Fund managers, CalSTRS and PGGM of the Netherlands to press for a vote against Oracle's executive pay policies
A big UK pension fund is among a number of investors preparing to protest against the pay polices of the California-based software company Oracle – whose chief executive Larry Ellison received $76m last year – at its shareholder meeting on Thursday.
Railpen has joined forces with other high-profile fund managers, CalSTRS of the US and PGGM of the Netherlands, to urge fellow shareholders to vote against all the directors standing for election to the board and in the vote on pay policies.
Deborah Gilshan, corporate governance counsel at Railpen, said it was very unusual for the pension fund to join in such an effort and to oppose the election of directors to the board. "This is a reflection of the serious of our governance concerns," she said.
Advisory groups such as ISS are also recommending a vote against the pay policies and the re-election of some directors.
Oracle, which declined to comment, had failed to win the backing of its shareholders for its pay policies last year.
"By our calculations, 86% of independent shareholders voted against the resolution," the three pension funds wrote in their joint letter to all shareholders.
Ellison, who founded Oracle, owns 25% of the shares.
"This is not a situation any board should ignore, even taking into account the advisory nature of the pay resolution, as it is clearly a request for change by shareholders," the three funds said. "Subsequent to the vote from last year, we would have expected the board to have addressed issues such as excessive compensation and the lack of performance hurdles in the vesting of long-term incentives."
In its invitation to the meeting sent out to shareholders, Oracle said "significant changes to our executive compensation programme were not warranted" despite last year's protest.
The company added: "The compensation committee realises that certain of our stockholders may disagree with this conclusion, but the compensation committee believes that our executive compensation philosophy and the current structure of our executive compensation program are in the best interests of Oracle and its stockholders."
[Image: Oracle CEO Larry Ellison, via Wikipedia Commons]