Salesforce Co-CEO Keith Block Steps Down -- 3rd Update
February 26 2020 - 7:44AM
Dow Jones News
By Sarah E. Needleman
Salesforce.com Inc. said Co-Chief Executive Keith Block is
stepping down from his role, just 18 months after taking the job,
ending for now a brief experiment with dual CEOs and leaving Marc
Benioff in charge of the business-software provider.
Mr. Block, a former Oracle Corp. executive, joined Salesforce in
2013 as president and vice chairman. He became co-CEO in 2018 in an
unusual setup that paired him with Mr. Benioff, a Salesforce
co-founder with an array of outside interests that now include
ownership of Time magazine.
Mr. Block had oversight of day-to-day operations while Mr.
Benioff led Salesforce's vision and innovation, among other
areas.
"Keith is an incredible leader and close friend who has helped
position us as a global leader and deeply strengthened our
company," Mr. Benioff said on a conference call with analysts.
Mr. Block will serve as an adviser to the CEO.
Salesforce said its revenue more than quadrupled over Mr.
Block's time at the company to more than $17 billion in the year
ended Jan. 31.
The leadership move, which surprised some Wall Street analysts,
came as the company posted stronger-than-expected revenue in the
latest quarter and adjusted earnings above analysts' forecasts.
Its shares fell more than 3% in after-hours trading.
Founded in 1999, San Francisco-based Salesforce has evolved to
become one of the largest providers of software products for
businesses. Though its roots are in customer-relationship
management software, Salesforce has bolstered its offerings over
the years as enterprises have increased spending to digitize key
business tasks.
Salesforce's stock-market capitalization of more than $160
billion is close to rival Oracle despite the company being launched
more than 20 years later.
In recent years, Salesforce has been looking to boost revenue
through acquisitions. The company's more than $15 billion deal for
data analytics provider Tableau Software, which closed last year,
was the largest in its history.
Mr. Benioff told analysts Tuesday that the acquisitive company
will take a pause from deal-making even as it announced the
purchase of cloud-software provider and Salesforce partner Vlocity
Inc. Salesforce's venture arm was among investors participating in
a $60 million Series C funding round for Vlocity last year. Aside
from the Vlocity deal, valued at $1.33 billion net of shares
Salesforce already owns, Mr. Benioff said "we don't see some huge
opportunity to do a lot more acquisitions right now. It's not
something that we're working on."
The executive change at Salesforce came as the company reported
swinging to a fourth-quarter loss of $248 million from a profit of
$548 million a year earlier.
Excluding items such as stock-based compensation, Salesforce
posted a profit of 66 cents a share, which was stronger than Wall
Street had expected, but lower than the 70 cents a share generated
a year earlier.
Sales in the quarter rose 35% to $4.85 billion, compared with
the $4.76 billion that analysts surveyed by FactSet had
expected.
Salesforce's closely watched anticipated billings for the coming
months from its subscription-based revenue model rose 26% year over
year. It previously promised growth of about 21%.
Salesforce also Tuesday named Gavin Patterson, a former chief of
BT Group PLC, as president and chief of Salesforce
International.
Mr. Patterson was most recently Salesforce's chair of Europe,
the Middle East and Africa. The company said he now oversees its
largest markets outside the U.S.
The twin-CEO structure has had a mixed record at the small
number of companies that have tried it over the years.
Oracle abandoned its dual-CEO structure after the death of Mark
Hurd last year, leaving Safra Catz as the database provider's sole
chief executive. German rival SAP SE adopted a co-CEO leadership
team last year.
A leadership duo at Deutsche Bank AG struggled after a series of
financial missteps and regulatory penalties led both co-CEOs to
resign in 2015.
Write to Sarah E. Needleman at sarah.needleman@wsj.com
(END) Dow Jones Newswires
February 26, 2020 07:29 ET (12:29 GMT)
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