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Ellison takes top spot on pay list

Oracle chief now highest paid in US

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Associated Press / August 22, 2008
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SAN FRANCISCO - Oracle Corp. founder Larry Ellison, a longtime fixture on the list of the world's richest people, is now ensconced atop The Associated Press's rankings of the top-paid chief executives in the United States.

Never shy about flaunting his estimated $25 billion fortune, Ellison established himself as the best-paid chief executive among major US companies by persuading Oracle to award him a fiscal 2008 pay package valued at $84.6 million under the AP's calculations.

The total compensation, disclosed late Wednesday in a Securities and Exchange Commission filing, catapulted Ellison to the top of the AP's annual analysis of chief executive pay.

With a pay package valued at $83.1 million, Merrill Lynch chief executive John Thain held that distinction in June when the AP released its 2008 analysis of executive compensation at more than 400 large companies.

The details about Ellison's compensation weren't available at that time because Oracle operates on an unusual fiscal year ending in May. The anomaly lets Oracle wait until late summer to make the SEC-mandated disclosures about Ellison's pay.

The AP's rankings cover disclosures made within the same calendar year, meaning Ellison could be surpassed if an SEC filing during the next four months reveals another chief executive received an even bigger pay package.

For now, there are only two changes in the list of the 10 best-paid executives. With Ellison taking over the number one spot, Occidental Petroleum Corp. chief Ray Irani fell out of the top 10.

In another revision, News Corp. chief executive Rupert Murdoch now occupies the 14th spot on the list, with a compensation package valued at $30.1 million. News Corp. also disclosed Murdoch's awards this week.

The AP's calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation, and the estimated value of stock options and awards granted during the year. The formula often produces a figure that differs from the numbers listed by companies in their proxy statements.

The analysis doesn't factor in windfalls that the executives generate by exercising stock options awarded in previous years. Ellison stood out in this category too, raking in nearly $544 million by cashing in 36 million stock options during Oracle's last fiscal year.

Excluding those stock-option gains, Ellison's latest pay package represented a 38 percent raise from fiscal 2007.

Although Ellison has been a billionaire for two decades, most of his wealth remains tied up in Oracle stock. He is the Redwood Shores, Calif.-based company's largest shareholder, at 22.6 percent, and can't easily liquidate his holdings without hurting Oracle's stock price.


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