Oracle founder Larry Ellison and co-chief executives Clay Magouyrk and Mike Sicilia were granted stock options in fiscal 2026 with a combined grant-date fair value of nearly $1 billion, according to Fortune. By the end of the fiscal year, however, all of those awards were out of the money after Oracle shares pulled back sharply from earlier highs.
Option awards totaled about $988 million
Oracle’s latest regulatory filing showed grant-date fair values of $117.8 million for Ellison, $621.7 million for Magouyrk, and $248.7 million for Sicilia in fiscal 2026. That brought the combined value of the three awards to about $988 million.
Ellison’s options carried a strike price of $280 per share. The two co-CEOs received options with a strike price of $308. With Oracle stock falling to around $137 from a previous high, down more than 50%, the intrinsic value of those options had dropped to zero by the close of fiscal 2026, meaning none of the three executives could exercise them.
Cloud growth remained strong, but cash flow turned negative
Oracle reported fiscal 2026 revenue of $67.4 billion, up 17% from a year earlier. Oracle Cloud Infrastructure, or OCI, posted revenue of $18.1 billion, up 77% year over year.
Remaining performance obligations rose from $138 billion in the prior-year period to $638 billion. Still, the company’s spending surged as it expanded AI capacity and data centers. Capital expenditures reached $55.7 billion for the full year, and free cash flow turned negative $23.7 billion. Oracle also met funding needs through $43 billion in senior notes and an equity raise.
Board defended the pay structure ahead of shareholder vote
Oracle’s compensation committee said the fact that the options currently have no realizable exercise value shows the structure is working as intended. In its view, senior executives benefit only when they create excess value for shareholders. The company said it did not provide any additional compensation to offset the decline in option value.
Shareholders are expected to hold an advisory vote on the compensation package at Oracle’s annual meeting on Nov. 18, 2026.
Median employee pay slipped, and Ellison’s pledged shares were disclosed
Oracle’s global median employee pay fell from $98,899 in the previous fiscal year to $94,740.
The proxy filing also disclosed that Ellison had pledged about 413 million Oracle common shares as collateral for personal external financing. After review, the board said the arrangement did not pose a material risk to the company’s operations.