SEATS AT THE TABLE

Why Matthew McConaughey and Will.i.am "frequently" attending Salesforce meetings matters

Activist investors are sharpening swords in readiness for a battle over the company's future.
Will.i.am at a Gates Foundation meeting.
Will.i.am at a Gates Foundation meeting.
Photo: Elizabeth Shafiroff (Reuters)
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We’re living through another era of vicious battles between corporate management of publicly traded firms and activist investors with strong opinions about how those companies should be run differently.

A recent account of the situation at cloud software company Salesforce, where a combination of meteoric growth and lackluster profit has tempted activist investors to pounce, included the detail that celebrities are “frequently” invited to be part of high level company meetings—a practice that might be taken to suggest a certain kind of frivolousness. As such, it seems to back up the accusation, which has often been leveled at Salesforce CEO Marc Benioff, that he has become “distracted” by celebrity friendships, philanthropy, and other pursuits aside from increasing Salesforce’s stock price.

Where does such a detail come from? Matthew McConaughey is a “brand partner,” and starred in a 2022 Super Bowl ad to promote Salesforce’s TeamEarth initiative designed to improve business practices, particularly around the environment. Will.i.am’s tech business received Salesforce funding back in 2017 and he’s appeared onstage at Salesforce events and in videos online. But do either of them belong at meetings?

The “person familiar with the company” who told the Financial Times that the celebrities were “frequently involved in strategy discussions” there probably didn’t think so, hence leaking the names to the press. In a struggle for credibility and, ultimately, control of a $150 billion company, it’s not a crazy guess that the people who did the leaking were themselves among the activist investors keen that Benioff appear as an ineffective leader.

Activist investors weigh in

Salesforce has had a mixed few years. On the one hand, it has seen huge revenue growth, which Benioff is said to have prioritized over profits: The FT reports that sales leapt from $8 billion in 2017 to an estimated $31 billion in 2022, but profits have risen less dramatically. Salesforce has also made expensive, high-profile acquisitions like when it bought Slack, the workplace collaboration platform, in December 2020. In recent months, three well-known activist investors—Elliott Management, Starboard Capital, and Jeff Ubben via Inclusive Capital—have built up large stakes in the business.

Shareholders often argue that, while they have a responsibility to help companies run well and make money, they don’t want to “micromanage” business leaders. Activist investors are a different breed, however, often buying up big parcels of a company’s shares quickly with a view to exerting pressure on certain areas of the business, or pushing for leadership change.

Whatever Matthew McConaughey and Will.i.am were doing in those Salesforce meetings, the fact we know they were there suggests Salesforce founder Marc Benioff, sole CEO once more after a short stint as co-head of the company, is going to have a fight on his hands.