United States: Salesforce.com CEO gets first 7-figure pay package.

Byline: Mamta03

Salesforce.com Inc. rewarded Chief Executive Marc Benioff with a $7.7 million compensation package in its latest fiscal year, marking the first time that the online software service has paid its founder more than $10 annually in its 10-year history.The details of Benioff's pay were outlined in a proxy statement filed Friday.Most of Benioff's compensation for the year ended in January consisted of 600,000 stock options valued at $7.7 million when they were granted. Benioff, who already owned a 10.9 percent stake in Salesforce.com, had never before received stock options from the San Francisco-based company he started in 1999.Benioff's inaugural stock option award resulted in an eye-popping 77.5 million percent increase from the previous year when his pay was limited to a $10 salary.

Salesforce.com also paid Benioff a $10 salary in its most recent fiscal year.The Associated Press calculates executive pay based on salary, bonuses, incentives, perquisites, above-market returns on deferred compensation and the value of stock options and other awards granted during the year.Benioff, 44, had asked to be paid just $1 or $10 per year since Salesforce.com's inception so Salesforce.com could afford to spend money to attract and retain other employees as it rapidly expanded.It's a sacrifice that Benioff was willing to make because his holdings in Salesforce.com soared in value as the company's profits and sales steadily climbed. The company made $43.2 million on revenue of $1.1 billion in its most recent fiscal year.

Although Salesforce.com's profit nearly doubled last year, its stock price still fell by 49 percent as skittish investors bailed out of the market.Helped by a recent rally, Salesforce.com's stock price has nearly quadrupled its 2002 initial public offering. That has left Benioff with a stake currently worth $554 million.Although Benioff already is wealthy, Salesforce.com's board decided the company had matured to the point where its CEO needed to be paid more like other corporate leaders, according the proxy statement.

The board also wanted to give Benioff more of an incentive to keep working since he has played such an instrumental role in popularizing Saleforce.com's unconventional way of selling software.

Instead of licensing software that is installed on individual computers for a one-time fee, Saleforce.com leases business applications that are accessed over the Internet and makes its money from monthly subscriptions. Once considered kooky, the concept is winning over more corporate customers and Salesforce.com is helping to lead the way with 55,400 customers.Besides granting Benioff the 600,000 stock options, Salesforce.com's board also voted to pay Benioff an annual salary of $750,000 for the current fiscal year. He also will be eligible for a $750,000 bonus each year.The stock options already have gained in value. Saleforces.com's shares ended Friday at $41.41, while the stock options have an exercise price of $25.9

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