Eye on Oracle

May 14 2008   8:46AM GMT

Does Ellison deserve to be No. 1?

Shayna Garlick Shayna Garlick Profile: Shayna Garlick

Know who was just ranked No. 1 on Forbes’ list of top-paid CEOs in technology companies in 2007, with a one-year net compensation of almost $193 million?

Here’s a hint: it’s not Apple CEO Steve Jobs, who was knocked down to No. 11 after holding the top spot in 2006.

So, who took Jobs’ place? That would be Oracle CEO Larry Ellison, who also ranked No. 1 on Forbes’ list of overall best-paid CEOs (a list on which Jobs ranked No. 120).

The rankings were based on “the overall compensation for the past year for executives, factoring in salary, cash bonuses, vested stock grants, stock gains and exercised stock options.” Nabeel Gareeb of MEMC Electronic Materials and John Chambers of Cisco Systems rounded out the top three of tech CEOs.

It’s interesting to take a look at what the blogosphere has been saying about Ellison’s “victory.” Silicon Valley reporter Sarah Lacy says that “he may not deserve how much he’s making, but he deserves to be one of the most highly paid CEOs in the Valley.”

She goes on to list Ellison’s accomplishments, including that he both “gets where technology is going” and “gets where technology business is going.”

And to all the Ellison loathers out there, Lacy (who seems to question why she isn’t one herself) had this to say: “But shareholders are not electing him president or best friend. They’re paying him to be a good CEO, and he may be one of the only ones worth what he’s being paid.”

CNET News.com blogger Charlie Cooper has a different take on things. He says that a CEO’s success should be measured by their company’s stock performance, and given Oracle’s stock performance over the last 10 years, Ellison is not worth $193 million (even though many readers leave comments criticizing the data he presents).

What do you think is the best way to measure the worth of a tech CEO? Does Ellison (or anyone, for that matter) deserve to make $193 million in a year? Or, do you think such rankings don’t even matter at all?

3  Comments on this Post

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  • Yves Roy
    I would add to the CEO evaluation criteria the market share of there products, if one year they have 34% and then a few years later they have 75% of market share, it shows they are becoming the standard in there domain. Of course, the company must still be financialy successful. Yves
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  • Andy
    I think that all public companies should adopt what AFLAC has done. Shareholders and the Board of Directors voted to pay their CEO, as well as some of the other mission critical executives, based on company performance. I won't pretend to know all of the specifics but this is probably quantified by measuring a combination of stock market performance and some other key performance indicators that might be specific to measuring success within their industry. If more companies paid executives like this then we probably wouldn't have ever had debacles like Microsoft Vista, the Windows ME of this decade.
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  • Seth Miller
    Did I miss something, or are we still in a free market. CEOs are not omnipotent and they don't lock their employees and share holders in a cage and force them to work or invest. There is not a minute number of CEOs in the world. But there are a minute number of GOOD CEOs and Ellison has many times over proven his worth. What determines if Ellison deserves $193 million? How about the thousands of families of employees or millions of families that in some way or another benefit from Oracle's products putting food on their table. Would Ellison continue to perform at 100% if he made $192 million? Is it worth it to find out?
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