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Oracle suffers premature remuneration: Spaffs $900m on shareholders

Year's worth of dividends dished out early to avoid tax hike

Internet Security Threat Report 2014

Oracle is paying shareholders $867m in quarterly dividends early to beat a possible 2013 US tax hike.

The company declared on Monday an accelerated second, third and fourth quarter cash dividend of $0.18 per share of outstanding common stock.

The bonanza will be paid on 21 December 2012 instead of quarterly in 2013.

Oracle’s single largest shareholder is chief executive Larry Ellison, but Oracle said in a statement its alpha-male boss had not participated in discussions or the board vote on the matter.

At midnight on 31 December the US has its appointment with a fiscal cliff: that’s when tax cuts passed under former president George W Bush will expire, and agreed government spending cuts kick in. Negotiations over exactly what will change are still ongoing in Washington.

When the Bush-era tax cuts end, levies on dividends could jump, depending on one's income, from the six tax categories of 10, 15, 25, 28, 33 and 35 per cent to five categories of 15, 28, 31, 36 and 39.6.

Oracle is the latest US listed company to shunt forward dividend payments to avoid a tax hike for shareholders. Retail giant Wal-Mart is among those dumping barrel loads of cash on investors by paying out quarterly 2013 dividends early. ®

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Internet Security Threat Report 2014
An overview and analysis of the year in global threat activity: identify, analyze, and provide commentary on emerging trends in the dynamic threat landscape.