Larry Ellison takes $1 salary, declines bonus, still lands $78 million
- 23 September, 2013 16:09
Oracle CEO Larry Ellison, who consistently ranks among the highest paid CEOs in the U.S., took an 18% pay cut this year.
Ellison drew a token $1 salary for the third year in a row and declined a $1.2 million performance-based bonus after the company missed its internal financial targets. Those gestures did little to reduce the value of his compensation, however. The significant difference between his $78.4 million package in 2013 and his $96.2 million package in 2012 is the value of the stock awards granted to Ellison during the fiscal year -- which were worth $76.9 million this year, compared to $90.7 million in 2012.
The remainder of Ellison's pay package consists of a $1.5 million residential security perk; a $1,126 bonus for being named inventor on two U.S. patent applications; and $2,999 in legal services related to Ellison's personal political campaign contributions.
Ellison was eligible to receive a maximum bonus of $6.1 million, had the company met its performance objectives. But it didn't meet those targets, which led to Ellison turning down the prorated bonus, as explained in the company's proxy statement:
"Given Oracle's pay-for-performance philosophy and fiscal 2013 growth that did not meet Oracle's own internal expectations, Mr. Ellison was eligible for a bonus payment of approximately $1.2 million and voluntarily declined his fiscal 2013 bonus and therefore received no bonus payout ($0) for fiscal 2013."
Ellison isn't the only senior executive to forgo a bonus. Oracle presidents Safra Catz and Mark Hurd did, too. For fiscal 2013, the target bonus for Catz and Hurd was $3.7 million. Factoring in the company's performance, Catz and Hurd were eligible for approximately $717,000 apiece, which they both declined.
Nonetheless, Catz and Hurd earned identical pay packages worth $43.6 million in 2013 -- a decline of 16% compared to their 2012 pay. Their compensation consisted of a $950,000 salary and option awards valued at $42.6 million. Catz and Hurd also earned perks and other compensation worth $20,105 and $22,074, respectively.
In fiscal 2013, Oracle's net income increased 9% to $10.9 billion. Total revenue was flat at $37.2 billion.
Total pay for Ellison, Hurd and Catz is calculated using data supplied in a proxy statement filed with the SEC on Sept. 20. The following figures are taken from the summary compensation table: salary, stock awards, non-equity incentive place compensation (performance-based cash bonus), and all other compensation. The estimated value of equity awards represents the grant date fair value for stock awards and stock options granted during the fiscal year.
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