Oracle Shareholders Urged to Vote Against Most Directors

Oracle Corp. (ORCL) shareholders should vote against the company’s independent directors at the annual meeting, Institutional Shareholder Services said, seeking to better align executives’ pay with performance.

ISS, which advises investors about corporate proxy matters, said votes should be withheld from Chairman Jeff Henley and seven independent board members, including Bruce Chizen, George Conrades and Naomi Seligman of the compensation committee as part of its proposals to revamp Oracle’s compensation policies.

Oracle, based in Redwood City, California, is tussling with labor-group Change to Win over executive pay ahead of the company’s Oct. 31 annual meeting. CtW has been pushing for the world’s largest database-software maker to adopt industry benchmarks for compensation and has said Ellison and other managers are overcompensated relative to peers, given the company’s inferior returns.

“ISS recommends that shareholders withhold votes from the Chairman and nonemployee members of the board for failing to provide effective oversight of management on behalf of shareholders, as evidenced by the board’s non-responsiveness to shareholder concerns regarding executive compensation, persistent pay-for-performance misalignment, and tolerance of substantial pledging of shares by the CEO,” ISS said in a report yesterday.

Photographer: David Paul Morris/Bloomberg

Oracle Corp. Chief Executive Officer Larry Ellison leaves the stage at the conclusion of his keynote address during the Oracle OpenWorld conference in San Francisco, California, on Sept. 22, 2013. Close

Oracle Corp. Chief Executive Officer Larry Ellison leaves the stage at the conclusion... Read More

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Photographer: David Paul Morris/Bloomberg

Oracle Corp. Chief Executive Officer Larry Ellison leaves the stage at the conclusion of his keynote address during the Oracle OpenWorld conference in San Francisco, California, on Sept. 22, 2013.

Deborah Hellinger, a spokeswoman for Oracle, declined to comment on the ISS report. The company’s general counsel, Dorian Daley, said earlier this month that Ellison is an “extremely valuable asset” and that Oracle is one of the “best-managed companies in the technology sector.”

Proxy Votes

ISS recommended that shareholders vote to re-elect Chief Executive Officer Larry Ellison and co-presidents Safra Catz and Mark Hurd, who aren’t independent directors.

Egan-Jones, another proxy adviser, also published a report in which it advises shareholders to vote against Oracle’s executive compensation plan, although it recommended votes for all directors.

Oracle shares fell 1.6 percent to $32.75 at the close in New York. The stock has declined 1.7 percent this year, compared with a 19 percent gain in the Standard & Poor’s 500 Index.

To contact the reporter on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

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