Once again, Salesforce has just one CEO.
Just over a year after he was appointed co-CEO with Marc Benioff—who co-founded the cloud software company in 1999—Bret Taylor is stepping down, according to an announcement yesterday (Nov. 30). He will leave the company on Jan. 31, 2023.
“Marc was my mentor well before I joined Salesforce and the opportunity to partner with him to lead the most important software company in the world is career-defining,” Taylor said in his parting statement. “After a lot of reflection, I’ve decided to return to my entrepreneurial roots. Salesforce has never been more relevant to customers, and with its best-in-class management team and the company executing on all cylinders, now is the right time for me to step away.”
Benioff labelled Taylor’s decision to resign “bittersweet.”
Bret Taylor’s corporate and “entrepreneurial roots”
Starting out as a product manager for Google, Taylor made waves as the founder of FriendFeed—a feed aggregator and social network that Facebook (now Meta) acquired in 2009. At Google and Facebook, he has been credited with building Maps and the Like button respective.
Taylor, who was Facebook’s chief technology officer during its 2012 IPO, left the company to build a startup. He made Quip, a mobile-first word processor, to “do for tablets and phones what Microsoft Office did for the PC.” That got him a foot in the door at Salesforce. The San Francisco-based cloud giant acquired Quip in 2016 for $750 million, and got Taylor as part of the bargain.
Taylor has spent six years at Salesforce. Most recently, he worked as president and chief operating officer before being elevated to co-CEO. He was a key figure in brokering Salesforce’s $27.7 billion takeover of workspace messaging platform Slack in July 2021.
The case for a co-CEO
Marc Benioff: “I have found that having a co-CEO relationship is extremely important, because it allows more balance in the operation of the company. If it is the right relationship, then it can have tremendous power and capability inside of the company but also give more coverage to the customers and to investors and to the stakeholders.”
Salesforce, by the digits
3%: The share of Salesforce that Benioff owns
6%: The fall in Salesforce’s stock in after-hours trading, after news of Taylor’s departure broke, even as the company posted better-than-expected quarterly results
40%: The fall in Salesforce’s shares since the start of the year
$22.8 million: Taylor’s remuneration in fiscal year 2022
Are two CEOs better than one?
Industry watchers expected the Taylor-Benioff association to be a long-lasting one. “His departure raises questions about why he’s leaving and how operational leadership will be divided and delegated,” Steve Koenig, managing director at SMBC Nikko Securities, told Reuters.
The previous co-CEO, Keith Block, also didn’t last very long, serving 18 months from 2018 to 2020.
The co-CEO model has both pros and cons, Maksym Liashko, CEO of the product company Parimatch Tech, which had two CEOs until April this year, wrote for the publication Entrepreneur. On the one hand, “two heads are better than one,” Liashko wrote, adding that it leaves room for brainstorming and getting second opinions. But on the other hand, this deliberation can turn decision-making into a more time-consuming process. The model can also blur the line of responsibility and accountability for shareholders, investors, and employees.
But that doesn’t mean it can’t be done. In fact, Harvard Business Review (HBR) research points to co-CEO tenures lasting as long as sole CEOs’—and generating better shareholder returns along the way. It may not be the right fit for every company, but many could do with spreading out responsibilities.
“Under the right circumstances, it’s remarkable how much co-CEOs can do. They can bring deep and diverse competencies, backgrounds, and perspectives to the job. They can be in two places at once—literally. They can form a left-brain/right-brain partnership,” HBR noted. “If one half of the duo leaves, the other can ensure a stable transition. And co-CEOs double a company’s opportunity to diversify the C-suite.”
Chip Kaye, who was co-CEO of the private equity firm Warburg Pincus before becoming sole CEO, said sharing power helps keep “egos in check.”
Which companies have had co-CEOs?
A slew of companies have had robust runs with the co-CEO structure:
- Grocer Whole Foods had two co-CEOs between 2010 and 2016.
- Chipotle had two CEOs for seven years until it went back to one in 2016 after a year of food crises caused sales and the stock to plummet.
- Workday, the HR software giant, moved to a two-CEO arrangement in 2020, splitting the order of business. Aneel Bhusri, the co-founder, handles product and technologies as well as corporate functions, including the offices for HR, finance, and operations, while Chano Fernandez oversees the entire customer relationship, ranging from acquisition to customer services to support.
- Oracle took on co-CEOs in 2014. It followed that model until one of them died in 2019.
- Atlassian, the software firm, is perhaps the most successful example of a company that has split the top job. Its co-founders have been co-CEOs for 20 years.
One ✂️ thing: Bret Taylor’s other job at Twitter is gone, too
The week Taylor was designated co-CEO at Salesforce, he was also named board chair at Twitter. He has shepherded the board during Elon Musk’s tumultuous takeover of the microblogging company this year. Then, last month, Musk dissolved the board and Taylor’s role within it.
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