Oracle gave Larry Ellison and his co-CEOs nearly $1 billion in stock options that are now underwater

Key Points:

• Oracle's stock has declined 53% over the past year, rendering executive stock options with strike prices above current levels "out of the money" and without intrinsic value at fiscal year-end.
• CEO Larry Ellison and co-CEOs Clay Magouyrk and Mike Sicilia hold stock options valued in the hundreds of millions but require the stock price to more than double to profit, while CFO Hilary Maxson opted for a mix of stock options and restricted stock units (RSUs).
• Despite stock volatility, Oracle's cloud revenue rose 39% to $34 billion, cloud infrastructure revenue grew 77% to $18.1 billion, and overall revenue increased 17% to $67.4 billion, with remaining performance obligations surging to $638 billion.
• Oracle reported negative free cash flow of $23.7 billion and raised capital through $43 billion in senior notes and a $20 billion stock sale, but investor sentiment remains weak, partly due to concerns like invoking force majeure on a New Mexico data center.
• Executive cash bonuses were paid, and Ellison's base salary increased significantly, while Oracle employees faced layoffs and a decline in median total compensation from $98,899 to $94,740 in fiscal 2026; shareholders will vote on the pay plan on November 18.