Oracle Said to Delay Decision to Name Successor to Mark Hurd

Hurd, Oracle's chief salesman, died in October after taking a short medical leave.

By Nico Grant, Bloomberg | Updated: 20 November 2019 14:09 IST

Oracle Said to Delay Decision to Name Successor to Mark Hurd

A month after the death of Chief Executive Officer Mark Hurd, Oracle's succession plan is to leave control in the hands of Chairman Larry Ellison and Hurd's fellow CEO Safra Catz while an internal successor is groomed, people familiar with the matter said.

While Ellison has put forth five candidates, none has emerged quickly as the front-runner to join Catz as CEO, and the company is likely to appoint someone president first - or at least give that executive more time to grow into the role, said the people, who asked not to be identified discussing the company's private deliberations. Oracle has considered promoting an executive with product or technical experience, one of the people said.

Hurd, Oracle's chief salesman, died in October after taking a short medical leave. Ellison, 75, and Catz, 57, have said they are splitting Hurd's duties. In September, Ellison promised to give five names to Oracle's board of executives who could one day be a "next-gen" CEO. He name-checked Steve Miranda, 50, executive vice president of applications development, and Don Johnson, EVP of Oracle Cloud Infrastructure, as leaders who would grow over time.

Ellison, who also serves as technology chief, said at that time that the software maker would be in no rush to directly replace Hurd, and Oracle remains committed to taking a slow approach, said the people.

The software maker has had only three chief executive officers in its 42-year history. Ellison presided over the company for decades before stepping down in 2014, when he was succeeded by Catz and Hurd. The latter two served as presidents before sharing the top job. Currently, Oracle doesn't have any presidents. Ellison's desire to promote from within makes it likely the next person appointed to be CEO will first serve as a president.

"We should have people in the company that are capable of being promoted into that position," Ellison said at a meeting with financial analysts in September. "So when there is this succession, it's not rushing out and doing a search. It's knowing we have these assets that are familiar with the company, familiar with the personnel."

While there's no current rush in naming a CEO, Oracle could accelerate the appointment should the right candidate emerge, the people said. Ellison may be asked about a successor to Hurd at Tuesday's annual shareholder meeting at Oracle's headquarters in Redwood City, California.

Amid Catz's aversion to public speaking and media interviews, and Ellison's limited public appearances, Hurd played a special role in Oracle's C-suite. The usually outgoing executive oversaw sales and regularly met with big corporate customers who spent tens of millions of dollars on Oracle's collection of software programs. He frequently outlined the company's vision in meetings with the press and on television.

"Mark Hurd loved sales and he loved the deal," Pat Walravens, an analyst at JMP Securities, said in an interview. "Because of that, he ended up touching so much of Oracle. That's what they need in a successor. Safra's got the operations. You need somebody who loves sales and is really good at it."

The management succession issue comes at an important time for Oracle. Fiscal-year revenue has increased an average of less than 1 percent annually in the past five years as Oracle has transitioned to cloud-based computing. The company's sales have declined year-over-year for two of the past four quarters and analysts project growth of just 1.4 percent in fiscal 2020. Still, investors appear satisfied-the company's shares have gained about 25 percent this year, matching the rise of the S&P 500.

Ellison has placed great trust in Oracle's product executives, describing some of them as "people who are really running the company." Besides Miranda and Johnson, Ed Screven, 55, Oracle's chief corporate architect who ensures products are consistent with the company's strategy; Andy Mendelsohn, the EVP in charge of database server technologies; and Juan Loaiza, EVP of mission-critical database technologies, are senior leaders who are well-regarded by Ellison, said people familiar with the matter, who asked not to be identified discussing his thinking. Many of the executives have proven their loyalty to the boss by staying at Oracle for decades, since it was a much smaller business, but they're seen as lacking Hurd's panache and charisma, the people added.

By contrast, Loïc Le Guisquet, the chairman for Europe, Middle East, and Africa, Asia Pacific and Japan, has sales experience and oversees a sprawling portion of the company's business. Le Guisquet is set to be promoted to a new global role, said one of the people, but his new title couldn't be confirmed. Oracle didn't respond to a request for comment on its succession plans.

Given Ellison's second title as Oracle's CTO, and his ownership of a third of the business, he would almost certainly retain veto power over product decisions as long as he remains at the company.

Thomas Kurian was seen as an heir to Ellison as the company's president of product development until he left in September 2018 after an acrimonious split with the billionaire chairman, Bloomberg News has reported. Kurian is now CEO of Alphabet's Google Cloud Platform. Rather than replace Kurian directly, Ellison has largely absorbed his responsibilities and now oversees the executives who reported to Kurian.

If Oracle seeks a candidate other than Le Guisquet with more of Hurd's skills, it has other strong options, the people said. David Donatelli, 54, Oracle's EVP of the cloud business group, leads sales and marketing strategy for the company's cloud efforts and was one of Hurd's deputies. Rich Geraffo, 56, the EVP of a multibillion-dollar part of Oracle's North American sales organization, also used to answer to Hurd.

"We think we're in pretty good shape," Ellison said in September. "We've got quality and quantity in our management team. These people are all slightly younger than I am. So I think hopefully they're going to be around a long time."

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