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.