by Thomas Wailgum

Larry Ellison’s $1-a-Year Salary: Just Plain Stupid

Aug 25, 20093 mins
Enterprise Applications

Sorry, Larry: A $1-a-year salary gesture simply rings hollow right now.

If any current tech CEO deserves the kind of overinflated, outlandish salary that Silicon Valley is famous for bestowing on its golden boys, it’s Oracle’s Lawrence J. Ellison.

But no matter, benevolent Larry—a would-be modern-day Robin Hood who’s also the world’s fourth wealthiest person—announced in a regulatory filing that he will be drawing a 2010 base salary of $1 from Oracle’s coffers. (Oracle’s 2010 fiscal year started in June). His band of Merry Men, we are left to presume, will still be “stealing from the rich and giving to the rich (themselves),” as it were.

I’ve never been a fan of the symbolic buck-a-year CEO strategy, even though many CEOs have embraced it over the years—including Apple’s Steve Jobs and Lee Iacocca at Chrysler way back when. This tactic rings hollow with me, and the intended benefit to customers—showing that this CEO truly cares and is mindful of his own company’s expenses—is downright ridiculous and almost insulting when you consider the overall compensation packages including stock, bonuses and other perks that these leaders take home.

In Ellison’s case, it makes even less sense, given the voluminous ways in which he has enriched Oracle shareholders over the years. Right now, Oracle’s stock price is at an amazing 52-week high, notes an analysis of Ellison’s new salary on 24/7 Wall St. How many other companies can say that? He’s made smart, bold acquisitions through the years that have paid off handsomely for shareholders and the company.

Ellison has, in fact, pushed Oracle shareholders to tie his pay more directly to Oracle’s performance. At the end of the day, shareholders must understand that tech titans like Ellison don’t come around that often: There would never be a wildly successful Oracle without him.

Now, we can certainly make a case (and I have) that Oracle has ultimately paid more attention to shareholders and has done a number on its customer base as of late: keeping its prices sky high and refusing to budge on its maintenance and support cash cows for its ERP, CRM, BI and supply chain products; pushing its “100 Days of Innovation” program when its customers are struggling with legacy applications and painful upgrades; guzzling far too much of its Kool-Aid; messing with customers on its SaaS plans; and failing to lay out a clear succession plan for a post-Ellison Oracle.

In a previous article, I compared Ellison to The Simpson’s maniacal nuclear power-plant owner and all-around business evil-doer C. Montgomery Burns. In light of this recent news, I’m willing to bet that Mr. Burns would never even entertain a discussion of a dollar-a-year salary.

Now 65 years old, perhaps a kindler-and-gentler Ellison is emerging.


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