Oracle's Execs Working Under Highly Leveraged Bonus Plans


Oracle is moving its CEOs (Hurd and Katz) and Founder/CTO (Ellison) to a 100% results-based incentive program.

Their bonuses will be dependent upon raising Oracle's stock from $50 to $80 and quadrupling Cloud sales this year. (Oracle’s fiscal year ends in May.) These are people who want to get paid – a lot, so you can expect that they will do everything possible to achieve these targets.

The easiest way to achieve this would probably be to do the second thing first (i.e. blow out their Cloud sales), because by doing this, the stock price will automatically rise.

Pushing Cloud is not a new thing for Oracle, but I think we can expect Oracle to offer even stronger incentives for customers to move to Cloud even on a temporary basis to pump these numbers. 

We already are seeing one way they are growing Cloud participation is by offering deep discounts in traditional offerings (like JD Edwards or EBS) for clients who buy Cloud as an add-on.  (These discounts are available even to use Cloud on a limited basis.)