Salesforce quietly raised its dividend to pacify activist funds

Core Viewpoint - Salesforce is responding to activist investors by increasing its quarterly dividend, indicating a shift towards prioritizing shareholder returns over speculative acquisitions [1][3]. Group 1: Activist Investor Influence - Activist investors have been pressuring Salesforce since late 2022 for higher capital returns and operational efficiency [2]. - Starboard Value, an activist hedge fund, significantly increased its stake in Salesforce by nearly 50% in Q2 of 2025, indicating ongoing influence [2][7]. - Despite other activists exiting after strong 2023 results, Starboard remained invested, suggesting a belief in further potential for shareholder value enhancement [2][7]. Group 2: Dividend Metrics and Financial Outlook - Salesforce increased its quarterly dividend to $0.416 per share, reflecting a commitment to shareholder returns [1][3]. - Analysts project that the dividend payout ratio will improve from 12% in fiscal 2025 to 10% in 2030, indicating a conservative approach with room for growth [4]. - The company currently distributes less than 15% of its earnings as dividends, allowing for substantial flexibility in increasing payouts while investing in AI [5][6]. Group 3: Financial Performance and Projections - Revenue is projected to grow from $37.9 billion to $59.75 billion, with adjusted earnings per share expected to rise from $10.20 to $20.1 [6]. - Free cash flow is anticipated to increase from $12.43 billion to $20.53 billion, supporting the company's financial health [6]. - The annual dividend per share is expected to rise from $1.60 to $2.18, with a current dividend yield of 0.89% [6].