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Elliott has nominated its own slate of candidates for Salesforce board

Elliott Management, one of five activist investors working inside of Salesforce, has nominated a slate of candidates to the Salesforce board of directors. This move, which was confirmed by sources to TechCrunch, is an indication that negotiations to resolve this without getting to this point have broken down. CNBC was first with this news.

"Elliott has been in constructive, but intense dialogue with the company over the last few weeks, and has nominated a slate of directors to the board of Salesforce," a person familiar with the matter told TechCrunch.

The person indicated that Elliott has been putting maximum pressure on the company through dialogue and through these nominations and the firm will be watching closely to see what happens when Salesforce reports earnings later today.

"And we'll see what happens basically, if and when they announced things that Elliott wants to hear tonight, just improvements to the company and changes overall. And after earnings come out, that is when the firm will kind of figure out next steps."

When a firm nominates its own slate of candidates to the board, the end goal is to get a group of people on the board who can act on behalf of Elliott and implement whatever changes they have in mind. They have not publicly stated exactly what they want, but clearly it involves cutting operations costs and increasing profits, possibly even divesting some of the non-core parts of the business.

So far the company has laid off 10% of its workforce and announced other changes, like cutting its real estate footprint in an effort to slash costs.

Elliott, which announced it was taking a multibillion-dollar stake in the company in January, is not the only activist working inside the firm right now. Starboard Value, ValueAct, Inclusive Capital and Third Point, which became involved just last month, are also high-profile activists investing in Salesforce. Having five activists operating at the same time inside a company like Salesforce is highly unusual, and this may be the first time it's happened.

Patrick Gadson, a partner at the law firm Vinson & Elkins who is in charge of shareholder activism and mergers and acquisitions, says it's hard to know how this fits in with what the other firms may be doing around the board or the demands that they could be making.

"The thing is, all we know is that Elliott submitted nominations, but that doesn’t mean that others haven’t already or aren’t submitting nominations, too. For all we know, Elliott heard or believed that a different shareholder had submitted or was going to submit nominations, and felt they had to balance their hand by submitting nominations of their own." he said.

It's a strange game with one activist in the picture, but the presence of all these firms complicates things all the more.

Salesforce had no comment on the news. It reports earnings this afternoon after the bell.