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| Oracle’s Larry Ellison steps down as chief executive | Oracle’s Larry Ellison steps down as chief executive |
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| 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. | 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. |
| 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 acquisition of a small Hawaiian island and a Newport, RI mansion that once belonged to the wealthy Astor family. | |
| According to the 2014 Forbes list, Ellison is the third-richest man in the United States, worth roughly $50 billion. | According to the 2014 Forbes list, Ellison is the third-richest man in the United States, worth roughly $50 billion. |
| 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. | 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. |
| 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. | 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, 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. | 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. |
| “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.” | “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. | 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.” | 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.” | 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.” |
| 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.” | 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 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. | 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. |
| 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.” | 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.” |
| 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 Walter 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, restaurants, casinos and amusement parks. | |
| At the same time, he said, Oracle was spending more to keep pace with the competition in applications, squeezing its lucrative profit margins. | At the same time, he said, Oracle was spending more to keep pace with the competition in applications, squeezing its lucrative profit margins. |
| The company, which has a large cash hoard 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. | |
| Roberto A. Ferdman contributed to this report. |