Shareholders Will Likely Find Oracle Corporation's (NYSE:ORCL) CEO Compensation Acceptable

Key Insights

• Oracle's Annual General Meeting to take place on 14th of November
• CEO Safra Catz's total compensation includes salary of US$950.0k
• The total compensation is 56% less than the average for the industry
• Oracle's total shareholder return over the past three years was 107% while its EPS was down 6.5% over the past three years

Shareholders may be wondering what CEO Safra Catz plans to do to improve the less than great performance at Oracle Corporation (NYSE:ORCL) recently. At the next AGM coming up on 14th of November, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for Oracle

Comparing Oracle Corporation's CEO Compensation With The Industry

At the time of writing, our data shows that Oracle Corporation has a market capitalization of US$502b, and reported total annual CEO compensation of US$6.5m for the year to May 2024. Notably, that's an increase of 23% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$950k.

On comparing similar companies in the American Software industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$15m. That is to say, Safra Catz is paid under the industry median. Moreover, Safra Catz also holds US$208m worth of Oracle stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. There isn't a significant difference between Oracle and the broader market, in terms of salary allocation in the overall compensation package. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Oracle Corporation's Growth Numbers

Over the last three years, Oracle Corporation has shrunk its earnings per share by 6.5% per year. Its revenue is up 5.6% over the last year.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Oracle Corporation Been A Good Investment?

Most shareholders would probably be pleased with Oracle Corporation for providing a total return of 107% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us wonder if these strong returns can continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Oracle that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.