Salesforce CEO Benioff Gets Big Raise After 10 Years At $10
After 10 years of receiving an annual salary of $10, Salesforce.com CEO Marc Benioff has a new pay package of $7.7 million options and a $750,000 salary. For the good of future entrepreneurs everywhere, I hope the news doesn't spark Washington-style nattering about "excessive" executive compensation. Benioff deserves every cent.
After 10 years of receiving an annual salary of $10, Salesforce.com CEO Marc Benioff has a new pay package of $7.7 million options and a $750,000 salary. For the good of future entrepreneurs everywhere, I hope the news doesn't spark Washington-style nattering about "excessive" executive compensation. Benioff deserves every cent.The board granted Benioff options on 600,000 shares of common stock with an exercise price of $25.97, which was the fair-market value of the stock on Nov. 25, 2008, when the compensation package was put together, according to Salesforce's May 1 proxy statement. Those 600,000 shares are subject to the company's standard four-year vesting plan.
In addition to the options and the $750,000 salary, Benioff is also eligible under his new compensation plan to receive an annual performance-based bonus equal to up to 100% of his base salary.
Salesforce's annual proxy statement, dated May 1, makes for some fascinating reading in the section under "CEO Compensation" that attempts to articulate in precise and flowing language its rationale for changing the annual compensation for the CEO of a $1.1 billion company who over the past decade had drawn a salary of only $10 per year.
One year ago, the board's compensation committee began "exploring the development of a meaningful compensation package for our CEO" because "a more traditional structure, which included an appropriately-compensated chief executive, was needed as the company entered its next stage of development," the proxy statement says.
The Salesforce board "sought to recognize our CEO's ongoing contributions, both as a leader of a successful organization and as an industry visionary, and to ensure that he would continue to devote his skills, acumen, and experience" as CEO "for the foreseeable future."
That mumbo-jumbo aside, Benioff deserves every cent of his new package because of the success he has built for his company, its customers, its employees, and its partners. In addition, Benioff owns more than 13 million shares of stock in the company he founded just over 10 years ago, and those holdings at current prices are worth more than $500 million. And he richly deserves every every cent of that half-billion as well.
Marc Benioff's is the story of a lot of visionary entrepreneurs who undertook significant risks to build something out of nothing: creating thousands of jobs, fostering a massive innovation in what had otherwise become a monolithic business, generating high standards of living for employees who invested much of that in their communities, driving great business capabilities among customers, and leading an aggressive and very personal philanthropic effort across not only his company but also Salesforce's customer/partner ecosystem.
So while I might joke -- a little bit - about Benioff needing Barney Frank's permission to receive the kind of compensation he's getting, we should all think very carefully these days about what level of governmental involvement we want to allow in such matters as executive compensation. It's already happening in companies that have taken loans from the government, and it's not unlikely to think that such a policy could soon be extended to companies that sell to the government or would like to sell to it.
And maybe, even without those 13,000,000 shares that he earned so fully as founder and leader over 10 years, Marc Benioff would have started Salesforce and attracted great people and created thousands of jobs and donated many millions to charitable causes. But maybe not - and for the good of future entrepreneurs and the hundreds of thousands or millions of jobs they'll create, let's not create an oppressive regulatory environment that gives us an answer we're not going to like.
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