A majority of shareholders opposed Oracle Corp Chief Executive Larry Ellison’s pay in a non-binding vote on Thursday following complaints that the world’s third-richest man makes too much as his company struggles against smaller rivals.<\/p>\n
The vote against Oracle’s executive compensation policy adds to a similar defeat at last year’s meeting, and while it requires no changes from the company, it underscores concern among shareholders about high pay in the face of lackluster financial performance.<\/p>\n
Challenges to the 69-year old Ellison’s pay package come as the world’s No. 2 software maker, which he co-founded four decades ago, tries to fend off smaller, aggressive companies offering software and Internet-based products at prices that often undercut Oracle. Ellison owns about 25 percent of Oracle.<\/p>\n
A majority of shareholders voted in support of Oracle’s directors, including those on the board’s compensation committee – Bruce Chizen, George Conrades and Naomi Seligman. That vote was also non-binding.<\/p>\n
In an initial tally, more than 1 billion votes were cast in favor of Oracle’s executive compensation and more than 2 billion were against. Oracle said figures for the votes on board members were not yet available.<\/p>\n
Major investment advisory groups like CtW Investment Group, which advises union pension funds, had urged shareholders to vote against Oracle’s executive pay and the directors on the compensation committee.<\/p>\n
CtW estimated that excluding Ellison’s shares, close to 85 percent of voted shares were against Oracle’s executive pay.<\/p>\n
“The ball’s in their court,” said CtW analyst Michael Pryce-Jones. “They’ve had two consecutive years of defeats on say-on-pay and so far they’ve shown an absolute disregard for investor concerns on the issue.”<\/p>\n
Ellison gave up an annual cash bonus of $1.2 million for fiscal 2013, which ended in May, after Oracle missed growth targets and his annual salary is a token $1. But he took home stock options value at about $77 million.<\/p>\n
Oracle’s revenue failed to grow in fiscal 2013 and its net profit grew 3.5 percent during that time. During that 12-month period, Oracle’s stock rose 27.5 percent, compared to a 24 percent increase in the Standard & Poor’s 500 index.<\/p>\n
Last year, Oracle’s pay for top executives won support from just 41 percent of votes cast.<\/p>\n
Oracle said its executive compensation is aimed at driving financial performance and the company’s long-term stock price.<\/p>\n
“Our existing executive compensation program achieves an appropriate balance between encouraging our senior executives to take actions that are consistent with our business strategy … and discouraging executives from taking inappropriate or unnecessary risks,” Chairman Jeffrey Henley said after the vote.<\/p>\n
CtW has complained that Oracle’s executive pay far exceeds technology peers like International Business Machines Corp and Cisco Systems Inc.<\/p>\n
Institutional Shareholder Services, the largest advisor for institutional investors, had also recommended a vote against the company’s executive pay and eight of Oracle’s 11 board members, saying board members failed to effectively oversee management in areas like executive pay.<\/p>\n
Rival proxy advisor Glass, Lewis & Co has also recommended votes “against” Oracle’s executive pay and “withhold” votes against five directors.<\/p>\n
Over the past 12 months, Oracle’s stock has gained 9 percent compared to the S&P 500’s rise of 25 percent.<\/p>\n
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