SAN FRANCISCO — In a move reflecting the shifting tides of the tech industry, Salesforce has announced it will not be granting base salary raises to employees at the Director level and above this year.
According to an internal memo from the company’s HR team, the “merit increase” budget is being strictly prioritized for Senior Managers (Grade 8) and below. This news comes as the SaaS giant grapples with a challenging year, with stock prices down 37% amid broader fears of an “AI-driven SaaSpocalypse.”
What High-Level Employees Get Instead
While base salaries are frozen for leadership, Salesforce isn’t leaving its top performers empty-handed. The company is pivoting toward a performance-heavy compensation model:
-
Boosted Stock Grants: 10% more Directors and Senior Directors will receive stock grants this year. For those rated “Highly Successful” or “Exceptional,” these grants will be 20% to 40% larger than average.
-
Fully Funded Bonuses: The bonus pool is funded at 103%. Most eligible top-level employees will receive 100% of their target bonus, while elite performers could see between 115% and 140%.
-
The Goal: The company describes this as an “investment in performance and long-term growth,” tying executive wealth directly to the company’s stock recovery.
Is AI the Culprit?
The decision arrives as the tech world debates whether AI agents are making traditional SaaS (Software-as-a-Service) models obsolete.
| Perspective | Stance |
| The Market | Skeptical; Salesforce stock has dropped 37% over the last 12 months. |
| CEO Marc Benioff | Dismissive of the “SaaSpocalypse,” famously stating that SaaS is actually being “eaten by the SaaS-quatch” (meaning SaaS is getting bigger and better via AI agents). |
| Industry Context | Epic Games recently laid off 1,000 staff, though CEO Tim Sweeney blamed a dip in Fortnite demand rather than AI. |
Key Dates for Employees
Performance reviews are set to conclude by the end of March 2026, at which point individual contributors and managers will receive their specific compensation and stock grant details.
