© Reuters. FILE PHOTO: Bret Taylor, Co-CEO of Salesforce, speaks at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France June 15, 2022. REUTERS/Benoit Tessier/File Photo
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(Reuters) – Shares of Salesforce (NYSE:) Inc sank more than 7% before the bell on Thursday after co-CEO Bret Taylor’s sudden exit caught Wall Street off guard and raised concerns about the merit in having two leaders.
His departure after just a year in the role coincides with slowing revenue growth at the software company as it faces stiff competition from the likes of Microsoft (NASDAQ:), a stronger dollar and businesses cutting spending amid red-hot inflation.
At least 17 brokerages slashed their price targets on the stock, with the steepest cut coming from J.P. Morgan analysts who lowered their target by $45 to $200.
Jefferies analysts said the surprise exit indicated that the “co-CEO model is not working with two departures in three years.”
Taylor, a tech veteran who has worked at Facebook (NASDAQ:) parent Meta Platforms as technology chief and served as Twitter Inc (NYSE:)’s chairman, departs San Francisco-based Salesforce after six years, leaving co-founder Marc Benioff as top boss.
Benioff tapped Taylor as co-CEO in 2021, to replace Oracle (NYSE:) executive Keith Block who stepped down from the role just before the pandemic began.
Taylor was involved with Salesforce’s software which helps businesses effectively manage customer interaction, and was a key driving force behind the company’s $27.7 billion takeover of workspace messaging platform Slack Technologies (NYSE:).
He was previously chief operating officer and chief product officer of the company.
“We view this leadership change as a significant blow given his leadership role on product,” Needham analysts said in a note.
Shares of the company, which have lost about 37% so far this year, ended 5.7% higher on Wednesday before Salesforce’s third-quarter earnings report.
