Salesforce Proxy Voting Guide Proxy Voting Guide

Salesforce Proxy Voting Guide

Salesforce Proxy Voting Guide by, inc. develops enterprise cloud computing solutions with a focus on customer relationship management., inc. (CRM) is one of the stocks in my portfolio. had collected the votes of three fund families when I checked and voted. Their annual meeting is coming up on June 6, 2017

I voted FOR #7 the ability of shareholders to call a special meeting. See how and why I voted other items below. I voted with the Board’s recommendations 59% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A).

SalesforceRead Warnings below. What follows are my recommendations on how to vote the proxy in order to enhance corporate governance and long-term value. Proxy Voting Guide: ISS Rating

From the Yahoo Finance profile:, inc.’s ISS Governance QualityScore as of May 1, 2017 is 10. The pillar scores are Audit: 2; Board: 6; Shareholder Rights: 6; Compensation: 10. Brought to us by Institutional Shareholder Services (ISS). Scores range from “1” (low governance risk) to “10” (higher governance risk). Each of the pillar scores for Audit, Board, Shareholder Rights and Compensation, are based on specific company disclosures. That gives us a quick idea of where to focus: the Board, Shareholder Rights and especially Compensation. Proxy Voting Guide: Compensation’s Summary Compensation Table shows the highest paid named executive officer (NEO) was Chairman and CEO Marc Benioff at $13.2M in 2016. I am using Yahoo! Finance to determine the market cap ($64.6B) and I am roughly defining large-cap as $10B, mid-cap as $2-10B, and small-cap as less than $2B. is a large-cap company. According to EY Center for Board Matters, the 3-yr average CEO compensation at large-cap corporations is $12.7M, so pay was just below that amount.’s shares outperformed the NS&p 500 over the most recent two, five, and ten year time periods, but underperformed in the most recent one year time period.

Egan-Jones Proxy Services takes various measures to arrive at a proprietary rating compensation score, which measure wealth creation in comparison to other widely held issuers. earned a compensation score of “Neutral,”

we believe that shareholders should support the current compensation policies put in place by the Company’s directors. Furthermore, we believe that the Company’s compensation policies and procedures are centered on a competitive pay-for-performance culture, strongly aligned with the long-term interest of its shareholders and necessary to attract and retain experienced, highly qualified executives critical to the Company’s long-term success and the enhancement of shareholder value. Therefore, we recommend a vote FOR this Proposal.

I agreed and voted “FOR” the say-on-pay item. Proxy Voting Guide: Accounting

I have no reason to believe the auditor has rendered an inaccurate opinion, is engaged in poor accounting practices, or has a conflict of interest. However, Egan-Jones recommends voting against, favoring auditor rotation after seven years. I am not quite ready to set that as the bar, so voted FOR Ernst & Young, LLP. Proxy Voting Guide: Board Proposals

With respect to Directors, Egan-Jones’ advice included the following:

Inside director Marc Benioff is a current Chairman of the Board and CEO of the Company, and combined with the Board Rating of Some Concerns the Company has received, we recommend that clients WITHHOLD votes from this nominee. We believe that there is an inherent potential conflict, in having the CEO or former CEO serve as the Chairman of the Board. Consequently, we prefer that companies focus on the following areas to improve its corporate governance practices: separate the roles of the Chairman and CEO, hold annual director elections, have one class of voting stock only, have key board committees consisting of independent directors and majority of independent directors on board and include non-binding compensation vote on agenda to further ensure board independence and accountability.

Moreover, as the Company’s Amended and Restated 2013 Equity Incentive Plan earns an AGAINST recommendation due to its dilutive effect to the interests of the shareholders, we recommend that clients WITHHOLD votes from the members of the Compensation Committee, namely Independent outside director John V. Roos and Affiliated outside directors Craig Conway and Maynard Webb. Egan-Jones believes that the Compensation Committee should be held accountable for such disapproval and that the board as a whole should seek to align CEO and employee pay more clearly as well as link that pay with the performance of the company, and work to reduce the potential cost of any similar plan that may be proposed in the future.

In addition, we recommend that clients WITHHOLD votes from Affiliated outside director Craig Conway, current member of the Compensation Committee, Affiliated outside directors Alan Hassenfeld and Sanford Robertson, current members of the Audit and Nominating and Corporate Governance Committees, and Affiliated outside director Maynard Webb, current member of the Audit and Compensation Committees of the Board. We believe that key Board committees namely Audit, Compensation, and Nominating Committees should be comprised solely of Independent outside directors for sound corporate governance practice.

I agree on all these but am not quite ready to automatically vote against all combined CEO/Chairs… maybe next year.  I also agree, proposal #2, Amend Omnibus Stock Plan, is too dilutive and is not adequately tied to performance, so voted AGAINST.

With regard to proposal #3, Amend Qualified Employee Stock Purchase Plan, Egan-Jones notes,

An Employee Stock Purchase Plan or (ESPP) can be an important tool increasing ownership among company employees. In the US the tax advantages of a qualified plan are compelling, but qualifying for these tax benefits requires shareholder approval of the plan as well as several other structural elements, such as a minimum of 85% of fair market value as a minimum stock price and holding of the stock for a defined period of time. Egan-Jones supports the establishment of such qualified ESPPs unless there is a compelling example of prior abuse or significant reason to expect such abuse in the future.

We find no evidence of prior or expected future abuse of this ESPP and note that it appears to meet the requirements of a qualified plan. Thus we believe this ESPP to be in the best interests of shareholders, we recommend a vote FOR this Proposal.

I agree and voted FOR. Proxy Voting Guide: Shareholder Proposals

#7 Shareholders May Call Special Meeting

James McRitchie (that’s me) is the proponent. I voted ‘FOR.’

Egan-Jones writes: “We do not believe it is appropriate to enable holders of below 25% of the common stock to have an unlimited ability to call special meetings for any purpose at any time. As such, we recommend a vote AGAINST this Proposal. Delaware law allows a 10% threshold to call a special meeting. My proposal for 15% seems a reasonable compromise.

My proposal should also be seen in context. shareholders currently have no right to call a special meeting. We have no right to written consent. Changing many of the bylaws requires a vote of 67%. In comparison, 63% of large-cap companies provide a right to call special meetings. The vote is advisory, so the Board could adopt a threshold of 20%, if they believe 15% is too low. Proxy Voting Guide: Votes Against Board Position in Bold Proxy Insight

As mentioned above, had collected the votes of three funds when I voted.  Proxy Insight reported additional votes from three additional funds. All voted FOR #7 to allow shareholders to call a special meeting.

1aElect Director Marc BenioffForForForFor
1bElect Director Keith BlockForForForFor
1cElect Director Craig ConwayAgainstForForFor
1dElect Director Alan HassenfeldAgainstForForFor
1eElect Director Neelie KroesForForForFor
1fElect Director Colin PowellForForForFor
1gElect Director Sanford RobertsonAgainstForForFor
1hElect Director John V. RoosAgainstForForFor
1iElect Director Robin WashingtonForForForFor
1jElect Director Maynard WebbAgainstForForFor
1kElect Director Susan WojcickiForForForFor
2Amend Omnibus Stock PlanAgainstAgainstAgainstAgainst
3Amend Qualified Employee Stock Purchase PlanForForForFor
4Ratify Ernst & Young LLP as AuditorsForForAgainstFor
5Advisory Vote to Ratify Named Executive Officers’ CompensationForForForAgainst
6Advisory Vote on Say on Pay FrequencyOne YearOne YearOne YearOne Year
7Shareholders May Call Special Meeting

Has user-contributed links Has 1 user-contributed link with more info
FORForForFor Proxy Voting Guide: Issue for Future Proposals

SharkRepellentLooking at for other provisions unfriendly to shareowners. The main outstanding issue is proxy access:

  • Proxy access ‘lite’ (my term) provision whereby a stockholder or group of no more than 20 stockholders holding at least 3% of the outstanding common stock continuously for at least three (3) years may nominate directors, so long as the number of directors elected via proxy access does not exceed the greater of two directors or 20% of the board.
  • No action can be taken without a meeting by written consent.
  • Shareholders cannot call special meetings.
  • Supermajority vote requirement (66.67%) to amend certain charter and all bylaw provisions. Proxy Voting Guide: Mark Your Calendar

Any stockholder proposal submitted for inclusion in the Company’s proxy statement for the 2018 Annual Meeting of Stockholders pursuant to Rule 14a-8 of the Exchange Act should be addressed to the Secretary of the Company at the address set forth above and must be received at our principal executive offices not later than December 27, 2017. In the event the date of the annual meeting is moved by more than 30 days from the one-year anniversary of the date of the 2017 Annual Meeting, then notice must be received within a reasonable time before the Company begins to make its proxy materials available. Upon such an occurrence, the Company will publicly announce the deadline for submitting a proposal by means of disclosure in a press release or in a document filed with the SEC.


Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime).I generally vote against pay packages where NEOs were paid above median in the previous year but make exceptions if warranted. According to Bebchuk, Lucian A. and Grinstein, Yaniv (The Growth of Executive Pay), aggregate compensation by public companies to NEOs increased from 5 percent of earnings in 1993-1995 to about 10 percent in 2001-2003.

Few firms admit to having average executives. They generally set compensation at above average for their “peer group,” which is often chosen aspirationally. While the “Lake Woebegone effect” may be nice in fictional towns, “where all the children are above average,” it doesn’t work well for society to have all CEOs considered above average, with their collective pay spiraling out of control. We need to slow the pace of money going to the 1% if our economy is not to become third world. The rationale for peer group benchmarking is a mythological market for CEOs.

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