Larry Ellison facing pay cut

Oracle shareholders urged to object to Oracle CEO's $83.4 million pay packet

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By  Mark Sutton Published  October 9, 2008

Larry Ellison is facing a potential shareholder revolt over the size of his pay packet.

The Oracle CEO is the highest paid CEO in the US, and one of the richest men in the world, with a cash and shares pay package of $83.4m last year.

Shareholders that object to such high levels of pay are now being urged to vote for a say in executive pay at the company’s annual meeting tomorrow.

Several shareholder groups, backed by a consultancy group, Proxy Governance, are urging the proposal of a measure that would give them a say in payment of executives, rather than having pay awarded by a committee of board members as it is at the moment.

Ellison’s remuneration comprised of a $1m salary, $10.7m cash incentive payment and stock options of $70.2m, plus $1.4m other payments.

According to figures from Proxy Governance, Ellison’s package works out at 372% more than chief executives in other leading technology companies. Ellison is also the largest Oracle shareholder, with 22.6% of oracle common stock. Ellison proposed, and won, his own 38% pay increase for the last fiscal year.

Other Oracle executives also receive salaries that are around 255% more than average for comparable tech executives.

In a report from Proxy Governance, the consultancy said that while it was not opposed to stock options as a way of aligning executive interests with those of the shareholders, it felt Ellison’s pay was excessive.

“Ultimately, we find such option awards to be excessive, particularly with regards to Ellison, who beneficially owns 22.6% of the company's outstanding common stock and therefore does not need additional incentive to align his interests with those of other shareholders,” the report stated.

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