Oracle's Ellison gives up $500m to settle Pillar Data Systems claim

Summary:Oracle CEO Larry Ellison has agreed to give up a potential payout of around $500 million to settle conflict of interest accusations over the purchase of Pillar Data Systems.

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Credit: Jack Clark/ ZDNet

Oracle Chief Executive Larry Ellison has agreed to give up a payout reaching potentially $500 million to settle a dispute based around conflict of interest when Oracle purchased a firm that he controlled.

In 2011, Oracle agreed to purchase Pillar Data Systems. The company was majority owned by Oracle's chief executive, founded in 2005 and Ellison contributed $150m personally to kick-start the firm.

Rather than paying cash up-front, Oracle agreed to buy the data storage company through future payments decided based on Pillar Data Systems' performance until 2014. At part of the deal, Ellison would receive the first $562 million of any payment related to the acquisition, according to court documents viewed by Reuters.

However, the suit against the acquisition -- launched by shareholders and pension funds the City of Roseville Employees' Retirement System and the Southeastern Pennsylvania Transportation Authority -- says that the deal was "tainted by conflicts of interest and was unfair to Oracle." At a hearing in August last year, questions were raised as to whether "it was a legitimate deal and whether somebody could have gotten a better deal."

As a result, Ellison -- who owns a 55 percent stake in San Jose, California-based Pillar -- will be required to keep only five percent of the total ultimate payment.

In 2012, Ellison was one of the most well-paid CEOs worldwide.

Topics: Oracle, Tech Industry

About

Charlie Osborne, a medical anthropologist who studied at the University of Kent, UK, is a journalist, freelance photographer and former teacher. She has spent years travelling and working across Europe and the Middle East as a teacher, and has been involved in the running of businesses ranging from media and events to B2B sales. Charli... Full Bio

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