Oracle’s $1B Stock Options Ended Underwater by Year End
Oracle’s nearly $1 billion option grants to Ellison and co-CEOs ended the year underwater despite a strong stock run
Oracle disclosed that stock option packages awarded to co-founder Larry Ellison and newly appointed co-CEOs Clay Magouyrk and Mike Sicilia—worth a combined $988 million on the grant date—finished Oracle’s fiscal 2026 with no intrinsic value.
In its Sept. 25 proxy filing, Oracle said the options were “underwater” as of the fiscal year-end on May 31, meaning Oracle’s share price was below the options’ strike prices. The outcome stood out because Oracle’s shares posted a 38% total return during the fiscal year, even as the options still ended the period out of the money.
Ellison’s option package had a grant-date value of $117.8 million with a $280 strike price. Magouyrk and Sicilia received option awards valued at $621.7 million and $248.7 million, respectively, each with a $308 strike price following their promotions in September 2025.
The proxy also detailed that, despite the options being underwater at year-end, all three executives received $4.9 million in cash bonuses. Ellison’s base salary rose from $1 to $950,000, matching the base salary listed for Magouyrk and Sicilia.
Oracle’s fiscal 2026 results showed significant operating momentum in cloud alongside cash flow pressure:
- Cloud revenue rose 39% to $34 billion
- Total revenue increased 17% to $67.4 billion
- Free cash flow was negative $23.7 billion
Oracle also highlighted a newer approach to equity compensation introduced in fiscal 2026. Newly appointed Chief Financial Officer Hilary Maxson, who joined in April 2026, opted into the company’s “Equity Choice Program,” which allows executives to receive time-based equity as 100% stock options, 100% restricted stock units (RSUs), or a 50-50 mix.
The disclosures arrive as shareholders are set to vote on Oracle’s pay plan on Nov. 18, putting executive incentives and the structure of equity awards in focus—particularly in a year where large option grants ended with no intrinsic value at the fiscal year close.
