Salesforce isn’t offering raises this year to employees at the director level and above, according to an internal email viewed by Business Insider.
“We have decided to focus merit increases at the Senior Manager level (grade 8) and below,” states the email, sent by the company’s human-resources team.
Instead of giving raises, the company said it is increasing stock and bonus pools for its “highest performing individuals” among upper-level employees, calling it part of an “investment in performance and long-term growth.”
Employees will learn about their compensation during performance reviews, which begin at the end of March.
Salesforce’s decision could reflect a broader shift in how Big Tech is paying senior talent. Instead of increasing base pay, some companies are increasingly tying compensation to stock performance and equity, preserving cash while still incentivizing top leaders. Meta just announced this week that it created a lucrative incentive system for stock for a number of its C-suite executives.
Salesforce stock is down about 37% over the past year. CEO Marc Benioff recently downplayed fears about AI’s threat to software-as-a-service companies. Those fears have prompted recent sell-offs of software stocks.
The email stated that 10% more directors and senior directors are getting stock grants, that the average stock grant increased, and that 80% of directors and senior directors who received “highly successful” or “exceptional” performance ratings received a 20% to 40% bigger grant.
The pool for bonuses “is funded at 103%,” the email stated. Most eligible directors and senior directors received 100% or more of their bonus, and all of the directors and senior directors who received the top performance ratings got 115% to 140% of their bonuses.
Salesforce laid off some employees around the start of its fiscal year Feb. 1. Those cuts affected fewer than 1,000 employees, according to a person familiar with them. Around that time, the company also hired or promoted six new leaders, replacing five high-profile leaders who had recently announced departures from the company.
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