Larry Ellison is ceding the driver's seat at Oracle while keeping one hand on wheel.
The software giant's founder is stepping down as chief executive officer, but his 25 percent stake in the company - and dual role as chairman and chief technology officer - ensure he's far from relinquishing control.
Splitting his former job between two executives could, however, lead to a bumpy transition.
Oracle and Ellison are difficult to untangle. The larger-than-life founder has imbued his creation with his own combative personality.
Rivals are disparaged, or simply bought: The company spent more than $40 billion on acquisitions over the past decade.
Sometimes the ties between the two have seemed too close. Shareholders rejected Ellison's outsized pay package two years in a row in non-binding votes.
And companies he controls have leased airplanes and sold software and advertising to Oracle. Investors can't really complain, though, since Oracle's stock has quadrupled over the past decade.
Unfortunately, companies often struggle when iconic founders step down. Apple, for example, nearly went bust after Steve Jobs was kicked out - though it soared again upon his return. Dell and Starbucks went through similarly harrowing experiences.
Such turbulence at Oracle is unlikely.
Ellison will retain control of the company's guts: engineering and technology.
He will also be executive chairman, And since he still owns a quarter of the company, the board will not be a democracy in any meaningful sense.
Current executives Mark Hurd and Safra Catz will provide at least temporary stability by sharing the CEO role.
Hurd will continue to run sales and marketing, while Catz will remain in control of finance, legal and manufacturing.
Ellison is 70, however, and a succession plan may exist. If not, there's a risk that the co-CEO arrangement will end up in a costly power struggle.
That's one potential pothole he'll want to maneuver around before handing over the keys.
Context news
- Oracle announced on Sept. 18 that Larry Ellison has stepped down as chief executive officer. The software company's founder has been elected executive chairman of the board and appointed chief technology officer.
- Safra Catz and Mark Hurd were named co-chief executives. Catz will be in charge of all manufacturing, finance and legal activities. Hurd will control sales, service and vertical industry global business units. All software and hardware engineering functions will report to Ellison.
- Separately, Oracle announced revenue of $8.6 billion in the quarter ended Aug. 31. That's an increase of 3 percent from the same period last year. Net income was flat at $2.2 billion.
- The company's board also announced that it had authorized the repurchase of up to $13 billion of stock.
(Editing by Reynolds Holding and Katrina Hamlin)
