Salesforce Boosts Share Repurchase by an Additional $10 Billion – Buyback Wednesdays

After years of diluting shareholders (30% over four years to be precise), Salesforce (CRM) has suddenly gotten buyback religion and announced an additional buyback of $10 billion last week. The buyback represented around 6% of its market cap at announcement. Salesforce announced its first-ever $10 billion buyback last year in August and upgraded it to $20 billion on March 1, 2023.

Since that announcement last year, the company has repurchased a smidgen of stock after taking stock-based compensation into account, which was an astounding $809 million last quarter. For fiscal 2023, which ended in January 2023, the company had $3.28 billion in stock-based compensation expenses, a record for the company. Shareholders were left with a paltry $208 million in GAAP net income. It is not surprising that there was a management shakeup at the company and not one, but six activists are involved as we cover later in this article.

The company’s share price peaked in November 2021 at over $300 per share and at its trough last December had dipped to below $130. We saw a rebound this year as we have seen with the entire tech sector and the stock currently trades at $183.32.

Surprisingly, buyback activity dropped significantly last week with 16 companies announcing buybacks compared to 28 companies in the prior week. This is inclusive of a bunch of accelerated share repurchase (ASR) agreements executed by a few companies. The most significant was a $2.5 billion ASR by Verisk Analytics, Inc. (VRSK).

C-Suite Management Changes at Salesforce:

Salesforce recently saw departures of several top-level executives. Among those who left the company were the Co-CEO and Chief Strategy Officer as well as two CEOs of the company’s Tableau and Slack divisions. We covered these personnel departures in our article, C-Suite Transitions – Management Shakeup At Salesforce.

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