Settlement Reached in Derivative Action Against salesforce.com
On December 21, 2018, Wolf Popper filed an action against salesforce.com, challenging the excessive amount of compensation salesforce’s board of directors had awarded non-employee directors for the Company’s 2016 through 2019 fiscal years. The award amounts at issue had been determined by the Board without shareholder approval, and were significantly larger than what non-employee directors were being compensated at salesforce’s peer companies. Plaintiffs brought claims alleging breach of fiduciary duty against all of salesforce’s board members, and unjust enrichment against the non-employee directors who had received the awards.
On September 17, 2019, Plaintiffs informed the Delaware Court of Chancery that the parties had agreed to settle the action. The settlement, which is subject to Court approval, requires salesforce.com to limit non-employee director compensation for its 2020-2024 fiscal years to no more than the total compensation paid to non-employee directors at the 75th percentile of salesforce’s peer companies, a benefit worth over $10 million. The Notice of Pendency of Settlement can be found here.
The Court of Chancery has scheduled a Settlement Hearing for December 17, 2019, at 1:30 p.m.