Marc Benioff, CEO of Salesforce, spoke at the World Economic Forum in Davos, Switzerland, on January 18, 2024.

At Salesforce’s annual meeting, shareholders rejected the proposed compensation plan for top executives, including CEO Marc Benioff. The decision followed concerns from advisory groups about stock awards granted to Benioff.

Of the votes cast, 339.3 million were in favor, while 404.8 million were against, according to regulatory documents filed Monday.

Despite the board’s recommendation to approve the compensation plan, shareholder advisory firms Glass Lewis and Institutional Shareholder Services advised against adopting it.

For fiscal 2024, Benioff’s total compensation increased to $39.6 million from $29.9 million the previous year. His salary remained flat at $1.55 million, but he received additional stock and option awards, along with compensation from non-equity incentive plans. Also included were security fees not previously billed to the company.

In January, the board’s compensation committee awarded Benioff a second long-term equity award worth $20 million, citing the company’s successful transformation and solid financial performance.

Glass Lewis expressed concerns about the substantial discretionary capital grants made to Benioff, questioning the necessity of such awards given his already significant stake in the company, valued at about $6 billion. They deemed the additional stock units and options «unjustified.»

While the annual meeting vote is not binding, the board acknowledged shareholder concerns and committed to considering the outcome of the vote in future executive compensation decisions.

Salesforce has not commented on the matter.

Salesforce shares rose 67% for the fiscal year ended Jan. 31, marking their strongest performance since 2011. Net income rose to $4.1 billion from $208 million a year earlier, with revenue up 11% to $34.9 billion. In January 2023, Salesforce announced a 10% headcount reduction amid pressure from activist investors to better balance profits and growth. The company also began issuing dividends to shareholders in February.

Salesforce shares are down 2.6% so far this year.