Workday, the human resources software giant, recently saw its market capitalization halved from an $80 billion peak, shedding approximately $40 billion in value. This sharp decline has occurred over less than two years, with the company’s stock plummeting 51% from an intraday high of $311.28 to roughly $150 a share. This year alone, the stock is down 29%, reflecting a broader investor skepticism toward software-as-a-service (SaaS) companies grappling with the perceived threat and opportunities presented by artificial intelligence. In response, Workday has turned to a familiar strategy in Silicon Valley: the return of a cofounder to the CEO role.
Aneel Bhusri, who cofounded Workday in 2005, has retaken the helm as CEO, a position he last held two years ago. His return is accompanied by a substantial compensation package totaling $138.8 million, a figure that underscores the challenging environment Workday faces. More than half of this package, $75 million, is contingent on Bhusri achieving undisclosed stock price targets over the next five years. The remaining $60 million is structured as restricted stock, which vests over four years simply by Bhusri remaining with the company, without specific performance metrics attached. This structure suggests an acknowledgement within the company of the deep skepticism Wall Street holds regarding the ability of SaaS firms to navigate the transition into the AI era successfully.
The “AI panic” affecting enterprise software stocks has not been isolated to Workday. Other prominent SaaS companies, including Salesforce, ServiceNow, and HubSpot, have also experienced double-digit declines in their stock prices. Bhusri himself has seen a significant personal impact; his ownership stake, which exceeded 8 million shares, has decreased in value from an all-time high of $2.6 billion to approximately $1.3 billion. This represents a paper wealth reduction of about $1.3 billion in under two years. Despite the financial headwinds, Bhusri has expressed optimism, stating in a LinkedIn post following his appointment, “AI is reshaping how work gets done and represents an even bigger transformation than the shift to cloud 20 years ago. Just as we helped redefine enterprise software when we founded Workday, I believe we can once again lead the way in this AI era.”
Bhusri’s history with Workday includes multiple leadership roles since its inception with cofounder Dave Duffield. He served as co-CEO with Duffield starting in 2009, then as sole CEO, and later shared the role again with Luciano “Chano” Fernández in 2020. Most recently, he transitioned to executive chair in February 2024, only to return as CEO and chairman after Carl Eschenbach, who had been appointed co-CEO in late 2022, departed. Eschenbach’s severance package included approximately $3.6 million and accelerated vesting on nearly 140,000 shares of restricted stock units. An independent assessment of his departure terms suggested he felt pressured to leave.
Workday’s operational structure also places significant control in the hands of its founders. The company operates with a dual-class share structure where Class A shares carry one vote, while Class B shares hold ten votes each. Through their Class B share ownership and a voting rights agreement dating back to Workday’s 2012 IPO, Bhusri and Duffield, along with their affiliates, command 68% of the company’s voting power. This concentrated control provides Bhusri with substantial authority to implement strategic changes as he sees fit. The dual-class structure is scheduled to expire in October 2032, a year after the window for Bhusri’s performance-based compensation closes in early 2031, granting him a defined period to influence the company’s trajectory.
The company has seen revenue growth, reporting $8.4 billion in total revenue for fiscal 2025, a 16% increase year-over-year. However, this growth has slowed, with subscription revenue growth decelerating from 19% in fiscal 2024 to 17% in fiscal 2025, and 15% in the most recent quarter. Workday has also undergone multiple rounds of layoffs, citing realignment and a shift towards AI as reasons for workforce reductions, including a 7.5% cut last February that incurred $172 million in charges. The day Bhusri’s return was announced, the stock dropped more than 6%, signaling continued investor anxiety about the company’s ability to adapt to the evolving technological landscape. Workday’s future success now heavily depends on Bhusri’s ability to leverage the company’s two decades of data and process history to deliver enterprise-grade intelligence, thereby proving that a founder’s return can indeed steer the ship through these turbulent waters.
