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Salesforce stock drops as co-CEO Bret Taylor steps down

Yahoo Finance Live anchors discuss the decline in stock for Salesforce following news that co-CEO Bret Taylor will step down.

Video transcript

- Guys, also taking a look at Salesforce stock this morning, investors, they are looking past its third quarter earnings beat. And they're focusing on a major announcement that is really sending shares lower here today by about 7%, that its co-CEO Bret Taylor is stepping down. And also, the cloud giant's weak Q4 guidance is being priced into this too. There's a lot to really break down. But I think Bret Taylor and the departure there, as they had talked about it on the call and what comes next from this point-- there was a lot of congratulations from much of the analysts that were on the call yesterday too and just saying wish you the best and all of that jazz. But at the same time, this has been a difficult year for Salesforce too.

The stock has moved lower, essentially been cut in half since some of those highs that we saw this time last year in November of 2021 as well. So you think back to that time period and coming off of some of those highs and the pull forward in demand and now trying to drum up or demand generation period themselves back into significant growth. That's what the big question still lingers around.

- Yeah. And now you have Marc Benioff, who has burned through two co-CEOs in three years. That's effectively what this means with this departure of Bret Taylor. Now, Bret Taylor had a rough year, not just at Salesforce, right, he was chair of the board at Twitter also while all that was going on. And so he was very busy trying to deal with that as well. But remember, Keith Block, the last co-CEO, left the company about three years ago.

Taylor had only been in that co-CEO role for a year, almost exactly a year. He had been with the company for about six years after Salesforce acquired the company of which he was CEO previously. And so Benioff still maintains he has a deep bench and he has other-- there are other folks. Stewart Butterfield of Slack is within the company. There are some other folks who are there within the company. But this does raise questions about the co-CEO structure at all. When you have such an outsized personality as Benioff trying to run the company with someone else, is it time to reexamine whether that's even a good idea?

- This has actually been a strategy that a lot of the cloud companies specifically or the ERP companies have rolled out. SAP has had this. They had that for years, actually, and really gave them more of an ability to have someone who is more North America focused as well as someone who is a little bit more internationally focused. Oracle. We had seen that similarly before the passing of Mark Hurd as well. Safra Catz, Mark Hurd in the tandem there.

And then, of course, at Salesforce too. And so it has been that kind of co-CEO strategy that they've tried to explore to have that both North American approach as well as the international approach. But I think that perhaps could be under the microscope now, especially given the pull forward as we were talking about in demand. And now you're going to specifically be leaning into certain categories where you've already invested. And it could be more of a categorical approach more than a geographical approach that you have to take at this point.

- Maybe so. Yeah. Brent Thill over Jeffrey summing it up, saying the co-CEO Bret Taylor his departure caught us by surprise and is showing the co-CEO model isn't working, with two departures in three years. So we'll keep an eye on what Salesforce does next on that front.