You gotta have goals: Oracle ties Larry, Safra and Mark’s equity to cloud
Want gold, top brass? Make clouds float, hit $80 stock price
Oracle’s top earners will only be able to earn more equity if the company delivers on its cloudy promises and pays out for stockholders, according to a revamped compensation plan.
The changes, detailed in the company’s latest 8-K filing, mean that from fiscal 2018, CTO Larry Ellison and joint CEOs Safra Catz and Mark Hurd will have to create value for their stockholders in order to walk away with their multi-million dollar wage top-up.
Equity awards will now be entirely dependent on Big Red’s performance - previously, they have been partially based on performance.
The value of the awards is also set to drop. Ellison, Catz and Hurd - who will still be raking in their base salaries - will be able to earn back about $103.7m across the five years to 2022, or $20.74m a year.
Oracle has divided the execs' performance options into seven tranches, or a seventh of the money.
One of these will only be paid out if Oracle’s average stock price is $80 or more for 30 calendar days. Oracle’s latest share price was $51.73.
The other six tranches will be earned if Oracle achieves in two areas: market capital and cloud operations.
Market capitalisation goals, which start from a baseline of $207bn (the company currently has a market cap value of $214bn), go up in increments of about $16bn, and range between $16.6bn and $100bn.
Operational goals include bringing in $20bn in total cloud revenues in a fiscal year. This would require an almost fivefold increase on the latest figure, of $4.6bn in FY2017, although this figure represented a 58 per cent increase, from $2.9bn, on FY2016.
Other operational goals include $10bn in total SaaS revenues in a fiscal year (in FY2017, this was $3.2bn), $10bn in total Paas and IaaS revenues in a fiscal year (FY2017, $1.4bn) and “become the largest enterprise SaaS company”.
The move comes as pressure mounts on Oracle to ensure its apparent success with the fluffy white stuff is sustainable, and sales teams are increasingly pushing cloud on customers - even if they don’t really want it.
Sources have previously told El Reg that these customers aren’t renewing their cloud purchases, and that - if they don’t start implementing it - Big Red’s cloud growth could be on shaky foundations. ®