Key Insights

• Oracle will host its Annual General Meeting on 14th of November
• CEO Safra Catz's total compensation includes salary of US$950.0k
• The overall pay is 55% below the industry average
• Oracle's EPS declined by 6.5% over the past three years while total shareholder return over the past three years was 102%

Shareholders may be wondering what CEO Safra Catz plans to do to improve the less than great performance at Oracle Corporation (NYSE:ORCL) recently. At the next AGM coming up on 14th of November, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Comparing Oracle Corporation's CEO Compensation With The Industry

According to our data, Oracle Corporation has a market capitalization of US$476b, and paid its CEO total annual compensation worth US$6.5m over the year to May 2024. We note that's an increase of 23% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$950k.

On comparing similar companies in the American Software industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$14m. That is to say, Safra Catz is paid under the industry median. Moreover, Safra Catz also holds US$203m worth of Oracle stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. There isn't a significant difference between Oracle and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Oracle Corporation's Growth

Over the last three years, Oracle Corporation has shrunk its earnings per share by 6.5% per year. In the last year, its revenue is up 5.6%.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Oracle Corporation Been A Good Investment?

Boasting a total shareholder return of 102% over three years, Oracle Corporation has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Oracle that you should be aware of before investing.

Switching gears from Oracle, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.