The movement of investors who are displeased with the salary for Chief Executive Officer Larry Ellison seems to be gaining momentum. Many believe the topic could result in a showdown during the annual meeting on Oct. 31.
Reports indicate that Ellison has received high pay for years. Some shareholders complain that Ellison, who founded the software giant and continues to own one-fourth interest in the company, receives tens of millions of dollars from stock operations annually while the company’s performance has been mixed.
In the last fiscal year, which ended in May, Ellison received compensation totaling $76.9 million. The company’s stock climbed 28 percent during that year before falling 9 percent on June 21 after announcing the second consecutive quarter of flat sales. Even with Ellison’s significant stake in the company, Oracle barely gained investor support for its executive pay practices back in 2011 and those practices suffered defeat the following year in 2012.
Last year’s opponents included BlackRock Inc. and Vanguard Group Inc., Oracle’s largest and third largest shareholders. BlackRock voted against re-electing five Oracle directors, including those who are on the panel overseeing salaries. In a letter sent Wednesday to Bruce R. Chizen, chair of the compensation committee, CtW Investment Group said it will be voting against the compensation practices and will also seek to unseat directors serving on the compensation committee if the company does not set specified limits on the options awards. The group also asked for a new, independent director to oversee the salary aspect.
In a proxy filing last week, Oracle directors stated disappointment regarding the fact that investors rejected the company’s pay practices in a “say-on-say” vote that was non-binding last year. The board noted, “Significant changes to our executive compensation program were not warranted.” Ellison turned down a bonus of $1.2 million for the last year, indicating his decision was based on the company not meeting expectations.
According to reports, since 2008 Ellison’s annual compensation has been in the range of $80 million to almost $100 million. CtW is the investment arm for Change to Win, whose union pension funds hold about 6 million shares of Oracle. At the end of May, the company had about 4.7 billion outstanding shares. Oracle is an American multinational computer technology corporation that is based in Redwood City, Calif. It was founded in 1977. Shares are currently down .18% settling at $33.81.
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