Oracle co-founder Larry Ellison and co-CEOs Clay Magouyrk and Mike Sicilia were awarded stock options worth a combined $988 million in fiscal 2026. But by the end of the year, all three packages were underwater, as Oracle's share price plunged from near-record levels.
Fortune citing Oracle's latest proxy statement reported that Ellison's options were valued at $117.8 million when granted in October 2025, with a strike price of $280 a share. Magouyrk and Sicilia received options valued at $621.7 million and $248.7 million, respectively, with an exercise price of $308.
Oracle shares closed at $137 on Friday, down 53% over the past 12 months. That means the stock needs to more than double from current levels for Magouyrk and Sicilia's options to have value at exercise.
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The awards came despite a strong operating year for Oracle. Cloud revenue rose 39% to $34 billion, while cloud infrastructure revenue jumped 77% to $18.1 billion. Overall revenue increased 17% to $67.4 billion. The company's remaining performance obligations also surged to $638 billion from $138 billion a year earlier.
The catch was Oracle's aggressive spending spree. Capital expenditure stood at $55.7 billion, while free cash flow turned negative at $23.7 billion. Oracle also raised $43 billion through senior notes and later sold $20 billion of stock at $141 a share.
Oracle said the options having no intrinsic value at fiscal year-end was evidence that the compensation structure was working as designed. The company's board said stock options are “strongly performance-based” because executives benefit only if the share price rises above the exercise price.
The company also said it did not take any special measures to compensate executives for the fall in option values.
Meanwhile, CFO Hilary Maxson chose a different route under Oracle's new Equity Choice Program, opting to put $10.4 million of her $26 million equity award into restricted stock units. Those shares were worth $7.7 million at Friday's close, down from $12.7 million at fiscal year-end.
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Ellison and the two co-CEOs also received $4.9 million each in cash bonuses. Ellison's base salary rose from $1 to $950,000.
Oracle employees, meanwhile, saw median global compensation fall to $94,740 in fiscal 2026 from $98,899 a year earlier. The company has also undertaken layoffs.
Fortune reported that Oracle did not immediately respond to a request for comment. Shareholders are due to vote on the company's pay plan on Nov. 18.
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