Proxy Adviser ISS Slams Oracle's New Compensation Plan

(Bloomberg) -- Oracle Corp.’s attempt to respond to investor complaints about excessive executive compensation by awarding its three top bosses pay packages worth more than $100 million didn’t please proxy adviser Institutional Shareholder Services Inc.

Investors should vote against the Redwood City, California-based company’s executive pay plan at the Nov. 15 annual meeting, ISS said Thursday in a report to clients.

“Ongoing equity mega-awards to top executives perpetuate a pay-for-performance disconnect,” the report said, noting that the grants are outsized even if they’re portioned out over the five-year vesting period.

Co-Chief Executive Officers Safra Catz and Mark Hurd, and Chief Technology Officer Larry Ellison will each get long-term awards of stock options valued at $103.7 million in fiscal 2018. The vesting is tied to Oracle’s share price, market capitalization and operational goals. The company hasn’t received a passing vote on executive compensation since 2011.

The proxy adviser recommended that shareholders withhold votes for directors Michael Boskin and Bruce Chizen, who sit on the board’s audit committee. Ellison, who founded the company, has for years pledged millions of Oracle shares as collateral for personal loans, a practice that raises “significant concern” regarding the committee’s risk oversight, the report said.

ISS said investors should support a proposal filed by shareholder Pax World Management asking the board to produce a report on whether a gender pay gap exists among the company’s employees. Oracle lags its peers in addressing such issues, the proxy adviser said.

An Oracle spokeswoman didn’t immediately respond to a request for comment.

To contact the reporter on this story: Anders Melin in New York at amelin3@bloomberg.net.

To contact the editors responsible for this story: Alicia Ritcey at aritcey@bloomberg.net, Mary Romano

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