Salesforce announced this evening that Keith Block, the company’s vice chairman and president, would become co-CEO alongside Marc Benioff, the socially minded billionaire who has led the business software company since its founding nearly two decades ago. Benioff, who pioneered not only Salesforce’s now-widely copied business model—selling software as a subscription service—but who also helped propel an industry-wide migration to the cloud, will remain board chairman.
“This announcement really reflects how Salesforce is run today, which is that Keith and I over the last five years have developed a very strong partnership,” Benioff told Fortune from a management meeting in Hawaii. “Of course, we knew each other for quite a bit before that—we both started at Oracle in 1986—so we have known each other forever. And we’ve really grown to be great partners. We wanted to cement that, so we’ve exchanged our vows and now we’re co-CEOs.”
The move is both an eye-popping surprise—and, well, not. In the latter category, Block, who joined Salesforce in 2013 and whom my Fortune colleague Adam Lashinsky once called “the buttoned-down yin to Benioff’s Hawaiian-shirt-wearing yang,” has served as chief operating officer since 2016, helping to drive the company past one revenue milestone after another. Salesforce raced through $10 billion in annual sales in its 2018 fiscal year—a feat it accomplished faster than any other enterprise software company—and is on pace, says Benioff, to pass $13 billion in sales this year.
The company’s annualized five-year revenue growth is four times that of its nearest competitors, SAP (7.7%) and Microsoft (7.2%)—and well ahead of the giant in the field, Oracle, which has grown revenues at a 1.4% pace over these past five years.
“We’ve said we’ll do $23 billion in fiscal year 2022 and we can now just see tremendous trajectory beyond that,” Benioff says. “Cementing Keith and I together as the leadership is really the key to accelerating future growth.”
But such hairy audacious talk shows why this C-suite shuffle is a bit of a shocker, too. Benioff is the IMAX version of the modern chief executive—a larger-than-life 3-D figure who can meld brassy ambition and showmanship into genuine vision…and then pull it off, it appears. The company’s 53-year-old maestro has not only set the company’s prestissimo sales pace, he’s also changed corporate practice with the wave of a wand. When a recent internal review, for instance, revealed that women and men at the tech giant weren’t being paid the same salaries for the same jobs in the same locales, Benioff fixed it by fiat—boosting comp, as needed, until there was equity. In much the same way, he long ago instituted a “1-1-1” policy at the company (Salesforce devotes 1% each of its equity, product, and employee time to charitable efforts).
It’s hard to act that decisively (and perhaps ambitiously) when there are two maestri. In his new role, Block, who is currently a company director, will report to the full board, not to his fellow CEO.
That may be why over the past three decades, only 23 companies in the Fortune 500 have tried this co-CEO structure. At Chipotle, where Montgomery Moran and Steve Ells divvied up the top job, it didn’t work well (or well enough for long), it’s fair to say. And the lackluster growth at Salesforce rival Oracle, where Safra Catz and Mark Hurd share top billing, would suggest that arrangement isn’t ideal either.
But then, there are good reasons to think the Salesforce setup may succeed where others haven’t. For starters, the division of labor appears to be clear from the beginning. “I am going to be focusing on, No. 1, the products, the technology—as well as the culture,” says Benioff, “and Keith is very much focused on the operations and distribution functions of the company. We feel it’s going to naturally align with both of our strengths.”
Second—and perhaps most important for shareholders—the new structure isn’t that new after all. “This is very much already how we are operating the business,” says Benioff. “It’s not bringing someone new into the company. Keith and I have been doing this together for five years in a strong partnership; we have a tremendous management cadence. This is something where we’ve already found our natural synergy. We’re not creating something artificial—we’re just amplifying something that already is.”
Block, for his part, echoes the thought. “Over the last five years this has been our partnership,” he tells Fortune. “We’ve worked very, very closely together, we’ve leveraged each other’s strengths, we advise each other, we trust each other. Marc has been an incredible coach and mentor to me. So, again, this is just an extension of our operating model that we’ve been running with over the last five years and we’ve seen the results in the business.”
Benioff insists as well that this isn’t a half step out the door. “Running the fastest-growing software company in the world is more than a full-time job and that’s why we need two of us to do it,” he says.
Whether investors will see it that way will be clear soon enough. Over the past five years, they’ve bet up Salesforce shares by roughly 26% a year—and the stock is up some 58% in the past 12 months, far surpassing the return of Microsoft and utterly trouncing the stocks of Oracle and SAP. Much of what these investors have been betting on, it would seem, is the man behind the curtain. Now the question is whether two men will be worth as much.
