While still in the crosshairs of multiple activist investors, Salesforce came up big after announcing better-than-expected quarterly earnings. The company delivered across key metrics and disbanded its M&A committee to form a business transformation committee focused on “improving profitability.” Elliott Management, which has a multibillion-dollar stake in the company, released a statement acknowledging the results but noted that significant work remains. Earlier in the day, CNBC’s David Faber reported that Elliott nominated a slate of directors to Salesforce’s board that likely includes Elliott Managing Partner Jesse Cohn.
Yale School of Management’s Jeff Sonnenfeld suggests Benioff would do well to follow Bob Iger’s playbook in Disney’s successful defense against Trian by presenting a compelling plan and refusing to "concede to false narratives.” He even presented data revealing that four of the activist funds piled into Salesforce have “dramatically underperformed” compared to major stock indices and shouldn't be so quick to criticize Salesforce’s track record.
Outside of the Salesforce Tower, activists have also been busy pressuring the likes of Union Pacific, Bayer and Bath & Body Works. In a win for Soroban Capital Partners, which has publicly urged railroader Union Pacific for management changes due to underperformance, the company announced plans to replace CEO Lance Fritz. Over in Germany, Bayer invited activist Jeff Ubben to join the company’s sustainability advisory group, while Bloomberg’s Crystal Tse discussed the brewing proxy fight at Bath & Body Works after the company accused Dan Loeb of pursuing the “singular” demand of replacing a director he recommended with Third Point’s choice, former Third Point co-chief investment officer Munib Islam.
Have a great weekend,
GPP Team
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