Oracle executives' stock options lose value as shares plunge 53% in a year
Oracle disclosed that stock options granted to founder Larry Ellison and co-CEOs Clay Magouyrk and Mike Sicilia are now without intrinsic value, while new CFO Hilary Maxson’s mixed equity award retains some restricted stock units.
Oracle's latest proxy statement shows that stock options awarded to founder Larry Ellison and co-CEOs Clay Magouyrk and Mike Sicilia have become worthless after the company's share price fell to $137, a 53% decline over the past 12 months. Ellison received an option package valued at $117.8 million in October with a strike price of $280 per share. Magouyrk and Sicilia were granted options with strike prices of $308, valued at $621.7 million and $248.7 million respectively, shortly after their promotions in September 2025. The current market price is below each strike price, meaning the options would need the stock to more than double before they could be exercised profitably.
New chief financial officer Hilary Maxson, hired in April 2026, participated in Oracle's "Equity Choice Program," which lets executives allocate their equity compensation between stock options and restricted stock units (RSUs). Maxson chose to receive $10.4 million in RSUs and the remainder in options priced at $185 per share. While the RSUs have declined in value from $12.7 million to $7.7 million, the options are also out of the money.
Oracle said the size of the awards reflects competition for senior cloud and AI talent. The company’s board noted that the lack of intrinsic value in the options indicates the plan is functioning as intended, emphasizing that stock options are “strongly performance-based.”
"The Compensation Committee did not take any special actions to compensate executives for potential losses in stock option value," the proxy statement read.
Despite the share price drop, Oracle reported a 39% increase in cloud revenue to $34 billion and a 77% rise in cloud infrastructure revenue to $18.1 billion for fiscal 2026, with overall revenue up 17% to $67.4 billion. However, the 10-K disclosed a negative free cash flow of $23.7 billion and the company sold $43 billion of senior notes and $20 billion of stock during the year.
All three senior executives received cash bonuses of $4.9 million, and Ellison’s base salary was increased to $950,000, matching that of Magouyrk and Sicilia. Oracle employees have faced layoffs, and the median total compensation for global staff fell to $94,740 in fiscal 2026.
Shareholders are scheduled to vote on the compensation plan on November 18.