforce (CRM) — helmed by co-founder Marc Benioff for more than two decades — may be disclosed in the near future. “There will be a good chance that Marc will [soon] announce a successor or Marc will announce that he will [only] be chairman,” Jim said Saturday during the Club’s first-ever “Annual Meeting” in New York City before a live audience. Benioff, an influential Silicon Valley entrepreneur and philanthropist, is currently chairman and CEO. Such a development would come after five activist investors — including the venerable hedge fund Elliott Management — have recently built stakes in the enterprise software maker, which is set to report fourth-quarter earnings after the closing bell Wednesday. Activist investors take positions in companies and push for changes to address what they perceive as problems, in hopes that fixing them will boost shareholder value. It’s a bit unusual to see five activists targeting the same company . But the pressure has been mounting since October, when Jeff Smith’s Starboard Value announced a position in Salesforce, lamenting what they felt has been a “subpar mix of growth and profitability” at the company in recent years. CRM YTD mountain Salesforce (CRM) YTD performance In early January, Salesforce announced a cost-cutting plan that included layoffs and office space reductions — moves that Jim has said were pushed for by Starboard . The extent of the activist involvement became clear not long after. It’s now known that Elliott Management, ValueAct, Jeff Ubben’s Inclusive Capital and Dan Loeb’s Third Point also built positions in Salesforce. ValueAct CEO Mason Morfit was named to Salesforce’s board of directors in late January, along with former Carnival cruise line CEO Arnold Donald and Mastercard finance chief Sachin Mehra. Despite that shakeup, Paul Singer’s Elliott was reportedly planning to nominate its own candidates for Salesforce’s board. CNBC’s David Faber reported last week that Elliott and Salesforce were in talks to avoid a proxy fight It’s not unusual for tech founders to eventually step aside as the company matures, and questions around succession at Salesforce have swirled for years. While Benioff has said he’s “never leaving” Salesforce , the company has twice elevated an executive to the role of co-CEO. First, it was Keith Block, who held the role from August 2018 to February 2020. More recently, Bret Taylor served as co-CEO from November 2021 to Jan. 31 of this year. Salesforce did not immediately respond to CNBC’s request for comment on Jim’s remarks Saturday. Bottom line It’s no secret Jim has been a fan of Benioff and a Salesforce shareholder for the Club for a long time. Jim readily admits that he counts Marc as a friend. But he stressed on the stage, “I know it’s not about friends. It’s about money,” underscoring his allegiance is always to make money for Club members. Jim said he wishes that the activists would leave Benioff alone. “I have counseled the activist that the one thing you don’t do is make it so he [Benioff] gets up that morning and says, ‘I don’t want anything to do with this,'” Jim warned. When it comes down to it, Jim said Salesforce has a great product, but acknowledged it’s a tough environment right now for enterprise software. But he said Benioff has made investors a lot of money over the years, and the activists should let Benioff do what he wants to do. (Jim Cramer’s Charitable Trust is long CRM. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Marc Benioff, founder, chairman and CEO of enterprise cloud computing company Salesforce.
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Jim Cramer suggested Saturday that plans for a leadership change at Club holding Salesforce (CRM) — helmed by co-founder Marc Benioff for more than two decades — may be disclosed in the near future.