Oracle Shareholders Think Larry Ellison, Other Execs Are Overpaid


Oracle shareholders voted against the compensation packages of CEO Larry Ellison and other Oracle executives on Thursday. But against the advice of some investment advisory firms, shareholders voted to re-elect all 11 of Oracle's current board directors.

In a non-binding vote during Oracle's annual meeting with shareholders, more than 2 billion shares were voted against Oracle's "Say-On-Pay" measure, while close to 1.6 billion were cast in support, as reported by The New York Times Thursday.

However, Ellison owns about 1.1 billion shares, so these results were likely skewed in favor of keeping Oracle's executive pay policies unchanged, The New York Times reported.

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The vote shows that shareholders want Oracle to either reign in executive pay or do a better job of disclosing how it's calculated, Michael Pryce-Jones, an analyst at the Change To Win Investment Group, a shareholder activist organization that's leading the effort to change Oracle's executive pay policies, said in an interview.

CtW estimates that 85 percent of shares that aren't held by Oracle executives and board directors voted against the Say-On-Pay measure. Investment advisory firms ISS and Glass Lewis have also been urging shareholders not to re-elect several of Oracle's current board members due to their inaction on the executive compensation issue.

Pryce-Jones said he thinks Oracle needs new directors given the board's repeated failure to address longstanding investor concerns over Ellison's pay. One of two new directors could be enough to change the current impasse, he said.

"Oracle has to reform its practices at some point or we'll see these shareholder votes continue to climb," Pryce-Jones told CRN. "Some of the Oracle directors sit on other boards. At the end of the day, they have to recognize that their credibility is on the line."

Oracle couldn't be reached for comment. Ellison was paid $78.4 million for Oracle's 2013 fiscal year and $96.2 million the year before, according to documents filed with the Securities and Exchange Commission.

CtW also wants Oracle to reveal the total number of votes shareholders cast in re-electing Oracle's current board directors. Pryce-Jones said these numbers will show whether shareholder frustration over executive pay is growing, a scenario he deems likely given that this is the second consecutive year Say-On-Pay has been voted down.

PUBLISHED NOV. 1, 2013