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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."
Don't bother using logic and legal talk with a true believer in American Capitalism (TM). Every time an economic issue comes up around here some right wing crank will call anything socialism that isn't 'let the rich do anything they want without restriction, and minor facts like how publicly traded companies are owned and governed don't matter at all.
I think they get paid a quarter per post or something.
A socialist would believe that all of the workers who contributed to Oracle's success should be allowed to share in the results. A capitalist would believe that all of the investors whose capital made that success possible should share in that success. There are several terms for someone who thinks that the founder should be able to get all of the benefit because he's rich, but none of them are very polite.
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Oh, I'd be the last to argue that he isn't weaseling around (while the 'incentives alignment' theory of stock options is noble, implementation has... encountered assorted complexities under field conditions, to put it politely).
My point was merely that (ironically enough), the guy who was decrying 'socialism' was actually using a we-worship-rich-guys version of the 'labor theory of value' argument(a socialist classic), while the person he was arguing against was using the (more common among people who describe themselves as 'socialists'; but theoretically quite similar) 'no one man's labor can possibly be worth 24534x another's!' labor theory of value(also a fairly common, as well as fairly direct, implication of the labor theory of value).
Had Ellison been a midlevel engineer or something, Mr. Capitalism never would have gone with the 'But without Ellison, PRODUCT X would have crashed and burned! He deserves 200 million if he wants it!' argument. Damn employee can take his salary, and like it, and if he think's he's worth more, he can ask for a raise or man up and start his own company...
The numbers are bigger (owning a little over 20% of Oracle stock is Not Small); but if you want to be a not-socialist, the CEO is still just an employee, working for the shareholders, and he gets the salary market forces command (Har, har, because that's how executive compensation works... In your dreams), and absolutely fuck-all for having 'made this company'. Even if he made it 100%, he only owns 20-odd%, and works for the people who own the rest.
So how come larry gets to decide that all the people actually doing the work only gets a 1/1000th (or whatever) of what he gets? You think he is forced to take that money?
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.
It is a public company, not a private venture. The owners, the stockholders, should make those decisions.
Nobody needs that much cash, and nobody deserves that much cash. It's not like he did everything himself.
First, as long as he's spending it in volume, no one should care. The issue with wealthy people is they like to collect it and hold on to it and be on boards of directors to ensure they never lose it. If he's blowing it on islands and boats and fast cars, he's a great contributor. His money is up for grabs to anyone who wants to work for it. This is a great situation.
Second, we're not talking about taking his compensation and giving it to employees. We're talking about the shareholders not liking how much of the profits HE is getting. Shareholders are always the least valuable contibutors to any company. They are parasites, parasites with control, but parasites. Employees of a company are perfectly ok with 0 profit: salaries are paid. But investors are not happy with that, they will cut heads and salaries as much as possible to maximize that profit number. Taking money away from them, goes back to my first point: it's a good thing when the person doing the taking is spending it.
Thirdly, if people like him do not exist, then no one will try. Ellison, Gates, Jobs all exist as the motivator for business types to do something other than drink and screw. As role models go, he's doing fine.
Capital gains are taxed at a much lower rate than that on salaries.
It gets worse. Larry BORROWS against his stock option so that he does not even have to pay for the 15% tax. This is while he spends hundreds of millions on a yacht race. There is a reason why Larry is the prime candidate for the biggest a-hole in the world.