Ellison and Gates face investor pressure
Bill Gates faces pressure to stand down while Oracle defends Ellison's huge pay packet
Investor unrest at Microsoft and Oracle has led to calls for Bill Gates to stand down as chairman and for the latter to seriously rethink the amount it pays its boss Larry Ellison.
This morning, Reuters claimed sources said that three of the top-20 Microsoft investors are lobbying the board to push for founder Gates' resignation as chairman.
Investors are reportedly worried Gates' presence would inhibit imminently departing Steve Ballmer's successor from making substantial changes to the company, and that the chairman's presence limits the adoption of new strategic directions. The source added that the investors in question, who remain anonymous, feel Gates' power is not proportionate to his declining shareholding.
He owns about 4.5 per cent of the firm and remains its largest single shareholder and recently regained his title as being the richest man in the world, with a fortune of $72bn (£44.35bn), according to Forbes' 2013 Rich List.
Meanwhile at Oracle, a group representing shareholders called on the firm to rethink the amount it pays its founder and chief executive Larry Ellison (pictured), who is the fourth richest man in the world thanks to his $43bn fortune, also according to Forbes.
CtW Investment Group - a division of a union federation aiming to enhance shareholder returns - lobbied Oracle to reduce the compensation packet it pays its founder Larry Ellison.
In a letter to the company, it called for the firm to introduce "significant changes [to] compensation practices". It claimed that since 2005, Ellison received an annual grant of seven million stock options which it described as "quite large" and not in line with Oracle's performance.
"While [Oracle's] Compensation Committee emphasises that Mr Ellison receives only a nominal $1 salary (and is not accepting the cash bonus to which he would be entitled to this year), our concerns are not assuaged: several other CEOs at major technology firms receive only nominal salaries and bonuses... without receiving annual equity grants anywhere near the size of those awarded to Mr Ellison," it said in the letter.
Oracle's Compensation Committee was quick to respond to the concerns, scolding CtW for voicing its concerns to the media and not directly to the committee and dismissing its letter as an "incomplete representation of a complicated set of facts".
"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," Oracle said.
"Indeed, shareholders have consistently and clearly articulated that they view Mr Ellison as an extremely valuable asset to the company. And it is a role that will only grow in importance in the coming years as technology continues to advance and change at a rapid pace."