8-KLeadership Changes

Salesforce, Inc. 8-K Report, Executive Changes (Jun 13, 2007)

Filed June 13, 2007For Securities:CRM

Summary

Salesforce.com, Inc. (CRM) filed an 8-K on June 13, 2007, detailing changes to its compensation structure for non-employee directors and the appointment of a lead independent director. The company approved a new compensation arrangement set to take effect in November 2007, which includes quarterly retainers, additional fees for committee chairs, and per-meeting attendance fees. Furthermore, the filing outlines a new equity compensation package for incoming directors, consisting of stock options and restricted stock units that vest over four years, with accelerated vesting upon a change of control. Existing directors will continue under the current arrangements until November 1, 2007. The appointment of Sanford Robertson as the lead independent director is also a key governance development highlighted in this report.

Key Highlights

  • 1New compensation structure for non-employee directors approved, effective November 1, 2007.
  • 2Quarterly retainer for directors set at $12,500.
  • 3Additional quarterly fees for committee chairs: $5,000 for Compensation and Nominating/Corporate Governance, $10,000 for Audit.
  • 4Directors to receive $1,250 per meeting attended (Board or committee), with no additional fees for regular Board meetings.
  • 5Lead independent director to receive an annual retainer of $15,000, effective immediately.
  • 6New directors will receive an initial grant of 15,000 stock options and 5,000 RSUs, vesting over four years.
  • 7Sanford Robertson appointed as the lead independent director.

Frequently Asked Questions

Salesforce has approved a new compensation arrangement for its non-employee directors, effective November 1, 2007. This includes a quarterly retainer of $12,500, additional quarterly fees for committee chairs (Audit: $10,000, Compensation and Nominating/Corporate Governance: $5,000), and a $1,250 fee per meeting attended. The lead independent director receives an additional $15,000 annual retainer.

New directors will receive an initial grant of 15,000 stock options and 5,000 restricted stock units (RSUs) upon appointment or election. These equity awards vest over four years, with 25% vesting after the first year and the remainder vesting over the subsequent period. All equity vests immediately in the event of a change of control.

Sanford Robertson has been appointed as the lead independent director, effective June 7, 2007. He will receive an annual retainer of $15,000.

The new compensation arrangements will go into effect for existing directors on November 1, 2007. For new directors joining the board, the new terms are effective from their date of appointment or election.