Here’s what a look at Oracle’s numbers can tell you about the genius of Larry Ellison

Larry Ellison

Take a look at the founders of Oracle and you’ll see something extraordinary. Larry Ellison is 69 years old and still has a lot of energy, he clearly looks after himself. Ellison co-founded Oracle Corporation with Ed Oates and Bob Miner. Miner died nearly 20 years ago, he would be marginally older than Larry now, Ed apparently is a budding scale model builder with H0 scale trains (that is 1 to 87 scale). Why that number I have no idea. Clearly Ellison is still driven to make Oracle succeed, but the way he does it isn’t exactly what you’d

Why for instance Ellison sees fit to pay himself so much (his 2013 salary was US$77-million) when he owns so much of the business is a little baffling. Admittedly most of the compensation is stock-based and he did stick the most money in at the beginning, according to his Wikipedia page, investing US1 200 (1977 Dollars – out of a total of US$2 000) to establish Software Development Laboratories, the original Oracle. US$1 200 in 1977 would be US$4 549.82 today.

Then again, Ellison also owns 1 112 434 580 Oracle shares, by one measure that I saw. At the closing price that is worth US$47.289-billion. Yowsers. Even with the Oracle share price indicated down five percent and a bit at US$40.38, that stake is worth US$44.9-billion. I hardly think that Ellison is going to lose any sleep over the company that he still runs.

Now we do not have any interest in Oracle Corporation, but what I find very interesting about a whole bunch of technology titans that saw their valuations stretched during the go-go days of 1998-2000 is that many of these businesses were founded in the 1970s.

As the hardware improved, the software improved alongside at an incredibly rapid rate. And because Moore’s Law possibly still applies, we should continue to see this trend continue. Moore himself was the co-founder of Intel alongside Robert Noyce. Intel was founded in 1968, it makes sense that the big hardware manufacturers are older than the software ones.

The other thing that interests me is how an idea and a small investment of US$1 200 in 1977 turns into US$45-odd billion in 2014. This is a company that employs 120 odd thousand people and no doubt contributes handsomely to the US economy. Ellison has also joined the giving pledge to give 95 percent of his wealth when he dies to the charity founded by Bill Gates (a competitor) and Warren Buffett, whom everyone knows well. It is a moral agreement and nobody is bound by this.

Ellison is wildly wealthy and plans to give almost all of what he has made away, to help other folks. And that friends is when people appreciate money. When they work hard making it, they are strangely a lot more giving. Encouraging entrepreneurs and allowing capital to grow at a fast rate leads to adding to the national fiscus, creates jobs and opportunities and inspires many. Less state and more private enterprise, thanks very much!

It’s a pity that Oracle missed the streets number yesterday in fourth quarter numbers post the bell, but that’s largely because the analyst community was a bit heavy in its estimates. The company did not miss, the company reported what it did, the analyst community missed. Fear not, Oracle shares have risen with the rest of the market, up 25% over the last 12 months.

This article by Sasha Naryshkyine is adapted from the Vestact newsletter and republished with permission.

Image: Oracle Corporate Communications via Flickr.



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