Entrenched Corporate Leaders: Larry Ellison (ORCL)

Larry Ellison of Oracle (ORCL) is essentially as entrenched as he wants to be in his role of CEO and board member.  For starters, his strategy of acquiring more and more companies has paid off and given the company a broader footprint in the software arena.  In late 2006, this stock came back into 5-year highs.  There are very few that will honestly look back to the 2000 stock prices and try to say he is not doing the job.

His competitors really don’t like him.  But they aren’t his shareholders, and Mr. Ellison doesn’t lose sleep over that.  He has acquired PeopleSoft, Retek, Siebel, plus two dozen others over the last 2+ years.  The integrations have been adding the growth engines to the top-line and there is almost a mini-incubator that the company owns as a result of all of the pet projects inside each unit and inside each of these subsidiaries that have been acquired.  He has even been able to go after SAP in recent allegations.

Outsiders can point to past fines that have been paid, extravagant lifestyles, overpriced megayachts, personally flying jets, and whatever else they want.  As long as he wants to do something, he basically can.

Even if shareholders wanted to try to gang up on Ellison, it would be more than tough.  He holds more than 1.2 Billion shares of ORCL, which is still about 19% to 21% depending on who is doing the calculations and double of what the other largest holder Capital Research & Management holds.  Ellison has yet to ever get any severe challenges to any of his recent initiatives.

It is doubtful that someone would even want to bother trying to unseat him.  He’s there as long as he wants to be.  Would you believe that he is 63 years old?  He ‘may’ have to open the company up on analyst day and at the annual shareholder meeting, but anyone not suffering from delusions of grandeur will know that those days are mere technicalities.

This is the first of a second series.  We ran a list of entrenched corporate leaders earlier this year and will be finishing the second list here this week.  As a reminder, entrenched leaders does not imply that they are loved or hated.  It means that shareholders in each of those companies have to know that they better agree with the path of management, because the shareholders almost certainly won’t be able to change management or direction.

Here were the names on the first list, and as always there is no order to the list.

Jon C. Ogg
March 27, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.