I have something just really important for you today, but it also happens to be entertaining
and I think [inaudible]
most of you are going to enjoy this. There's a company called Salesforce. We've used this
company off and on to manage our ad sales process. It's a CRM, a customer relationship
management tool, and it doesn't even really matter what that is, but their CEO is a guy
named Mark Benioff and he's a smart guy. He has some really progressive ideas, at least
in the context of someone who runs a huge corporation and happens to be a multibillionaire,
reportedly worth more than six point $4 billion. About two thirds of that in Salesforce company
stock. He has a narrative about capitalism, about the role of big business that is pretty
different from what a lot of other big corporate CEOs have and he's been talking for a while
now about a new capitalism, a more social capitalism, capitalism without going off the
rails, so to speak, a capitalism that accounts for the wellbeing, not just of the shareholders
as is often the case, but also of stakeholders which include all employees, customers, the
environment.
Capitalism for social change rather than capitalism for preventing social change. And he was interviewed
on CNBC by the usual suspects, including this guy named Jim Cramer, who's known in the investment
world and he turned their world visibly upside down and they didn't know what to do with
him. So we're going to look at some clips. This is a 12 minute interview in total, which
you can find online. I'm going to play a few clips for you. And throughout this you might
notice there will be times where the camera is a wide shot. And you'll notice Jim Cramer
just looking exasperated with Mark Benioff, who's not going to be bullied by the sort
of vulture capitalist mentality into saying anything other than what Mark Benioff believes.
And he happens to believe many of the right things. And you'll see Jim Cramer going on
him about are we really going to break up big tech, which Elizabeth Warren has been
suggesting. And Mark Benioff says, yeah, yeah we should.
Last night I heard capitalism under attack as I never heard it before. And it made me
think that if it's dead, there are two visions. There's your vision, which is to resurrect
it and make business the greatest Pratt platform, social change, and there's another vision
which is that the government has to step in because the billionaires are screwed up so
badly. Tell us how to get that. Not that blow. They're probably right actually, but we do.
We need a new capitalism. We need a capitalism that's more fair, more equitable, more sustainable
capitalism, capitalism that
values not just all shareholders but also all stake holders and if we can put those
things together, I think it can be a new capitalism to be very exciting for everybody.
I I do worry Mark that in the, in the vacuum, in the vacuum of what you're talking about,
what I heard last night about big tech having to be broken up simply because it's got tremendous
power, not even at the power's being used unwisely, but where are you when it comes
down to breaking up Facebook, waking up Amazon, breaking up alphabet. Aren't these great American
companies that hire a lot of people?
Well, you know how I feel gym. Facebook is the new cigarettes. It's addictive. Bad for
you, Jim. Thereafter, your kids set's not fanned off, changed the political ads that
are going on. There's, you know, not a commitment to trust and truth and now they're co-mingling
the data of all of their acquisitions. Facebook probably should be broken up because they're
using these assets in a way to further manipulate even more people. I think that there needs
to be change. It hasn't happened fast enough.
Absolutely correct. He's a huge beneficiary of the system that we have, but he's saying
plain and simple that the system still has to be changed and Kramer pushes back because
he just doesn't, I mean he doesn't like it. He can't believe that a multibillionaire,
a huge corporate CEO is saying this stuff and Mark Benioff here to the disbelief of
the people on the panel explaining that Salesforce has returned great value to investors. Investors
in Salesforce have done really well financially, but that they're also providing a return to
stakeholders and focusing on the environment and more.
Mark, you've been talking for some time now about, and that's the new capitalism gym,
which is that, look, we have to actually value all stakeholders. We are. Look at all shit.
We'll share with the earlier [inaudible] are important and we've had a great shareholder
return at Salesforce. I heard you earlier mentioned at 3500% since I was first year
right there, right there in 2004 if you bought our stock, well that's a 3500% return, but
I had a great stakeholder return too. During that same period, we've given over $300 million
for grants, 4 million hours of volunteerism, 40,000 nonprofits and NGOs for free running
on our service, and we're a net zero company, be fully renewable by 2025 that's our stakeholder
return. We issue a stakeholder report, so we have a shareholder return and a shareholder
report. We have a stakeholder return, a stakeholder report, and I think that's something the sec
can do by the way. They could put, you know I mentioned that in my op ed.
What a concept, right? I mean blowing their minds. You can see that these people, they're
looking at each other, they're smirking, they're rolling their eyes. They can't believe that
a company that makes money also treats the planet in a more responsible way and it treats
stakeholders as an important part of the considerations that are made when you make business decisions.
Now, disclaimer, time. I'm not saying Mark Benioff is perfect. I'm not saying Salesforce
is the perfect company and there are no negative externalities to what Salesforce does there
well may be, but the way in which these simple socially democratic ideas are coming from
a multibillionaire CEO and triggering Jim Kramer is just delightful. Watch Kramer in
this next clip, if you're watching, if you're just listening, I encourage you to find the
full interview online while David Faber takes a turn asking some questions of Mark Benioff.
Jim Cramer looks perplexed as Mark Benioff explains, Hey, there are actually CEOs all
over the world being more thoughtful about how we run our businesses.
What are the metrics? How do you measure this given it is growing in importance. We hear
about it all the time now from real money, not just sort of a, you know, a broad sense
that there's interest in it, but people actually who want to put dollars behind them. Well,
my peers certainly do. When I talked to the largest CEOs in the world yesterday, I was
in Munich, Germany with one of the largest company in Germany with their CEO. They have
a major program into place just as we do just as many others do. I was in London on Monday.
I see the same thing throughout Europe. It's probably happening faster there. The United
nations sustainable development goals are the 17 core initiatives that are laid out
by the UN of how we're trying to improve the state of the world and companies should have
to report how they're doing against those goals that that just makes complete sense
to me.
If we're not all into improving the state of the world, then what are we all into? Did
you believe the business round table when they changed their statement or do you think
as some do that it was really more than just kind of talked to get on the right side of
the politics of it? The business round table has said now exactly the same thing. The purpose
of the corporation is to value stakeholders as important as shareholders that the traditional
Milton Friedman concept that that it's only about the shareholder, that the CEO's only
job is to maximize shareholder return is dead.
Wow. Oversight regulation working together. Milton Friedman's teachings are obsolete.
It's not only about maximizing shareholder value. Socialism, no, this is not socialism.
This is social democracy. It's social capitalism. Mark Benioff doesn't say big corporations
shouldn't exist. Mark Benioff doesn't say billionaires like him shouldn't exist. He
is saying that we can do capitalism in a different way, still make money, but consider all stakeholders.
Consider the environment. This is CNBC. Mind you, this is a billionaire tech CEO and you'll
see the wide shot again. Show Jim Kramer who was just laughing to himself. He can't believe
this is happening on CNBC. He's here.
We need to value all stakeholders and all shareholders. Now, when I say stakeholders,
what do I mean? I mean our employees, our customers, our partners, you know, but I also
mean like I'm in from San Francisco. We have a horrible homeless problem there. The homeless
are a stakeholder for me. That's why I was fighting for proposition C, a tax on ourself
because we have to get to, we have to deal with the homeless situation in San Francisco
as the largest employer in San Francisco. I'm not focused on that if they aren't one
of my key stakeholders than what is,
that was the question I had because at tech crunch you said if your orientation is just
about making money, you're not going to hang out for very long. As a CEO or founder of
the company. My question was, if you don't, then what you, your board fires you, your
sales drop, you know you can't hire anybody. What is the consequence of running a foul
of that?
Well, you can see that in my industry, which is for CEOs who do not take this approach,
they are really at risk and they can be extremely vulnerable, especially during economic times
that become turbulent,
stunning, right? Who could have imagined? You could be a corporate, a CEO or a big corporation
and care about other people. Then Benioff brings up climate change, which is just like,
it's lost on these folks and you'll see them all smirk at each other.
What am I doing wrong? I need to be thinking about the public schools, the homeless. Oh,
and I also need to be thinking about not just profit, but planet. I need to be thinking
about the planet. What are my emissions? You know, that is part of the new world we're
in. That gets back to David's question on what about the sustainable development goals
in the UN? That is the connectivity. That's the map. We can lay it out. Then we can measure.
If we can measure it, we can have impact. That's our one that we all know that we understand
how to do that. Jim, I know has to finish, but there's some shareholders right now or
listening to you who probably like what are you talking about? You seem to be abandoning
what I would want, which is just you focus on improving the profitability of this company.
You worry that you freak some of these people out and what do they say to you when they
hear that if they're not onboard with your view, this is how to improve the profitability
of a company. This is how to make a great company. This is how to have a company that
customers want to do business with, that attracts employees, that develops partnerships, that
integrates local communities, that saves the planet. This is about having a great company
and look at our company. Look at our financial return since we went public right here in
2004 look at how we rank against everyone else over the last same 15 year period. I'm
sure that you'll see we're in the very top echelon and I'll tell you how we did it. We
valued stakeholders as much as shareholders.
Consider that you improve the company by caring about the world in which the company exists.
By caring about the people who could be employees or potential employees, customers of the company,
just people who exist on this planet. Shocking, right? And half of what makes this great is
the content of what Mark Benioff is saying. The other half is just how triggered Jim Cramer
is and his incredulous reactions to what is being said. Really great stuff. And you know,
I mean, listen, I, as I say, don't idolize politicians, don't idolize big corporate CEOs.
He's still the CEO of a huge corporation that I'm sure does things that we would all disagree
with. But this was just a delightful wake up call and taking it right to the horse's
mouth. Check out the full interview online. It's only about 12 or 13 minutes. Let me know
what you think about it.