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Dear Everyone: Be Like Oracle

When the Associated Press reported yesterday that Oracle (Nasdaq: ORCL  ) CEO Larry Ellison could make as much as $11 million in bonuses next year, Fool community member zoningfool said exactly what I was thinking: "What's the big deal?"

Her point -- which was made expertly in this post -- is that Ellison and his team earn every dime by keeping their interests aligned with shareholders. She's exactly right. Witness this statement from the SEC filing announcing the 2007 bonus plan:

For all participants, the applicable bonus for their target or targets is related to the amount by which each target is exceeded or missed. If the target bonus calculation results in a negative number, the bonus for such target is zero. [Emphasis mine.]

Read that again, because it's important. Instead of the options backdating practices that were apparently in place to enrich former bigwigs at McAfee (NYSE: MFE  ) , Brocade (Nasdaq: BRCD  ) , Comverse Technology (Nasdaq: CMVT  ) , and others, Oracle demands that its executives perform on behalf of the owners of the company -- the shareholders -- before fattening their wallets.

And they have. Since late 2004, when the PeopleSoft deal was completed, revenue and normalized net income are up an annualized 19% and 12%, respectively. Shares of the database king are up more than 50%, versus about 20% for the S&P 500 over the same period. As a shareholder, I'll take that performance every day of the week and twice on Sunday.

So, where's the problem? Let Larry earn $11 million if he can. As a shareholder, I'm happy to reap the earnings and cash flow gains that sort of payout will demand.

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Fool contributor Tim Beyers owns shares of Oracle. He's also long the stock inMotley Fool CAPS, our new service where Fools collaborate to rate thousands of stocks. Get in the game today. And to get the skinny on all the stocks in Tim's portfolio, check his Fool profile. McAfee is a former Stock Advisor pick. The Motley Fool's disclosure policy is always on the side of shareholders.

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