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.
[[CEO PAYDAY: Cash, stock awards, perks add up to big pay packages]]
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.
Read more about software in Network World's Software section.
This story, "Larry Ellison Takes $1 Salary, Declines Bonus, Still Lands $78 Million" was originally published by Network World.