Oracle has fired back against charges by a shareholder advisory group that CEO Larry Ellison's compensation is excessive given the company's performance and when compared to other tech company CEOs.
Ellison receives a $1 salary, taking the remainder of his pay as stock options. In Oracle's past fiscal year, Ellison took home $76.9 million but declined to take a bonus.
Last week, CtW Investment Group sent a letter to Oracle compensation committee chairman Bruce Chizen, criticizing Oracle's "top-heavy" executive compensation practices and saying Ellison's pay "far outstrips" his peers. CtW represents union pension funds that are "substantial" Oracle shareholders.
Oracle general counsel and secretary Dorian Daley responded to CtW in a letter filed with the US Securities and Exchange Commission yesterday.
"Your nine page letter purports to lay out the case why Mr. Ellison's pay package is excessive, but any thoughtful review of your letter, as we made, actually makes the opposite case - that Mr. Ellison's pay package is appropriate under the circumstances," Daley said. "Alarmingly, your letter includes a collection of misleading statements, snippets of media reports, and broad comparisons that distort the situation."
Oracle's board believes the company is one of the "best-managed companies in the technology sector," Daley said.
In addition, Ellison "remains its most critical strategic visionary" and his compensation is an "extremely low price to pay to continue to procure the leadership services of one of the world's foremost pioneers in the field of information management technology," Daley added.
There have been times when Ellison's stock option grants have "expired worthless," and other occasions when grants have "performed well - aligning his interests directly with the interests of all Oracle shareholders," Daley said.
The subject of Ellison's and other Oracle executives' pay has come up on a number of previous occasions. Last year, shareholders voted against Oracle's pay practices in a non-binding measure. They will receive a similar opportunity at Oracle's upcoming shareholder meeting on October 31.