Business

California pension fund ups pressure on Oracle chief

The pressure is mounting on Oracle’s Larry Ellison.

Just ahead of the company’s Thursday annual meeting, CalSTRS, one of the country’s largest pensions, joined New York City’s pensions in calling for a change in the tech giant’s board to stop what it considers Ellison’s runaway pay.

It is the first time long-time Oracle shareholder CalSTRS has gone public with its opposition.

“We have severe concerns about executive compensation and proper board accountability at Oracle,” CalSTRS said in a letter sent Tuesday to fellow Oracle shareholders that was also signed by two large European pensions.

Ellison, who owns 25 percent of Oracle’s shares, has pocketed $851 million from stock options over the last six years, according to a recent pay survey. Critics say the options are not performance-based.

CalSTRS — based in Oracle’s backyard — is supporting New York City’s nonbinding proposal calling for performance-driven compensation.

New York City, in its proposal, said, “The company’s executive compensation program is poorly structured and is not significantly performance-driven.”

Ellison’s stock options “simply vest with time and not on the achievement of performance hurdles,” NYC says.

GMI Ratings in a 2013 CEO Pay Survey reported that Ellison has made more than $851 million in profits from options over the last six years, stemming from annual grants.

“It appears Oracle is putting Ellison’s interests ahead of ours,” Michael Garland, the New York City Comptroller’s executive director for corporate governance, told The Post.

Over the last twelve months, Oracle’s shares have risen less than 10 percent, closing Tuesday at $33.71.

The Redwood City, Calif., company counters in public filings that the stock options are performance-driven, since they only have value if the share price rises.

The company says $100 invested in May 2008 would be worth $153.38 in May 2013.

Even though the vote is nonbinding, Garland said, “I think the clock will start ticking after Thursday’s vote” for real change to occur.

CalSTRS, in its letter, goes further, saying, “We consider it is in the best interests of our beneficiaries to withhold support from all nominees to the board at the 2013 annual shareholder’ meeting. Consistent with this view, we further consider that it is in the best interests of our beneficiaries to support the shareholder proposal seeking the appointment of an independent chairman to the board.”

New York City said it is voting against the three directors on the board’s compensation committee. The city’s pensions owned 10.3 million shares of Oracle, worth $330 million, as of the record date.

CalSTRS owned 11.5 million shares at a market value of $382 million.