Oracle’s co-CEOs got $350 million in equity awards. A year later, the stock had lost half its value
A year into the new leadership structure and the appointment of Clayton Magouyrk and Michael Sicilia, Oracle has sharply increased AI spending and cut more than 20,000 jobs as its shares fell about 58%.
A year after Clayton Magouyrk and Michael Sicilia took over as Oracle’s co-CEOs, the company has sharply increased its spending on AI infrastructure, cut more than 20,000 jobs and seen its shares fall by roughly 56%.
A proxy statement filed by Oracle on Friday, provides the clearest look yet at the extraordinary compensation packages given to the two executives when they took over. Magouyrk received a one-time equity award with a target value of $250 million, while Sicilia received an award worth $100 million at target.
The two executives replaced Safra Catz as co-CEOs on September 22, 2025. Catz, who had served as Oracle’s CEO for 11 years, became executive vice chair, while both new CEOs began reporting to the same board.
The size of the awards stands out even more in Oracle’s latest proxy statement. Under accounting rules, the grant-date fair value of Magouyrk’s award was $621.7 million, and Oracle reported his total compensation for fiscal 2026 at $627.5 million. That was 6,623 times the median compensation of Oracle’s global employees, which was $94,740.
Sicilia’s compensation was 2,709 times the median employee pay.
Most of the awards, however, have not yet been earned. Eighty percent of each package consists of stock options, with an exercise price of $308.46, based on Oracle’s closing share price on the date of the grants. Oracle’s shares ended fiscal 2026 at $225.78, leaving those options without intrinsic value at that point.
The remaining 20% consists of performance-based stock options tied to Oracle’s non-GAAP revenue. The awards begin vesting if revenue reaches $100 billion by fiscal 2028, reach full payout at $125 billion and can reach a maximum 200% payout at $250 billion.
Oracle reported $67.4 billion in non-GAAP revenue for fiscal 2026.
The company said it had made “strong first-year progress,” but noted that the awards “remain fully unearned, evidencing the rigor of the targets established.”
Oracle’s compensation committee said the packages were designed in response to “the exceptionally competitive market for proven cloud and AI leaders,” arguing that rival companies were prepared to offer large sums to attract Magouyrk and Sicilia at a critical moment for Oracle.
The leadership change came as Oracle was transforming itself into a much larger provider of cloud infrastructure for AI companies.
Oracle’s revenue rose 17% to $67.4 billion in fiscal 2026. Cloud revenue increased 39%, while cloud infrastructure revenue jumped 77% to $18.1 billion. The company ended the year with $638 billion in remaining performance obligations, a measure of contracted revenue yet to be recognized.
At the same time, Oracle dramatically increased its spending on infrastructure. The company spent $28.5 billion on capital expenditures in its latest quarter, compared with $8.5 billion a year earlier, and expects to spend $90 billion to $95 billion in fiscal 2027.
The spending has come alongside a major reduction in Oracle’s workforce. The company eliminated roughly 21,000 jobs during fiscal 2026, or about 13% of its workforce, and has begun another round of layoffs, including cuts affecting developers, infrastructure engineers and managers in its cloud infrastructure organization.
Oracle’s restructuring costs also increased by about $700 million to roughly $2.8 billion.
The stock market has not reflected Oracle’s operating growth in the same way. Oracle’s shares were trading at around $137 in late September 2026, compared with $328.15 on September 22, 2025, when Magouyrk and Sicilia were appointed. That represents a decline of roughly 58%.
Oracle acknowledged the disconnect in its proxy statement, saying that its “strong fiscal 2026 operating performance was not fully reflected in its stock price performance during the fiscal year.” The company attributed the gap to “broader investor concerns affecting the software, AI and cloud sector.”
Its own pay-versus-performance disclosure shows the same contrast. A hypothetical $100 investment in Oracle fell to $206.82 over the period covered by the disclosure, from $231.50, while the Dow Jones U.S. Technology Index rose from $172.38 to $189.86.
The leadership transition has also unfolded against legal pressure. A shareholder lawsuit filed in February 2026 and amended in July accuses Oracle and several executives and directors of making false or misleading statements about its cloud infrastructure business. Oracle has said it has meritorious defenses and intends to fight the case. The company said it expects no material financial impact from the lawsuit.
The proxy also highlights the unusual position of Oracle founder and executive chairman Lawrence Ellison, who owns 38.2% of the company. His holding includes roughly 1.16 billion shares, of which about 413 million are pledged as collateral for personal loans.
Oracle’s governance committee reviews the arrangement quarterly and has repeatedly concluded that it does not create a material risk to the company, according to the filing. The committee said it believes Ellison can repay his loans without selling the pledged shares.
The proxy also disclosed that companies in which Ellison or his son, David Ellison, have a direct interest purchased approximately $32.2 million of Oracle products and services during fiscal 2026. That included $21.97 million from the Ellison Institute.
