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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."
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
The bicycle of political influence? You really just said that?
Oracle's shareholders agree with him. Damn socialist investment bankers!
-- "So they told me that using the download page to download something was not something they anticipated." - Bill Gates
No, he shouldn't
Spoken like a true socialist.
Or, y'know, somebody familiar with the concept of 'property'. Oracle is a publicly traded company (not that this is always a good idea; but they did it), not some sole proprietor outfit. It sold substantial chunks of itself to assorted third parties, so now they get a say. That's about as far from 'socialism' as you can reasonably get.
It doesn't matter whether or not the claim that "Larry Ellison made that company" is true or not because he doesn't own most of it. He is a major shareholder(a trifle under 25%, I think); but he gets paid as an employee of a company owned by a collection of people, including himself, not because Oracle is his personal candy jar and he can get paid what he likes.
He's certainly the most identifiable personality; but charisma is not the foundation of property rights...
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.
Plus it's not Ellison's company, it's the shareholders company. If shareholders think he is overpaid that should have some impact. If he disagrees, he can just quit, right? (That's the bullshit line that used to justify treating workers like shit, so it feels really good to use on a prick like Ellison.)
What this really shows is that corporate governance is broken. The board doesn't work for the shareholders, they are at the beck and call of the CEO. He puts them on the board, they make huge amounts for the little work they do, and so they do whatever the CEO wants. They are a rubber stamp. This is a lot closer to feudalism then real capitalism. The workers are serfs, the shareholders are not much better off, and the lords who run the show take everything they can lay their hands on. Welcome to non-capitalist, not a democracy 21st America.
Why is Snark Required?
As an employee, he gets paid $1/yr. This is not about what he is doing as an employee.
This is about what he is doing as a corporate officer in setting company policies that award himself with $77 million/yr. This is about abusing the corporation so he can diddle the taxman (in the USA all those stock options give him an immediate amount of financial clout that he does not have to pay taxes on until he exercises them. Further, his tax rate at that time will depend on exactly how he structures the transactions that exercise those options).
But the main point is that this corporate officer is twisting company policy to his personal benefit of $77 million/yr and the majority of owners of the company don't like him screwing around with their investment that way.
Will
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.