Oct. 8 (Bloomberg) -- Oracle Corp. shareholders should vote against pay packages for executives and withhold support for directors on the board’s compensation committee, CtW Investment Group said.
Chief Executive Officer Larry Ellison and other top managers are overcompensated relative to peers, given Oracle’s inferior returns, CtW wrote in a letter addressed to shareholders yesterday.
CtW, part of labor-group Change to Win, has been pushing for the world’s largest database-software maker to adopt industry benchmarks for compensation. While Ellison took a pay cut of 18 percent in the latest fiscal year after Oracle missed some of its profit targets, the company said that his package is “appropriate” and rejected CtW’s arguments in a letter addressed to the group and filed with the U.S. Securities and Exchange Commission last week.
“While the company insists that Ellison’s high pay is justified by his founder-CEO status, we note the stark contrast to other technology founder-CEOs,” CtW said in its latest letter to Oracle’s board, citing compensation practices at Amazon.com Inc., Google Inc. and Apple Inc.
CtW, which says it holds 6 million Oracle shares, is also urging shareholders to vote against the re-election of Bruce Chizen, George Conrades and Naomi Seligman, who are on the software maker’s compensation committee. Oracle plans to hold its annual shareholder meeting Oct. 31. CtW sent a letter to Chizen, the committee’s chairman, on Sept. 25 outlining its argument against Oracle’s pay practices.
Ellison’s compensation package shrank to $78.4 million for the fiscal year ending in May, from $96.2 in the previous period, after he gave up an annual bonus and the company missed some of its profit targets. He’s an “extremely valuable asset,” Dorian Daley, Oracle’s general counsel, wrote in the letter to the SEC last week. There was also no record of CtW owning a stake in Oracle, Daley wrote.
Deborah Hellinger, a spokeswoman for Oracle, declined to comment on CtW’s latest note to shareholders.
Shares of Redwood City, California-based Oracle declined 1.1 percent to $32.84 at yesterday’s close in New York, leaving the stock down 1.4 percent this year, compared with an 18 percent gain in the Standard & Poor’s 500 Index.
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