Oracle's Larry Ellison, one of the world’s richest men and best-paid CEOs in the US, is getting his pay cut by more than half.
The database giant's chief executive has been awarded just 3 million stock options by its compensation committee in its annual review process.
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That’s down from 7 million the year before and every year since 2010. Details of the new award were revealed in Oracle SEC filings at the end of July.
Ellison depends on options since he cut his official salary to $1 a year in 2010 – the year his options pumped up to 7 million from the previous year’s 1.7 million.
Oracle’s chief executive made $151.43m from options exercised in 2013.
Ellison is calculated to have earned $960m in compensation thanks to his stock allocations over the past five years.
The good news for Ellison is he isn’t the only one taking a bath – Oracle president Safra Catz has also seen her Oracle stock allocation sliced.
Oracle’s compensation committee has awarded Catz 2.25 million in standard options, down from 5 million the year before.
Catz’s allocation is more volatile, though, and – unlike that of Ellison – fluctuates from year to year.
There was no word from Oracle on the reason for the change, but the shake-up comes hard on the heels of a difficult year for Ellison’s company.
Oracle has missed Wall St’s earnings expectations in three of the four quarters. Revenue from sales of new products and overall net income has slowed down.
The company has suffered from slow corporate IT spending and the rise of new rivals while it has tried to spin up the hardware business it bought from Sun Microsystems as well as pushing its cloud offerings.
Against this backdrop, Oracle’s shareholders have been increasingly resistant to Ellison’s award, which had made him the best-paid CEO in the US.
Ellison is Oracle’s single largest shareholder.
The rank and file have been revolting against size of their leader's package since 2008. A “say on pay” was proposed at company’s annual meetings in 2008 and in 2012, to no avail.
Shareholders last year rejected the pay packages of Ellison and other top Oracle executives at the annual shareholder meeting in October, saying their compensation was out of sync with the company’s performance.
Oracle was forced to defend Ellison’s allocation in a letter.
As the company’s fortunes and performance have fluctuated, though, it seems either the compensation committee or Ellison decided change was unavoidable.
Ellison is one of the world’s richest people – third behind Bill Gates and Warren Buffett, according to Forbes, on $49.6bn. He has used his wealth to take a stake in NetSuite, buy estates, take ownership of an Hawaiian island – Lanai – to fund the US official America’s Cup racing team and help fund the hosting of the Americas’ Cup in San Francisco, California. ®