Salesforce isn't giving raises to director-level and above employees this year, internal memo shows

In a recent internal communication, Salesforce announced that it will not provide raises this year to employees at the director level and above. The email, which was reviewed by Business Insider, indicated a strategic pivot towards focusing merit increases primarily on Senior Managers and lower-ranked positions. Instead of traditional salary increases, the company plans to enhance stock and bonus allocations for its top-performing senior employees. This approach is framed as an investment in performance and long-term growth, signaling a shift in compensation strategy that many in the tech industry are beginning to adopt. Performance reviews set to commence at the end of March will reveal how compensation will be distributed among employees. This decision by Salesforce appears to align with a broader trend in Big Tech, where companies are increasingly linking compensation to stock performance rather than raising base salaries. Recently, Meta also introduced a lucrative stock incentive program for its C-suite executives, reflecting this evolving compensation landscape. Salesforce's stock performance has been under pressure, having dropped around 37% over the past year. CEO Marc Benioff has attempted to quell concerns regarding the impact of artificial intelligence on the software-as-a-service sector, which has contributed to fluctuating stock prices. The internal memo highlighted that 10% more directors and senior directors will receive stock grants this year, with average grant sizes also increasing. Notably, 80% of those who achieved “highly successful” or “exceptional” performance ratings will see their stock grants grow by 20% to 40%. Additionally, the bonus pool is reportedly funded at 103%, with most eligible senior employees receiving bonuses of 100% or more. Those achieving top performance ratings are set to receive bonuses ranging from 115% to 140%. Earlier this year, Salesforce undertook layoffs affecting fewer than 1,000 employees and made several key leadership changes, including the hiring and promotion of six new leaders to replace five who departed. These moves come amidst a climate of increased scrutiny and competition in the tech sector.