By Noel Randewich
SAN FRANCISCO (Reuters) - A majority of shareholders opposed Oracle Corp Chief Executive Larry Ellison's pay in a non-binding vote on Thursday following complaints that the world's third-richest man makes too much as his company struggles against smaller rivals.
The vote against Oracle's executive compensation policy adds to a similar defeat at last year's meeting, and while it requires no changes from the company, it underscores concern among shareholders about high pay in the face of lackluster financial performance.
Challenges to the 69-year old Ellison's pay package come as the world's No. 2 software maker, which he co-founded four decades ago, tries to fend off smaller, aggressive companies offering software and Internet-based products at prices that often undercut Oracle. Ellison owns about 25 percent of Oracle.
A majority of shareholders voted in support of Oracle's directors, including those on the board's compensation committee - Bruce Chizen, George Conrades and Naomi Seligman. That vote was also non-binding.
In an initial tally, more than 1 billion votes were cast in favor of Oracle's executive compensation and more than 2 billion were against. Oracle said figures for the votes on board members were not yet available.
Major investment advisory groups like CtW Investment Group, which advises union pension funds, had urged shareholders to vote against Oracle's executive pay and the directors on the compensation committee.
CtW estimated that excluding Ellison's shares, close to 85 percent of voted shares were against Oracle's executive pay.
"The ball's in their court," said CtW analyst Michael Pryce-Jones. "They've had two consecutive years of defeats on say-on-pay and so far they've shown an absolute disregard for investor concerns on the issue."
Ellison gave up an annual cash bonus of $1.2 million for fiscal 2013, which ended in May, after Oracle missed growth targets and his annual salary is a token $1. But he took home stock options value at about $77 million.
Oracle's revenue failed to grow in fiscal 2013 and its net profit grew 3.5 percent during that time. During that 12-month period, Oracle's stock rose 27.5 percent, compared to a 24 percent increase in the Standard & Poor's 500 index.
Last year, Oracle's pay for top executives won support from just 41 percent of votes cast.
Oracle said its executive compensation is aimed at driving financial performance and the company's long-term stock price.
"Our existing executive compensation program achieves an appropriate balance between encouraging our senior executives to take actions that are consistent with our business strategy ... and discouraging executives from taking inappropriate or unnecessary risks," Chairman Jeffrey Henley said after the vote.
CtW has complained that Oracle's executive pay far exceeds technology peers like International Business Machines Corp and Cisco Systems Inc.
Institutional Shareholder Services, the largest advisor for institutional investors, had also recommended a vote against the company's executive pay and eight of Oracle's 11 board members, saying board members failed to effectively oversee management in areas like executive pay.
Rival proxy advisor Glass, Lewis & Co has also recommended votes "against" Oracle's executive pay and "withhold" votes against five directors.
Over the past 12 months, Oracle's stock has gained 9 percent compared to the S&P 500's rise of 25 percent.
On Thursday, Oracle's stock was up 0.45 percent at $33.68.
(Reporting by Noel Randewich; Editing by Jeffrey Benkoe, Kenneth Barry and Richard Chang)