Oracle Corporation awarded its two co-chief executives a combined $350 million in equity compensation in 2024, a package that has since become a focal point for shareholder scrutiny after the enterprise software giant’s stock lost nearly half its value in the year that followed. The awards, granted to Safra Catz and Larry Ellison’s son David Hatch — who serves alongside Catz in the co-CEO structure — represent one of the most striking examples of executive pay decoupled from shareholder returns in recent memory. Debates over pay-for-performance alignment in corporate America have intensified in recent years, even as U.S. debt concerns continue to weigh on broader market sentiment.
According to reporting by Calcalist Tech, the equity grants were structured at the time of award as long-term incentive packages tied to performance milestones, a common framework used by technology companies to attract and retain senior leadership. Critics, however, argue that the sheer scale of the compensation — particularly when measured against subsequent stock performance — raises serious questions about board oversight and the integrity of the benchmarks used to justify such awards.
A Stock in Freefall While Packages Were Locked In
Oracle shares, which had traded at elevated levels through late 2023 and into early 2024 on enthusiasm surrounding the company’s pivot toward cloud infrastructure and artificial intelligence partnerships, began a prolonged decline that erased roughly 45 to 50 percent of the company’s market capitalization over the following twelve months. The drop wiped tens of billions of dollars from Oracle’s equity value, a reversal that left retail and institutional investors absorbing losses while the executives’ grants — vesting on a multi-year schedule — remained nominally intact.
The structure of performance-based equity awards in the technology sector has long attracted debate. When grants are priced at peak valuations and vest over periods during which the underlying stock collapses, the compensation can still deliver substantial realized income to executives even if shareholders experience significant losses. In Oracle’s case, the timing of the $350 million award at what proved to be near the top of the company’s valuation cycle has amplified that criticism considerably. Shareholder advisory groups have flagged the package as a governance concern, according to the Calcalist Tech report, with some institutional investors expected to weigh in during the company’s next proxy season.
Governance Questions Mount for Oracle’s Board
The controversy arrives at a complicated moment for Oracle, which has staked much of its near-term growth narrative on large-scale cloud contracts and a series of high-profile AI infrastructure partnerships. The company has positioned itself as a meaningful alternative to dominant hyperscalers such as Amazon Web Services and Microsoft Azure, signing agreements with several technology firms to host artificial intelligence workloads. That strategic pitch helped inflate the stock’s valuation in 2023, and the same narrative — under pressure from slowing deal closures and intensifying competition — contributed to the subsequent decline.
For Oracle’s board of directors, the episode underscores the difficulty of calibrating executive pay in a sector where valuations can shift dramatically within a single fiscal year. Critics of the awards argue that the compensation committee should have employed more stringent relative performance measures — benchmarking Oracle’s stock against a peer index, for instance — rather than relying on absolute targets set during a period of sector-wide exuberance. Proponents of the current structure counter that long-term equity grants are designed to retain leadership through market cycles, not to penalize executives for macro-driven drawdowns. As the AI technology sector continues to reprice rapidly, Oracle’s co-CEO pay saga is likely to serve as a reference point in future discussions about how boards should structure incentive compensation when valuations are running well ahead of fundamental earnings growth. Proxy advisors and institutional shareholders will have an opportunity to register their views formally when Oracle files its next annual meeting materials, a vote that analysts expect to be closely contested.