On top of $544m stock option windfall: Oracle’s Ellison rakes in $84.6 million pay package - Daily Times, Pakistan - 8/24/08

On top of $544m stock option windfall: Oracle’s Ellison rakes in $84.6 million pay package

SAN FRANCISCO: Billionaire Larry Ellison raked in a fiscal 2008 pay
package valued at $84.6 million for his work as Oracle Corp.'s chief
executive and topped it off with a nearly $544 million windfall from
cashing in stock options that he has accumulated during his 31-year
reign at the business software maker.

Oracle's
payments and other awards to Ellison, spelled out in documents filed
Wednesday, represented a 38 percent raise from the $61.2 million
package that the Redwood Shores-based company doled out to its
flamboyant leader in the previous year.

Unlike most companies, Oracle operates on a fiscal year ending May 31.

Oracle
reasoned Ellison deserved to be richly compensated because the
company's fiscal 2008 profit climbed 29 percent to a record $5.5
billion while its stock price rose 18 percent to create about $19
billion in shareholder wealth.

Ellison, 64, has played a
pivotal role in Oracle's recent prosperity by engineering more than $35
billion in acquisitions during the past three years _ an expansion that
has turned the company into an even more powerful player in the
business software industry.

The Associated Press bases its
executive pay totals on salary, bonus, incentives, perks, above-market
returns on deferred compensation and the estimated value of stock
options and other equity awards granted during the year.

Like
last year, most of Ellison's fiscal 2008 compensation consisted of 7
million stock options designed to give him an incentive to increase
Oracle's future market value.

Using a complex formula dictated
by securities regulators, Oracle estimated that the options awarded to
Ellison during its last fiscal year were worth $71.2 million. But just
how much Ellison makes will depend on how much higher Oracle's stock
goes beyond the options' exercise price of $20.49.

Oracle
shares gained 10 cents Wednesday to close at $22.66. Based on that
price, the options that Ellison received in fiscal 2008 are currently
worth about $15 million.

As one of the world's richest men, Ellison has already illustrated just how lucrative stock options can be.

In
fiscal 2008, Ellison recognized a gain of $543.8 million by exercising
36 million stock options. That was nearly three times more than the
$182 million that Ellison made from cashing in stock options in
previous year.

Even after those sales, Ellison still holds
more than 33 million unexercised stock options and owns a 22.6 percent
stake in Oracle, which he co-founded in 1977 and has run ever since.

Ellison's
leadership helped establish Oracle as one of the world's largest
software makers, with annual revenue of $22 billion and a market value
of $117 billion.

The company's success has left Ellison with an estimated fortune of $25 billion, according to Forbes magazine.

Besides
giving him more stock options, Oracle paid Ellison a $1 million salary
_ unchanged from the previous year _ and $10.8 million in non-equity
incentive compensation. Oracle also paid $1.4 million to protect
Ellison, with most of the bill covering security at his 45-acre home in
Silicon Valley.

Ellison's total compensation topped the most
lucrative package on The Associated Press' 2007 lists of the best-paid
US executives. John Thain, who was hired as Merrill Lynch's CEO in late
2007, led the pack with a package valued at $83 million.

Because of Oracle's unusual fiscal year, Ellison's pay wasn't disclosed in time to make that list. ap