Ellison, Co-CEOs Awarded $988M Stock Options, All Underwater

Oracle awarded co-founder Larry Ellison and its newly appointed co-CEOs stock option packages with a combined grant-date value of $988 million during fiscal year 2026. This period was marked by significant growth in Oracle's cloud business and a 38% total return on its shares. However, by the conclusion of the fiscal year on May 31, all of these stock options were "underwater," meaning their strike prices exceeded the current market value of Oracle's stock. This outcome was attributed to the volatile nature of Oracle's stock performance throughout the year and the fact that the options were granted at or near a price peak. Oracle, like many other large technology companies, has been heavily investing in financing and constructing data centers, incurring $55.7 billion in capital expenditures in the past fiscal year. As of Friday, Oracle's stock closed at $137, reflecting a 53% decrease over the preceding 12 months. The company's proxy statement, released on Friday, detailed the diminished value of all three executive packages, stating that their awards "had no intrinsic value" by the end of the fiscal year. The strike prices for these options, which represent the price at which the options can be exercised for profit, are higher than the current trading price of Oracle's shares. Larry Ellison's specific award was valued at $117.8 million upon its grant in October and carries a strike price of $280. For co-CEOs Clay Magouyrk and Mike Sicilia, the exercise price for their options is $308. Magouyrk and Sicilia received their respective packages, valued at $621.7 million and $248.7 million, shortly after their promotions in September 2025. They succeeded former CEO Safra Catz, who continues with the company as executive vice chair. For Magouyrk and Sicilia to realize any profit from their stock options, Oracle's stock price would need to more than double from its current level. In contrast, the newly appointed Chief Financial Officer, Hilary Maxson, who joined in April 2026, chose to participate in a new "Equity Choice Program" introduced by Oracle in fiscal year 2026. This program allows executives to select their equity awards in the form of 100% stock options, 100% restricted stock units (RSUs), or a balanced 50-50 combination of both. The program incentivizes the choice of stock options by granting four times the number of options compared to the equivalent value in RSUs, acknowledging the inherent risk and potential reward associated with options.