Friday, November 1, 2013

Non-binding pay resolution defeated. Next slide please.

Remember in September, when I blogged about Larry Ellison's no-show at a keynote address that he was supposed to give at Oracle OpenWorld? You see, instead of giving his keynote, he chose to hang out at the San Francisco Bay to watch a boat - his America's Cup boat. (America won, if you didn't hear.)

On the day of Ellison's no-show, you'd think that the world had ended. But a few days later, people seemed to have calmed down. I wrote at the time:

So while the no-show looked really bad on Tuesday, it's probably all but forgotten a week later, unless you have an ax to grind with Ellison anyway.

The Oracle yacht is long gone from the bay, replaced by a Google barge. But it's possible that Ellison's no-show was still remembered. After all, questions are circulating, asking whether Ellison earns his pay.

Now I have no problem with high employee compensation, even if said compensation is very very high. If a sports figure earns billions of dollars for his or her team, then the sports figure deserves to earn tens of millions, or perhaps even hundreds of millions. Likewise, if a corporate executive makes a lot of money for a company, then that executive deserves compensation that is orders of magnitude above my own.

But a lot of investors thought that Larry Ellison's compensation is too high:

A majority of Oracle shareholders demonstrated their opposition to the compensation of the software giant’s chief executive, Lawrence J. Ellison, on Thursday, voting against a nonbinding resolution on the company’s pay practices.

More than two billion shares were voted against the company’s “say on pay” measure at Oracle’s annual meeting on Thursday, while nearly 1.6 billion were voted in favor of the proposal.

However, as Michael J. de la Merced notes, 1.1 billion of those 1.6 billion "yes" votes were cast by Larry Ellison himself.

Now this was a non-binding resolution, and similar attempts to unseat some of Oracle's directors failed. But in the corporate world, where shareholder control of a company is virtually non-existent, even a no vote on a non-binding resolution is a major shakeup.
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