Friday, September 25, 2009

Two ex-chairmen, one chairman. Who has the most power?

Oracle's Larry Ellison gave a talk at the Churchill Club in San Jose a few days ago, which included a revelation:

One of the more important revelations was that Oracle's latest announced purchase, Sun Microsystems, is leaking money at a rate of $100 million per month and that the final regulatory blessings of the European Commission on the $7.4 billion Sun acquisition announced April 20 cannot come soon enough.

But part of the proceedings were lighter - sort of:

Toward the end of Larry Ellison’s freewheeling talk in San Jose on Sept. 21, host Ed Zander got into a spat with a fellow in the back of the room who insisted he wanted to ask Ellison two questions, not the allotted one. By the time the hotel ballroom looked back, they realized the dogged questioner was none other than Sun Microsystems chairman Scott McNealy.

“Do you have any idea what future ex-chairmen can do?” McNealy, dressed in old jeans and a blue T-shirt, asked Ellison, who was on stage being interviewed by Zander, who once served as Sun’s president. (McNealy’s second question was about hockey’s San Jose Sharks).

Now while many of you think of Zander as an ex-Sun employee, I think of his subsequent position, in which he was chairman of my former employer, Motorola. from Motorola, two years after Scott down as CEO of Sun, retaining the Chairman's position.

I don't think that Charles Phillips or Safra Catz are about to try to oust Larry Ellison from the CEO post. And they can't oust Ellison from the Chairman's post at Oracle, because he doesn't hold it - Jeff Henley does. (Oracle's complete Board of Directors is listed here.)

Oracle separated the Chairman and CEO positions back in 2004, before it was cool to do so.

Oracle Corporation's (Nasdaq: ORCL) Board of Directors announced that it is separating the responsibilities of Chairman of the Board and Chief Executive Officer. At its meeting today, the Board elected Oracle's Chief Financial Officer, Jeff Henley, Chairman of the Oracle Board. In addition, Safra Catz and Charles Phillips have each been promoted to President reporting to Oracle Chief Executive Officer, Larry Ellison....

"The Oracle Board of Directors believes these changes will enable the company's deep management talent to better serve customers, run the company with excellence and integrity and complement its good corporate governance," said Dr. Michael Boskin, Chairman of the Nomination and Governance Committee and of the Committee on Compensation and Management Development of the Oracle Board of Directors.

Now there are too many variables to compare Ellison, Zander, and McNealy and to figure out why (pending EU approval) Ellison will be the only one of the three with any real power, even though he doesn't have complete control over the firm. What would have happened if Ellison had introduced the RAZR, or Zander had bought every enterprise company imaginable? No one will ever know.
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