In 2012, the average chief executive officer earned as much as a thousand of his employees combined.
Because of this, the Securities and Exchange commission proposed a new rule in September that would require all public companies to disclose the ratio of CEO pay to the median pay of their employees.
But shareholders of the world's second largest software company Oracle are more concerned with the ratio of their CEO's compensation to that of other CEOs.
For the second year in a row, they claim Oracle President and Chief Executive Larry Ellison demands too much money.
At the annual shareholder meeting this week, the approximately $78 million compensation package for Ellison was rejected. It's a repeat of the events of last year's shareholder meeting, where Ellison's pay was rejected, but the widespread dissent went unheeded.
Prior to this year's meeting, the Change to Win Investment Group advised shareholders to again vote down Ellison's Say on Pay proposal because, among other things, they make Oracle extremely top-heavy.
But the group seemed most concerned with the fact that Ellison makes far more money than any company Oracle competes against, and has done so since 2008..
According to a communique from CtW, Ellison gets approximately three to four times more than any other CEO in the field, and named executive positions within Oracle receive similar privileged treatment. In 2012, named executive salaries totaled $253 million, second only to Apple.
The problem, CtW says, is that this exorbitant executive pay is not justified by extraordinary performance or big shareholder returns.
Quite the contrary, Oracle shareholder returns barely hit the median levels for the past five years, and in the last two years, they've fallen below. Furthermore, Oracle's long-term outlook is slowing, as its customers examine cheaper cloud alternatives to on-premise software deployments. Last quarter, Oracle fell below profit projections, reporting $9.1 billion in revenue instead of the expected $9.37 billion.
CtW is comprised of unions that represent more than 5.5 million members, with the interest of preserving the long-term health of union pension plans. It opposes the use of stock options to pay Oracle executives and wants the company to appoint a Compensation Committee director over the next year, who will oversee these affairs.
These desires were upheld by CalSTRS investments, PGGM Investments, and RPMI Railpen Investments, who said the board of Oracle was "failing in its duties to shareholders" by endorsing a pay structure that a majority of non-insider shareholders voted against.
Ellison co-founded Oracle 36 years ago, it is still very much "his" company, but the bottom line is that funneling profits into executive salaries doesn't make a company any more relevant or competitive, epsecially when the long-term value of enterprise software comes from the engineering and support staff.