Salesforce will not be giving raises this year to employees at the director level and above. A recent email from the company’s human-resources team informed employees of the development. “We have decided to focus merit increases at the Senior Manager level (grade 8) and below,” the email said.
Employees will get more information about their compensation during performance reviews that begin at the end of March.
No salary hikes at Salesforce
The San Francisco-headquartered Software-as-a-Service (SaaS) company will increase stock and bonus pools for certain employees instead of handing out direct hikes at the top level.
For upper-level employees, the company is increasing stock and bonus pools for its “highest performing individuals,” describing it as an “investment in performance and long-term growth.”
(Also read: Indian-origin founder shares ‘cold email’ he sent to Salesforce CEO Marc Benioff 21 years ago: ‘It changed my life’)
The email, reviewed and reported by Business Insider, said that 10% more directors and senior directors are receiving stock grants. It also announced that the average stock grant has increased, and 80% of directors and senior directors rated “highly successful” or “exceptional” will get grants 20% to 40% larger.
Regarding bonuses, the email stated that the pool “is funded at 103%.” Most eligible directors and senior directors received 100% or more of their bonus, and those with the top performance ratings were granted between 115% and 140%.
Is AI to blame?
The Business Insider report noted that Salesforce stock is down 37% over the past year. The downturn was attributed by some to the AI revolution and fears of artificial intelligence taking over entry-level tech jobs.
However, CEO Marc Benioff earlier sought to downplay AI’s threat to SaaS companies. Last month, at the company’s Q4 earnings call, he said, “”If there is a ‘SaaSpocalypse’, it may be eaten by the ‘SaaS-quatch’ because there are a lot of companies using a lot of SaaS because it just got better with agents.”
The CEO of Epic Games, which laid off 1,000 employees this week, also refused to blame AI. Instead, Tim Sweeney put the blame on slowing demand for Fortnite.
(Also read: Fortnite maker lays off 1,000 employees. Read Epic Games CEO’s full memo)
