Larry Ellison gets a pay raise
Oracle chief's pay package for fiscal 2005, excluding exercised options, nearly doubles, in part because PeopleSoft deal wraps up.
Ellison received a 44 percent salary increase to $975,000, according to the company's filing with the Securities and Exchange Commission on Tuesday. And his annual bonus jumped to $6.5 million in fiscal 2005, more than double the level in the previous year.
Oracle's board also approved awarding 2.5 million options to Ellison for fiscal 2005, more than double the 900,000 options he received in the previous year.
With the salary hike, bonus and millions of dollars in options he exercised during the year, Ellison rang up a total compensation package of $75.3 million for fiscal 2005.
Investors, however, have not fared as well.
Oracle's stock has risen as high as 34 percent in fiscal 2005. However, measured against the S&P 500 and Dow Jones Software indexes over a five-year period, the stock has underperformed, according to Oracle's SEC filing. A $100 investment in Oracle at the end of that period would be worth $35.62 in 2005, while the same investment in the S&P 500 would be worth $90.74.
Oracle's board based Ellison's compensation hike on several factors ranging from an improvement in the company's pretax operating profit, on a non-GAAP basis, to the PeopleSoft merger, which removed a sizable competitor in the applications market and gives Oracle more leverage against
Ellison's compensation is appropriate given his "leadership of our long-term growth strategy, consisting of both external growth through our successful acquisitions of companies such as PeopleSoft Inc. and Retek Inc. and internal growth of our existing lines of business," the board noted in its SEC filing.
The board also cited Ellison's leadership on the company's Project Fusion project, which is designed to fully merge PeopleSoft and Oracle applications, and cited success with its grid computing efforts to use its software to serve as a platform for linking low-cost servers together to act as one unit.
Oracle's board, meanwhile, plans to keep Ellison's annual salary rate at $1 million in fiscal 2006 and is submitting a proposed 2006 executive bonus plan for investors to consider at the company's annual shareholders meeting, scheduled for October.
Last June, as Oracle began its new fiscal year, Ellison also received an option to purchase 6 million shares of common stock at the then-fair-market rate of $12.34 a share, according to the SEC filing. Oracle shares were priced at $12.90 in midday trading on Wednesday.