Oracle Gave Larry Ellison and His Co-CEOs Nearly $1 Billion in Stock Options. By Year End, Every Single One Was Underwater

Oracle’s latest pay story comes with a brutal twist: the company handed co-founder Larry Ellison and newly minted co-CEOs Clay Magouyrk and Mike Sicilia stock option packages worth a combined $988 million in fiscal 2026, then watched every grant sink below water by the May 31, 2026 fiscal year end. That downside landed despite a year when Oracle’s cloud business boomed and the stock logged a 38% total return. In a proxy statement published on 9/25/2026, Oracle said the awards “had no intrinsic value” at year end, underscoring how fast the math can flip when a strike price meets a stock chart that refuses to cooperate.

One of the stranger corporate scorecards this month comes from Oracle, where a nearly billion-dollar executive pay bet wound up worth exactly nothing by the time the books closed. The detail popped out of recent coverage by Fortune, and it captures a familiar tech tension: rewarding leaders for a strong run, then watching the market move the other way.

A billion-dollar bet turns sour

In fiscal 2026, Oracle awarded stock option packages with a combined grant-date value of $988 million to co-founder Larry Ellison and newly promoted co-CEOs Clay Magouyrk and Mike Sicilia. The grants followed a year when Oracle’s cloud business boomed and the stock delivered a 38% total return. But by the fiscal year end on May 31, 2026, every one of those options was underwater.

Oracle’s proxy statement, published September 25, 2026, put it bluntly: the options “had no intrinsic value.” That line, tucked inside Form DEF 14A, is the kind of compensation footnote that reads like a market verdict, not a pay plan.

Two new CEOs, and the price of optimism

The packages trace back to a leadership reshuffle in September 2025, when Oracle promoted Magouyrk, 39, and Sicilia, 54, to co-CEOs, succeeding Safra Catz, who stayed on as executive vice chair. Catz called the pairing “a match made in heaven,” a line that made sense in the moment, with cloud momentum behind them.

Just days after the promotions, Magouyrk received an option package valued at $621.7 million and Sicilia received $248.7 million. Ellison’s own option award arrived in October 2025, valued at $117.8 million when granted, with a $280 strike price. The co-CEOs’ exercise price was set at $308, high enough that the stock’s next year would matter a lot.

A brutal reset in the stock, and in sentiment

By June 26, 2026, Oracle shares logged their steepest weekly drop since August 2001, falling 19% amid investor worries about AI financing and the company’s balance sheet. CNBC tied that slide to swelling spending and scrutiny over how quickly the math could work. The moment is preserved in the week ending June 26, 2026.

On September 25, 2026, Oracle stock closed at $137, down 53% over the prior 12 months. During 2026, it swung from a 52-week high of $341.82 to a low of $114.50, which helps explain how quickly those lofty strike prices turned into dead weight.

The bill for building cloud and AI

Underneath the stock chart sat a spending surge: Oracle’s capital expenditures rose 162% to nearly $56 billion in fiscal 2026. By the end of May 2026, it reported almost $24 billion in negative free cash flow and about $130 billion in debt, a combination that can make Wall Street impatient even when the product roadmap looks ambitious.

The strain was not limited to the C-suite. Oracle reported median employee compensation of $94,740 in fiscal 2026, down from $98,899 in fiscal 2025, alongside layoffs and a broader reality that many company-wide options were underwater too.