By Noel Randewich
SAN FRANCISCO, Oct 3 (Reuters) - Oracle Corp Chief
Executive Larry Ellison has agreed to give up a potential payout
of around $500 million to settle accusations of a conflict of
interest in the 2011 acquisition by Oracle of a company he
controlled, according to court documents.
The settlement relates to Oracle's purchase of Pillar Data
Systems Inc, a data storage company that was majority owned by
Oracle, the world's No. 3 software maker, paid no cash up
front to buy Pillar, instead agreeing to make future payments
that would depend on the acquired company's performance through
Under the deal, Ellison, who co-founded Oracle and owns
around a quarter of its stock, would have received the first
$562 million of any payment related to the acquisition,
according to the court filing. According to the settlement,
whatever the payment ultimately is, Ellison must pay 95 percent
of it to Oracle.
The suit against Oracle's acquisition of Pillar was launched
in Delaware by two pension funds - the City of Roseville
Employees' Retirement System and the Southeastern Pennsylvania
Transportation Authority. They said the deal to buy Pillar was
"tainted by conflicts of interest and was unfair to Oracle."
Ellison has come under fire for the size of his paycheck as
Oracle struggles to adapt to competition with smaller rivals and
as the software company's once-hot shares lose favor on Wall
Street. The 69-year old Ellison made about $78 million in
Oracle's past fiscal year.
On Wednesday, the company responded to activist investor CtW
Investment Group's criticism that Ellison's compensation is
top-heavy compared to his peers.
"Shareholders have consistently and clearly articulated that
they view Mr. Ellison as an extremely valuable asset to the
Company," Oracle General Counsel Dorian Daley said in an SEC
"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," Daley said.