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Oracle Shareholders Vote Against Ellison's Compensation Package (Again)
angry tapir writes "A majority of Oracle shareholders have once again voted against the company's executive pay practices, including for CEO Larry Ellison. The vote at Oracle's annual shareholder meeting is nonbinding, and follows complaints from some large shareholders and their representatives who say Ellison is overpaid compared to his peers. Ellison is paid US$1 in salary, receiving the rest of his pay in stock options. In Oracle's past fiscal year, that totaled $76.9 million. Shareholders voted against Oracle's executive pay practices at last year's meeting as well."
They know they don't have any power, so they choose to "vote" in a non-binding resolution. Larry must be really scared now!
The guy built that company up from a two-bit hole in the wall operation into one of the largest computer empires known to man. He could fairly ask for a billion bucks a year as a salary and he would deserve it all!
I don't like Oracle and think their products are suck-ass bloatware, but Larry Ellison made that company. He should be able to profit from it to his heart's content! Plus he likes to play with toys all the time. Wouldn't you just say "fuck all" and go sailing for a while if you had billions of dollars in net worth?
While TFA provides a good summary of the vote, it does a terrible reason of explaining why the shareholders voted as they did.
So why are the shareholders against Larry's compensation package? The use of stock options means that Larry only gets paid if the company is doing well; or rather more specifically if the company's shares are doing well, which is all the shareholders are going to care about in the first place. At 4.6B shares the company is big enough that Larry's compensation isn't going to meaningfully dilute the value of shares. And switching to traditional compensation packages would eat into Oracle's profits.
What am I missing here? For a company that's doing well, this seems like the perfect way to pay Larry. What is it the shareholders would rather do, and why would it be any better?
http://www.propublica.org/article/heres-why-healthcaregov-broke-down
Karma: Bad
I've always wondered why Oracle has two presidents as well. Having worked for the Big-O I can atest that it is two companies in one. Sales is just an enabler for the real money maker: support and services. So even though Oracle has two presidents (Mark Hurd - sales, Safra Catz - services), there's only one big dog on the porch and believe me it's Safra...
Karma: Bad
If they don't like the pay practices, why do they even own the stock?
Voting in a non-binding referendum? Isn't that like bailing the Costa Concordia with a paper cup?
If they don't like the pay practices, why do they even own the stock?
Voting in a non-binding referendum? Isn't that like bailing the Costa Concordia with a paper cup?
More like a strainer...
The idea is sound but it's simply too many shares. He doesn't even need to perform well because the stock could tank 50% and he would still get almost 40 million dollars. Cut the number of shares by 75% and it makes more sense.
If they had a binding referendum, people might get the idea that shareholders own the company or something. We can't have that. They might want to do stuff that billionaires don't like.
Maybe /. has grown up, or is it just me, but...
Not even a single joke about shareholders shocked by the size of Larry's packgage? How come?
http://www.hhs.gov/digitalstrategy/blog/2013/10/more-on-the-tech-surge.html
No CEO should get cash compensation. They should be paid exclusively in stock options. Why? Because they will only make any money if they make the company a success and the stock price goes up. If the stock price goes down, their options are worthless unless and until the price recovers.
Paying CEOs only in stock options would guarantee that they didn't make a dime if the company performed poorly. A 1 year holding period after exercise would prevent them pumping up a quarter artificially just to dump it and quit.
It's always baited around that a corporation has to do what the shareholders say and that this ensures much less corruption than in government.
Seems more like the corporation is a dictatorship.
It's always baited around that a corporation has to do what the shareholders say and that this ensures much less corruption than in government.
Seems more like the corporation is a dictatorship.
No its not -- that's you just misunderstanding how a corporation works. The shareholders select the board. The board controls the leadership. The leadership controls the company. That's how all companies work, and should work. (And, probably not coincidentally, exactly how the US government was intended to work.)
Why? Shareholders (like voters in the US) don't have enough knowledge and experience to have their opinions really matter. You use your single vote to select people who you feel represent you best -- in a company, or the government. Then you let them do what you hired them to do. If you don't like it, you don't vote for them again.
I don't like Oracle and think their products are suck-ass bloatware, but Larry Ellison made that company.
And then he sold that company to the shareholders. His profit is the money he got for the shares.
Finally, someone who understands!
And it's sad that the above comments turned it into a Capitalist/Socialist thing.
What we're seeing is your typical corporate CEO strategy - outlandish pay for mediocre performance. And I think that's the REAL issue here.
And folks, remember stock options DO NOT GET TAXED LIKE REGULAR INCOME. So, he's paying close to zero tax on this and differing gains - maybe forever by moving them offshore. This billionaire is getting a sweet sweet deal on the middle class' back.
Go look at your pay stubs or at at that check you send to the IRS every quarter my fellow small businessmen and ask yourself, "Why am I not getting that same deal?"
No CEO should get cash compensation. They should be paid exclusively in stock options. Why? Because they will only make any money if they make the company a success and the stock price goes up. If the stock price goes down, their options are worthless unless and until the price recovers.
At which point the Board promptly "re-prices" the options. Lets see what CPAs have to say about that:"Repricings effectively reward executives for corporate difficulties, rather than hold them accountable."
http://www.nysscpa.org/cpajournal/2007/1007/perspectives/p6.htm
It doesn't matter what the stockholders voted as their votes don't count.
It's like the French voting for American presidents.
blindly antisocialist = antisocial
That's how all companies work, and should work.
Shouldn't the employees be the owners? Or at least have the voting rights? At least to vote in directors, if not actual policy?
Shareholders (like voters in the US) don't have enough knowledge and experience to have their opinions really matter.
Oh you're just one of those people... shouldn't have bothered replying.
And I think what makes him a judge of it is that he's a shareholder of the company who is saying that Larry is paid too much.
Well, if the CEO is only paid $1 per year, the peons should probably receive only about 1c per year.
Yeah, it's nonbinding as in they can still do it but they'll get massacred on the stock price. Good luck with that one, Larry. You know what would be really funny? If the stock options he got were voting stocks. Then he could show up in a hat, big glasses, and a mustache and and vote yes on Larry's compensation.
Pff! I wouldn't get out of bed for that. No wonder they're complaining it's not enough ;-)
Just as long as it isn't a governmental dictatorship.
Private corporate dictatorship, though, is the Invisible Finger and therefore Holy.
The guy built that company up from a two-bit hole in the wall operation into one of the largest computer empires known to man.
All by himself? Yeah, not quite. Larry may own a lot of stock but he didn't build Oracle up all by his lonesome. A LOT of other people were involved with that and their contributions matter. Many of them arguably more than Larry himself. You are making the same stupid argument I hear people make on sports radio about how some star player "won" the title, as if none of his teammates mattered a bit.
He could fairly ask for a billion bucks a year as a salary and he would deserve it all!
Really? He brings in more value to the company than $1B/year? I think you are going to have to provide some evidence for that.
As an employee, he gets paid $1/yr. This is not about what he is doing as an employee.
He gets a salary of $1/year. He gets paid considerably more than that. Compensation is not just what is on your W2.
It's all part of being a sociopath. What other people think doesn't matter.
I never met Uncle Larry for breakfast, or tea, or lunch or dinner, he never even talked to me. But I know deep in my heart that uncle Larry is the fucking man!
I would have so many women and nice cars and beautiful things, get massages all day, ejaculate twice a day, take showers, go in Japanese baths if I was him. I would eat great, and feel blissful, I believe Uncle Larry does all these things. If I ever meet uncle Larry I want to pat him on the back and shake his hand. For being an awesome inspiration for his nephew.