C3.ai is down 76%. Will shareholders push back on Siebel and the board?

Annual meeting: Monday, Oct. 26, 2026 · Meeting page

Shares of C3.ai (AI) have lost three-quarters of their value in five years. Its founder, Tom Siebel, is back in charge. Next Monday, shareholders vote on executive pay, three directors and six more years of automatic additions to the pool of shares for stock awards.

They can’t outvote him. Siebel controls 48.9% of the vote, enough at normal turnout to carry any item on this ballot he supports. The question is whether everyone else pushes back anyway.

The stock has lost three-quarters of its value

Siebel sold his first company, Siebel Systems, to Oracle in 2006 for about $5.85 billion. He founded C3.ai in 2009 and took it public in December 2020 at $42 a share. The shares closed at $11.28 on Oct. 19, and over five years they have fallen behind both the market and the software companies C3.ai measures its pay against.

Siebel stepped aside as chief executive in September 2025 for health reasons. In the fiscal year to April, revenue fell 36%, gross margin fell to 31% from 61%, the net loss grew to $470.4 million and a February restructuring cut 26% of the workforce. In May the board gave him the job back. He returned to a smaller company, and on Monday shareholders vote on what its leaders were paid during that year.

“The plan is working,” Siebel said in September. In the quarter to July, C3.ai reported positive free cash flow of $2.1 million, bookings up 73% from the prior quarter, with no dollar figure given, and $651 million of cash. Revenue edged up from the prior quarter but was still 25% lower than a year earlier. The positive cash flow came from working capital, about half of it customers paying in advance. Without it, operations used about $31 million. And most of the $76 million rise in cash was the $69 million Siebel paid to buy shares through options. Full-year guidance of $210 million to $240 million implies revenue falls again.

Stock pay now costs more than the company’s revenue

C3.ai pays its people heavily in stock, and shareholders bear the cost: every new share handed out shrinks everyone else’s slice. The average share count rose 9% last year. Stock awards nearly doubled in fiscal 2023, to $217 million, then held roughly steady while revenue grew. Last fiscal year revenue fell back and stock awards rose again, to $264 million, more than the $250 million the company took in. The quarter to July looked the same: $59 million of stock awards against $52 million of revenue.

At the top, most of that stock is paid for staying, with no business goals attached. Stephen Ehikian, who ran C3.ai between Siebel’s two stints, was awarded $36.2 million for eight months, almost all of it in hiring awards, and his first-year bonus of $1 million was “guaranteed,” the 8-K announcing his hire said.

In December, as executive chairman, Siebel received $23 million in awards he keeps by staying: half in shares, half in options that pay off only above $17.51, about 55% over the Oct. 19 close. In February, at his request, his salary went to zero. His one award with stock-price hurdles, from 2022, cleared all three of its targets ($20, $23 and $26) in 2023 and has paid him 1.42 million shares.

The board has kept the awards steady as the stock fell: about $23 million in stock and options in each of the last three years. At a lower price, the same dollars buy more shares. His December option grant covered 1,133,474 shares, against 662,489 two years earlier.

Insiders have sold $282 million of stock. One director bought.

In the three years to Oct. 19, C3.ai’s directors and officers sold $282 million of its stock and bought $0.3 million on the market.

Most of the selling is Siebel’s: $226 million, almost all under a trading plan he set up in September 2024, a schedule of sales fixed in advance. He has sold about $31 million since returning in May, mostly under the plan. About $44 million of all insider sales went to cover taxes.

He has also added to his stake. In June he paid about $69 million to buy 6.17 million shares through options that did not expire until 2030, more than twice what he has sold since May, and kept them. Only one director or officer has bought on the market: Jim Snabe, who is on leave and not standing. Three directors, Bruce Sewell, KR Sridhar and Alan Murray, own options but no shares.

Siebel’s votes and the board’s rules mean holders can protest, but likely can’t change the outcome

Siebel controls 48.9% of the vote, mostly through founder shares that carry 50 votes each. Many holders don’t vote: at last year’s turnout, his stake would be about 60% of the votes present, a majority on its own. Founder shares held by others, whose owners aren’t disclosed, carry another 6.4%.

The board’s rules add more protection:

• Staggered terms: only a third of the directors stand each year.
• Uncontested seats: with no rival candidate, withheld votes cannot unseat anyone.
• Removal only for cause: not for poor results, and only with two-thirds of the vote.
• No special meetings: shareholders cannot call one or act in writing between meetings.
• Advisory pay vote: the board doesn’t have to follow it.
• Mergers: a deal needs a majority of all votes outstanding, so in practice none passes without Siebel.

The control is personal. The founder shares convert to ordinary one-vote shares six months after Siebel stops serving the company as an officer, director, employee or consultant, and in any case by December 2040. Holders of a majority of the founder shares can also convert all of them sooner, and Siebel controls about 88%.

The board has also grown while the stock fell: 12 directors, up from nine in 2023, where technology companies of similar size typically have eight. Two of this year’s three nominees, Michael McCaffery, the lead independent director, and Stephen Ward, who chairs the pay committee, have served since 2009, the year Siebel founded the company.

Outside Siebel, more votes went against pay than for it last year

Last year’s say-on-pay vote, the yearly advisory vote on executive pay, passed with 86.2%. Take out Siebel’s own votes and support was about 48%, and about 50% the year before, by our estimate. Outside his block, votes for pay have held at about 27 million a year since 2023, while votes against rose from 8 million to 30 million.

Most outside votes go uncast: fewer than four in ten were cast on pay last year.

Those that are cast include the largest fund families, and their opposition isn’t new. Funds run by Vanguard and State Street have voted against C3.ai’s pay every year since at least 2022, and BlackRock’s mostly against, though the three vote against pay at only about 2% to 6% of their other holdings. What changed is how many of their shares were voted: Vanguard funds voted 12.7 million shares against last year, up from 0.6 million in 2023, when most of their stake was lent out. Fidelity, Schwab, T. Rowe Price and Invesco funds also voted against in 2024 and 2025. “Pay is not aligned with performance and peers,” BlackRock said both years.

Directors draw less opposition. When Ward and McCaffery last stood, in 2023, outside support was about 81% for Ward and 88% for McCaffery, by our estimate. Since then Sewell and Sridhar, both on the pay committee, each drew about 70% outside Siebel.

Two public pension funds, CalSTRS and the Illinois State Board of Investment, have already published their votes for the 2026 shareholder meeting: against say on pay and the equity plan, and withholding from McCaffery and Ward.

Our evaluation points to another low say-on-pay result outside Siebel’s block, and to low support for at least one director.

The stock-plan vote decides the next 10 million shares, and the years after 2030

The plan for stock awards already grows automatically each May by up to 7% of outstanding shares, through 2030, and the board has taken the full 7% in each of the last three years. That continues whatever the vote: four more increases, up to about 45 million shares at today’s count.

The amendment adds 10 million shares now to the 10.9 million still available; without them, the board says, the reserve will not last until next year’s meeting. It also extends the automatic increases six more years, to 2036, room for up to about 67 million more shares at today’s count.

The board’s actual grants, net of forfeitures, came to 9.1% of the average share count last fiscal year and 8.9% the year before, by the company’s own measure, up from 3.4% in fiscal 2024. The plan also lets the board lower the exercise price of outstanding options without a shareholder vote.

The ballot, item by item

Say on pay (Item 2)

After last year’s vote, the proxy describes no outreach to shareholders and no changes to pay. The bonus plan has no disclosed goals, and Siebel’s pay for this year “is yet to be determined.”

Our read: in a year revenue fell by more than a third, the board gave its executive chairman $23 million in awards he keeps by staying and guaranteed a new chief executive’s bonus. That is not pay tied to results. The board had to hire quickly, and half of Siebel’s December grant is options that pay off only if the stock rises about 55%. What we’d like to see: performance goals on his next grant.

Directors (Item 1)

John Dwyer, the third nominee, is a former partner at the law firm Cooley who joined the board in August. Condoleezza Rice, a director since 2009, is not standing, and the board drops to 11.

Our read: Ward has chaired the pay committee while outside support for pay fell to about half, and McCaffery leads the independent directors of a board shareholders cannot easily reshape. That record weighs against both, though each owns stock: about 550,000 shares for Ward and 990,000 for McCaffery. Dwyer is new. What we’d like to see: a smaller board, a date to end the staggered terms and directors buying stock with their own money.

The equity plan (Item 4)

The board says it needs equity to attract and keep talent, that the current reserve will not last, and that it can set each year’s increase below 7%.

Our read: at a company whose stock awards cost more than its revenue, six more years of automatic increases asks for more dilution than the record supports. What we’d like to see: a fixed reserve sized to the next two or three years of grants.

The auditor (Item 3)

Shareholders also vote to ratify Deloitte, the auditor since 2018; it drew 99% last year.

What to watch

• Oct. 26
  The annual meeting, online. C3.ai must report the results in an 8-K within four business days; the tallies will show how far outside support moved.
• Siebel’s pay
  His pay for the current year is not yet set. Last year’s grant came in December.
• Early December
  Second-quarter results, against guidance of $51 million to $55 million in revenue.
• Sale talk
  Reuters reported late last year, citing people familiar with the matter, that C3.ai was exploring a sale, and The Information reported merger talks with Automation Anywhere in January. No deal has been announced.
• Health-disclosure suit
  A shareholder suit claims the company misled investors about Siebel’s health. A judge dismissed it in full in July; the plaintiff filed a new complaint in August, and C3.ai moved on Sept. 8 to dismiss it again.

Sources: C3.ai’s 2026 proxy statement and earlier proxies, its 10-K, 10-Q and 8-K filings, its IPO prospectus, and Form 4 filings; Boardroom Alpha data on vote results, fund vote reports and 13F holdings; votes investors published before the meeting; Reuters and The Information. Pay peers: the 15 companies in the proxy’s peer group (Appian, nCino, Snowflake, Datadog, PagerDuty, Sprinklr, DocuSign, Palantir, Twilio, JFrog, Pegasystems, Workday, MongoDB, ServiceNow, Yext). Fund-family stakes are the votes on shares their funds held at June 30 (13F filings); the proxy’s figures for Vanguard and BlackRock are lower because they come from earlier ownership reports that cover only some of each firm’s managers. Returns run to the Oct. 19, 2026 close. Boardroom Alpha is an independent research and analytics company and does not invest. This brief is for information only and is not investment advice or a proxy solicitation.