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In a response to a letter sent by the CtW Investment Group, Oracle (NYSE: ORCL ) General Counsel Dorian Daley defended the compensation of Oracle CEO Larry Ellison in a letter filed with the SEC today.
The Oracle co-founder made slightly more than $78 million in the company's last fiscal year, mostly via stock.
CtW sent its letter last week after the Oracle board did not change Ellison's pay despite shareholders rejecting the compensation program in 2012. CtW requested that a new director be placed on Oracle's compensation committee, that Oracle executives' pay be indexed to benchmark measurements of shareholder value (like return on equity), and that more stock-based compensation be given to employees who are not executives.
The letter says that Oracle in 2012 paid its executives almost $253 million, while peers Google and Apple respectively paid their executives $129 and $296 million.
In his written response, Daley questioned why CtW did not send its letter to Oracle directly, while also noting there was no record of CtW actually owning shares. Daley wrote that, "alarmingly, your letter includes a collection of misleading statements, snippets of media reports, and broad comparisons that distort the situation."
Daley assured stockholders the committee did not ignore the shareholder vote on the pay, as the initial letter asserted, but that it instead "took into account the views of our shareholders" and then "exercised its business judgment and made its decision based on full information."
The general counsel's letter also defended Ellison's pay, noting that the board felt he receives appropriate compensation when considering his value to the company."Mr. Ellison is the founder of Oracle and remains its most critical strategic visionary, a role that has served and continues to serve our shareholders extremely well," Daley wrote.
He noted that the letter from CtW seemingly asserted Ellison was overpaid by approximately $50 million, which represented 0.36% of Oracle's free cash flow. Daley concluded the letter by stating plainly that "0.36 of one percent of free cash flow is an extremely low price to pay to continue to procure the leadership services of the one of the world's foremost pioneers in the field of information management technology."