Software giant Oracle ($ORCL) suffered an embarrassing defeat on executive compensation policy last week.
According to results released by the company, the vote on executive compensation was 40.9% in favor, 58.9% against and 0.2% abstentions.
However, as PIRC points out, that almost certainly underestimates the extent of opposition. Founder and CEO Larry Ellison owns 23% of the company’s shares. Assuming he voted his shares in favor, that means 83% of independent shareholders cast their votes against the resolution.
Arguably Oracle should not be surprised, given that there was a sizeable oppose vote last year too. PIRC had recommended opposition. All three Compensation Committee members received significant votes against their re-elections with the Chairman receiving only 61% support and the other two members receiving 66% support. (Oracle loses Say on Pay vote, PIRC)
As far as I’m concerned, there are any number of concerns at Oracle. I understand the board doesn’t even have a formal contract with Ellison or a formal clawback policy regarding executive incentive pay. His compensation is through the roof. Good to see those such as PIRC trying to reign it in. Shareowners should also try to get a majority vote standard for electing directors at Oracle.
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