2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 378 COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED) A description of our key pay elements, the applicable performance measures and the rationale for each element are set forth in the following table: Pay Component FY 2018 Metric Rationale Performance-Based Restricted Stock Units Relative TSR Restricted Stock Units Stock Price Stock Price Stock Options Base Salary Annual Performance-Based Cash Bonus Revenue Non-GAAP Income from Operations Operating Cash Flow Establishes direct alignment with Company and stock price performance and the interests of stockholders CEO LTI mix (PRSUs and stock options) establishes even greater emphasis on Company performance Drives achievement of key annual corporate performance goals that align with our strategy and that are used by investors to evaluate our financial performance Provides compensation for day- to-day responsibilities for all employees – Base Salary Long- Term Equity Incentives Annual Cash Incentive Base Salaries We believe we must offer competitive base salaries to attract, motivate and retain all employees, including our executives. The Compensation Committee has generally set the base salaries for our executives, including the NEOs other than our CEO, based on three primary factors: • a comparison to the base salaries paid by the companies in our compensation peer group; • the overall compensation that each executive may potentially receive during his or her employment with us; and • internal parity considerations with respect to the base salaries of other executives who are comparably situated in terms of reporting structure and level of responsibility. In the second half of fiscal 2017, the Compensation Committee conducted a review of our executive compensation program for purposes of determining the base salaries and bonus opportunity for our executives for fiscal 2018, taking into account the above factors as well as overall Company and individual performance and the roles and responsibilities of each of our executives. For fiscal 2018, the Compensation Committee set base salaries for the NEOs at the levels shown below, maintaining each at the fiscal 2017 level. Named Executive Officer Fiscal 2018 Base Salary Change from Fiscal 2017 Mr. Benioff $1,550,000 No change Mr. Hawkins $ 750,000 No change Mr. Block $1,150,000 No change Mr. Harris $ 900,000 No change Mr. Dayon $ 900,000 No change Performance-Based Cash Bonuses We provide annual performance-based cash incentive awards linked to achievement against certain corporate performance goals under our broad-based Kokua Bonus Plan. The Compensation Committee believes that the annual performance metrics used in the bonus plan contribute to driving long-term stockholder value, play an important role in influencing executive performance and are an important component of our compensation program to help attract, motivate and retain our executives and other employees. Under the Kokua Bonus Plan, the Compensation Committee establishes three bonus pool targets: one for our executive officers, including the NEOs, a second for non-executive officers at the Vice President level and above, and a third for employees at the level of Senior Director and below. Each pool may be funded based on achievement of certain Company performance goals pre-established by the Committee for each of the three groups. The performance goals applicable to executive officers in fiscal 2018 are discussed in more detail below. Typically, after the first half of the fiscal year, we pay 25% of the full target bonus amount, and after the end of the fiscal year, we pay the remaining amount. The remaining amount is determined based on the level of achievement against the applicable Company performance goals, and may also take into account individual performance. The Compensation Committee administers the Kokua Bonus Plan with respect to our executive officers and determines the amounts of any awards under this plan to our executive officers. The Committee may increase or decrease awards under this plan in its discretion based on factors the Committee deems appropriate, PayComponentFY2018MetricRationaleLong-TermEquityIncentivesAnnualCashIncentiveBaseSalaryPerformance-BasedRestrictedStockUnitsRestrictedStockUnitsStockOptionsAnnualPerformance-BasedCashBonusRelativeTSRStockPriceStockPriceRevenueOperatingCashFlowNon-GAAPIncomefromOperationsBaseSalaryEstablishesdirectalignmentwithCompanyandstockpriceperformanceandtheinterestsofstockholders—CEOLTImix(PRSUsandstockoptions)establishesevengreateremphasisonCompanyperformanceDrivesachievementofkeyannualcorporateperformancegoalsthatalignwithourstrategyandthatareusedbyinvestorstoevaluateourfinancialperformanceProvidescompensationforday-to-dayresponsibilitiesforallemployees 2018 Proxy Statement 25 Total of 04 pages in section SALESFORCE.COM, INC.