ORCL » Topics » STATEMENT IN OPPOSITION TO STOCKHOLDER ADVISORY VOTE PROPOSAL

This excerpt taken from the ORCL DEF 14A filed Aug 21, 2009.

STATEMENT IN OPPOSITION TO STOCKHOLDER ADVISORY VOTE PROPOSAL

We oppose adoption of the Advisory Vote Proposal because we believe that a retroactive advisory vote on executive compensation would provide an ineffective and potentially counter-productive means for our stockholders to express their views on this important subject. Consistent with this belief, holders of only approximately 22.9% of our outstanding common stock voted in favor of this identical proposal when it was presented last year.

Oracle is committed to director accountability in setting executive compensation and has implemented policies, practices and procedures in support of that commitment. Our Compensation Committee, which consists entirely of well-informed, experienced and independent directors, meets regularly to review and set executive compensation. In fiscal 2009, the Compensation Committee met 16 times with 100% attendance by the members of the committee. The Committee also retains an outside compensation consulting firm and regularly seeks its advice and assistance as part of the Committee’s review and approval process. As described in the “Executive Compensation – Compensation Discussion & Analysis” section of this proxy statement, the objectives of our compensation program are to attract and retain highly talented and productive executives, provide incentives for superior performance, and align the interests of our executive officers with those of our stockholders. We believe that our Compensation Committee is in the best position to assess these matters and to make an informed judgment as to which practices and procedures are most likely to promote the interests of Oracle and our stockholders.

In addition, as described under the “Corporate Governance” section of this proxy statement, we have established direct lines of communication between our stockholders and members of the Board of Directors (including members of the Compensation Committee) through which our stockholders can provide specific input on all of our practices and procedures, including executive compensation. We believe these factors are of greater benefit than any provided by the retroactive Advisory Vote Proposal.

We believe that the Advisory Vote Proposal may also be contrary to the best interests of our stockholders. Our results-oriented executive compensation program seeks to attract, motivate and retain talented and productive executives in a competitive industry. A range of complex factors influences the determination of executive compensation. It is important that the Compensation Committee retains the flexibility to design incentive programs that appropriately balance these influences and we believe that the Advisory Vote Proposal could constrain their ability to do so. A retrospective “yes” or “no” advisory vote is a relatively blunt and ineffective mechanism for registering stockholder concerns and would not provide any meaningful insight into specific stockholder views. We believe that direct communication between stockholders and the Board of Directors is a more effective method of expressing support or criticism of our executive compensation practices, as it allows stockholders to voice specific observations and provide meaningful input.

The Compensation Committee exercises considerable care and discipline in determining and disclosing executive compensation and remains committed to doing so in the future. We also seek to provide clear and concise disclosure regarding our executive compensation program and philosophy. We do not believe the advisory vote called for by this proposal would enhance our governance practices, improve communication with stockholders or affect the content of our disclosures regarding executive compensation. In fact, we believe such an advisory vote will run counter to the best interests of our stockholders by constraining our efforts to attract, motivate and retain talented and productive executive officers focused on improving our long-term performance.

Finally, this Advisory Vote Proposal is the subject of proposed legislation by the federal government. Adopting and implementing this proposal in advance of final legislation would be premature.

For the reasons set forth above, the Board of Directors unanimously recommends a vote AGAINST adoption of the Advisory Vote Proposal.

 

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