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The Motley Fool's readers have spoken, and I have heeded your cries. After months of pointing out CEO gaffes and faux pas, I've decided to make it a weekly tradition to also point out corporate leaders who are putting the interests of shareholders and the public first, and are generally deserving of praise from investors. For reference, here is last week's selection.
This week, I want to take a closer look at the CEO of salesforce.com (NYSE: CRM ) , Marc Benioff, and show you why a mixture of growth, humility, and community makes him a great leader.
Kudos to you, Mr. Benioff
Just because I've been critical of Salesforce's valuation in the past doesn't mean I don't recognize what a remarkable job Benioff has done in transforming his company into a leading cloud-computing provider, all despite facing tough competition with considerably deeper pockets than its own.
Benioff's company now counts more than 100,000 enterprises as customers, ranging from small businesses to some of the largest companies in the U.S., including Bank of America (NYSE: BAC ) , which is utilizing Salesforce's software to respond to customer inquiries on Twitter. The state of business today is increasingly moving away from the boxed software systems like those offered at Oracle (Nasdaq: ORCL ) , Microsoft (Nasdaq: MSFT ) , and SAP (NYSE: SAP ) , and is instead moving to a cloud-based platform that doesn't require constant updates and installations. The move won't happen overnight, nor will it be easy, as all three software juggernauts have a legacy customer list that could stretch from here to the moon and back, but the change is happening and Salesforce is at the forefront.
Evidence of Salesforce's success has been overwhelming based on its most recent quarterly results. Total revenue rose 34% to $732 million, with subscription and recurring sales amounting to 94% of total sales. With little worry about where current revenue is coming from, Salesforce is free to focus on expanding its workforce and developing new cloud-based software. Furthermore, the company's contracted (but unbilled) revenue rose to $2.8 billion from $2.7 billion in the previous quarter.
A step above his peers
We've established that Salesforce is able to grow light-years faster than its boxed software peers because of its innovation. Now, let's take a look at the other intangibles that take Marc Benioff from a good leader to a great leader.
To begin with, from the time Benioff began his business through 2009 (a span of a decade), he received just a $10 annual salary. Don't get me wrong -- Benioff isn't hurting for cash, with ownership of 10 million shares of Salesforce stock as of 2010, but he didn't even accept a boost in his salary until 2010. Even as of 2011, his salary is just $900,000 annually with a bonus of 100% allowed only if certain business targets are met. Benioff is eligible to receive option awards as well, but he appears to be a CEO that's worth every penny that he's being paid.
The atmosphere is another big selling point of why Benioff is a great leader at a great company. Not only are employees often compensated very well (company records show nearly 60 applicants for each open position), but Salesforce hasn't lost sight of the importance of its community. In addition to doling out $3 million in charitable contributions in 2012, Salesforce illustrates its giving attitude through its often-emulated "1/1/1" approach. The company donates 1% of its software annually to small non-profit organizations, donates 1% of its employees' time (six paid days) annually for them to perform community service, and donated 1% of its IPO proceeds to the Salesforce Foundation, which gives to various youth-oriented charities.
It's no wonder why Fortune ranked Salesforce the 27th best company to work for in its annual list of the "100 Best Companies to Work For."
Two thumbs up
Aside from the fact that Salesforce also offers on-site day care options, stock options to about half of its employees, and allows some of its employees to telecommute (a really awesome perk also offered by the great company I work for, The Motley Fool), perhaps the factor that puts Salesforce over the edge into "great" status has to do with it hiring 1,064 employees last year. Unemployment levels have stood above 8% for about 3.5 years, and Salesforce is expanding in spite of it, all without forgetting about the welfare of its community or current employees. It's for these reasons that Marc Benioff gets a well-deserved two thumbs up from me!
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Do you have a CEO you'd like to nominate for this prestigious weekly honor? If so, then head on over to the CEO of the Week board and chime in with your fellow Fools on who deserves some praise. If you don't have a nominee yet, don't worry: You can still weigh in on other members' selections.