Larry Ellison Boosts Oracle Credit Line to $9.9 Billion

By Caleb Melby and Laura Marcinek

Billionaire Larry Ellison has increased the amount of Oracle Corp. (ORCL) stock pledged against personal indebtedness and lines of credit to $9.9 billion, or 5.6 percent of the market capitalization of the world’s largest database company.
Ellison holds 250 million shares of the Redwood City, California-based software maker as collateral, according to the company’s proxy statement released Sept. 23. That compares to 215 million shares last year and 139 million in 2012.
“With interest rates on loans so low right now, would I rather sell some investments I have and give up the return on those, or would I rather get a loan?” Tim Steffen, director of financial planning at Robert W. Baird & Co., said in a phone interview. “And he’s not going to sell his vacation home to go and make another investment.”
Ellison, who has a net worth of $43.1 billion, according to the
Bloomberg Billionaires Index, is known for his profligate spending. He built a sprawling Japanese-inspired home in Silicon Valley, scooped up swaths of land in Malibu and, in 2012, purchased Lanai, the sixth-largest Hawaiian island.
He also sponsors the U.S.’s America’s Cup team, which won the sailing competition last year. The catamarans for the race cost about $8 million to build, and Oracle Team USA and its three challengers this year could’ve spent more than $100 million each on their boats, crew, facilities and support staff, Gary Jobson, a sailor who won the Cup in 1977, said last year.

Photographer: David Paul Morris/Bloomberg

Billionaire Larry Ellison holds 250 million shares of Oracle Corp. as collateral,... Read More

Redstone, Musk

Ellison is stepping down as Oracle chief executive officer to become chairman and chief technology officer. The company named Mark Hurd and Safra Catz, who were previously co-presidents, co-CEOs on Sept. 18.
Deborah Hellinger, a spokeswoman for Oracle, declined to comment on Ellison’s collateralized shares.
Billionaires including Sumner Redstone, the chairman of Viacom Inc., and Tesla Motors Inc. co-founder Elon Musk also use shares to secure personal debt. Musk has pledged at least 10 million Tesla shares as collateral, valued at $2.53 billion as of yesterday’s closing price, according to the company’s proxy statement.
Redstone controls some CBS Corp. and Viacom shares through National Amusements Inc., which owns Showcase Cinemas. Some of those shares are pledged to lenders of a National Amusements subsidiary, according to filings from the two New York-based companies.

Shareholder Rejections

Oracle paid Ellison $67.3 million in fiscal 2014, including an option award valued at $65 million, according to the proxy. The company will cut Ellison’s stock-option grant from 7 million shares to 2.25 million in its next fiscal year, according to the filing. The reduction follows two consecutive shareholder rejections of Oracle’s executive pay plan in annual non-binding votes.