We understand why Salesforce's Benioff went to such great lengths to keep co-CEO Taylor

Published Thu, Dec 1 202212:36 PM EST

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

Salesforce 's (CRM) Marc Benioff tried "everything he could" to convince Bret Taylor to remain at the enterprise software maker as co-CEO, Jim Cramer said Thursday, but those efforts were unsuccessful. The roughly 10% decline in shares can be largely attributed to the potential risk around such a key player leaving the organization, but it does not change our long-term view on the company. Taylor is leaving Club holding Salesforce on Jan. 31, the company disclosed Wednesday night alongside what we considered good fiscal 2023 third-quarter earnings and revenue . Benioff, who co-founded Salesforce more than two decades ago, will become the sole CEO, again. He's also chairman of the board. "Marc did everything he could to keep [Taylor], and he did a great job, but the opportunities were great [for Taylor]," Jim said Thursday morning, drawing on his impressions from talking to Benioff following the Taylor exit announcement. Jim added that "Marc was entirely broken up" about it. In Wednesday's "Mad Money" interview, Benioff called Taylor's decision to leave "a gut punch." Reflecting on that conversation one day later, Jim said Benioff was "extremely emotional" before the interview began, calling it a "hold-back-tears moment." The news of Taylor's impending departure came exactly one year after Salesforce announced Taylor would become co-CEO next to Benioff, a renowned figure in Silicon Valley who has been in a similar position before. Jim said Taylor is definitely leaving for "different reasons" than Keith Block, who served as Salesforce co-CEO alongside Benioff from August 2018 to February 2020. "I think there are people, justifiably, who will say, 'Wait a second. Maybe you can't work with Marc.' I am telling you point-blank that that's untrue," Jim said. "I spent a lot of time with Bret when I was out at Dreamforce [in September]. He and Marc are very, very close, but the opportunities were too great." Taylor entered the fold at Salesforce six years ago after the company acquired his productivity software startup Quip. Prior to that, he co-created Google Maps and later founded a startup that was bought by Facebook, now called Meta Platforms (META). On Wednesday's earnings call, Taylor said he felt it was "the right time for me to return to my entrepreneurial roots, particularly given the technology landscape and the economy going through such tectonic shifts." Taylor's announcement follows a busy few months for him outside of Salesforce. He was the chairman of Twitter's board of directors during the Elon Musk acquisition saga. Despite Musk's attempts to get out of the deal , the billionaire businessman ultimately closed at the originally agreed upon price of $54.20 per share , a big win for the company's investors because market conditions had soured considerably since the agreement was struck in the spring . "[Taylor] beat Musk," Jim said. "You have this very quiet, steadfast man who told me, when everyone thought the [$54.20] was out of the question, 'Oh, he's paying,'" Jim added. "When everyone was saying, 'fear Musk,' he was like who is Musk?" Bottom line Taylor's decision to leave Salesforce is for sure a surprise, so we're not shocked to see the market express its disappointment in the news. However, we're not changing our big-picture thinking toward the company. At the same time, the Club recognizes it's been a tough year for Salesforce shares as growth-oriented tech companies fell out of favor on the Street. We've grown more cautious in the near term as a result. Salesforce's quarterly results weren't perfect, to be sure, but overall we thought they were solid. We especially like that Salesforce management seems to be sharpening its focus on expanding profitability. (Jim Cramer's Charitable Trust is long CRM, META and GOOGL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Salesforce's Bret Taylor at Dreamforce 2017

Salesforce