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Oracle’s Larry Ellison steps down as chief executive Oracle’s Larry Ellison steps down as chief executive
(35 minutes later)
Oracle announced Thursday that Larry Ellison will step down as chief executive after nearly 40 years running the company he co-founded in 1977. Oracle announced Thursday that its flamboyant, hard-charging chief executive Larry Ellison will step down after nearly 40 years running the company he co-founded in 1977.
Ellison, 70, will become the company's executive chairman and chief technology officer. Oracle will be run by two co-chief executives: Ellison's longtime deputy Safra Catz and Mark Hurd, former chief executive of Hewlett-Packard. The 70-year-old Ellison, perennially among the highest paid executives in the country, built Oracle into the nation’s leading provider of business software and computer services, while spending his money on a Japanese-themed California mansion, his quest to win the America’s Cup sailing race, his own private full-size golf course, a set of 16th century Samurai armor, the acqusition of a small Hawaiian island and a Newport, RI mansion that once belonged to the wealthy Astor family.
"Safra and Mark will now report to the Oracle Board rather than to me," said Ellison in a statement. "All the other reporting relationships will remain unchanged. The three of us have been working well together for the last several years, and we plan to continue working together for the foreseeable future. Keeping this management team in place has always been a top priority of mine." According to the 2014 Forbes list, Ellison is the third-richest man in the United States, worth roughly $50 billion.
But company executives also stressed in an earnings call Thursday that the company would be run in much the same way it has been for years. But many critics point to the company’s decelerating growth rate of about 3 to 5 percent and say that Oracle’s dominance has only been sustained through a steady diet of gobbling up smaller companies before they became competitors.
"There will actually be no changes," Catz said. "No changes. Whatsoever." Shares of Oracle initially tumbled more than 5 percent in after hours trading after closing at $41.55 a share, but they recovered after it became clear that Ellison would remain active in running the company. The company also reported earnings that fell short of analysts’ expectations.
Ellison is one of the technology industry's pioneers, and has held primary control at Oracle long after peers such as Microsoft co-founder Bill Gates left the companies they built. According to the 2014 Forbes list, Ellison is the third-richest man in the U.S; his pay package in 2013 was worth $78.4 million. Ellison, whose 25 percent stake of the company was worth $45 billion at the close of trading Thursday, will remain the company’s executive chairman and chief technology officer. Oracle will be run by two co-chief executives: Ellison’s longtime deputy Safra Catz and Mark Hurd, former chief executive of Hewlett-Packard.
"Larry has made it very clear that he wants to keep working full time and focus his energy on product engineering, technology development and strategy," said the presiding director of Oracle's board, Michael Boskin. "Safra and Mark are exceptional executives who have repeatedly demonstrated their ability to lead, manage and grow the company. The Directors are thrilled that the best senior executive team in the industry will continue to move the company forward into a bright future." “Safra and Mark will now report to the Oracle Board rather than to me,” said Ellison in a statement. “All the other reporting relationships will remain unchanged. The three of us have been working well together for the last several years, and we plan to continue working together for the foreseeable future. Keeping this management team in place has always been a top priority of mine.”
Ellison is one of the technology industry’s pioneers, and has held primary control at Oracle long after peers such as Microsoft co-founder Bill Gates left the companies they built. Some earlier heir apparents, such as Ray Lane, left the company years ago.
Even now, “Larry has made it very clear that he wants to keep working full time and focus his energy on product engineering, technology development and strategy,” said the presiding director of Oracle’s board, Michael Boskin. “Safra and Mark are exceptional executives who have repeatedly demonstrated their ability to lead, manage and grow the company. The Directors are thrilled that the best senior executive team in the industry will continue to move the company forward into a bright future.”
Ellison will retain control of all software and hardware engineering at the company. Catz will handle manufacturing, finance and legal functions. Hurd will be in charge of sales, service and vertical industry global business units.Ellison will retain control of all software and hardware engineering at the company. Catz will handle manufacturing, finance and legal functions. Hurd will be in charge of sales, service and vertical industry global business units.
Company executives also stressed in an earnings call Thursday that the company would be run in much the same way it has been for years. “There will actually be no changes,” Catz said. “No changes. Whatsoever.”
Catz, formerly an Oracle president and its chief financial officer, has been with the company since 1999. Hurd came to Oracle in 2010 and has been the company president in charge of corporate direction and strategy for its “global field operations.”Catz, formerly an Oracle president and its chief financial officer, has been with the company since 1999. Hurd came to Oracle in 2010 and has been the company president in charge of corporate direction and strategy for its “global field operations.”
Oracle shares fell sharply Thursday in after-hours trading, down more than 2 percent from a closing price of $41.55 per share. Some analysts weren’t convinced that the executive shift is anything more than an outward-facing readjustment. “I don’t think the triumvirate has changed all that much,” said Richard Williams, an analyst for Summit Research Partners. “Until we see clear evidence to the contrary, I think it’s natural to assume that this is all just cosmetic.”
Ellison is one of the technology industry’s most colorful figures, well-known for his obsession with yatching – particularly his quest to win the America’s Cup. In 2012, Ellison bought 98 percent of the Hawaiian island of Lanai; the AP reported that the land alone was valued at $635.4 million. He also owns several mansions, including a lavish Japanese-themed mansion in Woodside, Calif. Ellison has guided the company through competitive battles with IBM and Sybase and acquired the once-mighty Sun Microsystems. After a dispute with arch-rival SAP, he openly called its chief executive at the time, Leo Apotheker, a “thief.” In 2005, he bought rival PeopleSoft.
Outspoken and flashy, Ellison has never shied away from the limelight. After a dispute with arch-rival SAP, Ellison openly called its chief executive at the time, Leo Apotheker, a "thief." Ellison also scooped up Hurd, when the former chief executive of Hewlett-Packard was forced to resign after being accused of sexual harassment and fudging expense reports. In a letter to the New York Times, he said that “the HP board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago.”
"I really should never talk about myself," Ellison said at the All Things Digital technology conference in 2012. "Frequently I'll be interviewing somebody or in a meeting with somebody and after about 15 min they'll kind of interrupt me mid-stream and say 'Oh my God, you're nothing like I thought you'd be.' And I say, 'Oh, it's a very low bar. I didn't bite the head off a small animal during the meeting.'" More recently, Oracle has scrambled to keep up with changes in the computer business. The company has been “effectively transitioning its business to the cloud,” said Citigroup Research analyst Watler H. Pritchard in a note to investors in June after Oracle announced a $5.3 billion bid to buy MICROS Systems, a provider of hardware and software to the hospitality industry, including hotels, restarants, casinos and amusement parks.
Ellison was also one of the few vehement defenders of Hurd, the former chief executive of Hewlett-Packard who was forced out after he was accused of sexual harassment and fudging expense reports. “The H.P. board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago,” Ellison told The New York Times. “That decision nearly destroyed Apple and would have if Steve hadn’t come back and saved them.” At the same time, he said, Oracle was spending more to keep pace with the competition in applications, squeezing its lucrative profit margins.
When asked Thursday about why his role was changing in the company, Ellison did not offer further details about the timing of the announcement--and stressed that much about the executive team's roles will stay the same. The company, which has a large cash horde and steady cash flow, said Thursday that it would buy back $13 billion worth of shares in a bid to bolster the stock price and boost the earnings per share. It reported a 2.7 percent increase in revenue to $8.6 billion and earnings before certain costs of 62 cents a share.
"They deserve the recognition," Ellison said of Hurd and Catz. "They deserve the CEO title. And I'm happy that our executive management team continues forward as a team." Roberto A. Ferdman contributed to this article.