The Associated Press

SAN FRANCISCO – Oracle Corp.’s (Nasdaq: ORCL) billionaire CEO Larry Ellison padded his fortune with a fiscal 2009 pay package the company valued at $84.5 million, down about $100,000 from the year before and made up mostly of stock options that haven’t vested yet.

On top of that, Ellison made $124.2 million by exercising 10 million stock options during the latest fiscal year, which ended May 31, according to the Redwood Shores, Calif.-based company’s annual proxy filing Friday with the Securities and Exchange Commission.

He took home far more from cashing out stock options the year before. Oracle’s stock price was significantly lower in the 2009 fiscal year because of the financial crisis, and Ellison cashed out fewer of options during the period than he did in the previous year. Ellison made $543.8 million exercising 36 million options in fiscal 2008.

According to calculations by The Associated Press, Oracle gave Ellison a compensation package valued at $84.6 million last year.

There was a penalty for the business software maker’s performance. Oracle said in the filing that because the company didn’t meet its "difficult" internal target for pretax profit in the latest fiscal year that Ellison and other top executives got only 40 percent of their target bonuses.

Still, Ellison, the world’s fourth-wealthiest person as ranked by Forbes magazine, was rewarded richly for a year in which Oracle’s sales grew 4 percent to $23.3 billion and profit ticked up 1 percent to $5.6 billion.

Oracle is the world’s leading database software seller, and has been aggressively expanding into other business software markets. In April it agreed to buy struggling server and software maker Sun Microsystems Inc. for $7.4 billion, a deal that cleared antitrust hurdles in the U.S. this week and is awaiting approval from European regulators.

Ellison’s salary remained unchanged at $1 million. For the current fiscal year, though, he agreed to cut his annual salary to $1, joining other Silicon Valley stars like Apple Inc. CEO Steve Jobs and Google Inc. co-founders Larry Page and Sergey Brin, who also make a buck a year in salary. They all have a large part of their fortunes tied up in big ownership stakes in their companies.

Ellison owned about 1.2 billion shares of Oracle’s stock as of Aug. 10, according to Oracle’s proxy document filed with the Securities and Exchange Commission. The stake is currently worth about $26 billion, based on Oracle’s closing stock price of $22.11 on Friday.

By comparison, Jobs owned 5.5 million shares of Apple stock as of the company’s latest proxy filing, which was in January. That’s worth about $939 million, based on Apple’s closing stock price Friday. Page and Brin each owned about 29 million shares of Google stock as of Google’s proxy filing in March. Each stake is currently worth more than $13 billion.

Ellison got additional compensation of $1.5 million, mostly for his home security.

The meatiest part of Ellison’s pay package were the 7 million stock options he received that were valued at a total of $78.4 million when they were granted July 3, 2008.

Oracle has to report that dollar figure under rules laid out by the SEC, based on a calculation of the value of the options on the day they were granted. But Oracle argued in its proxy filing that the figure is misleading, since executives can’t cash out all their options right away and the company’s stock price can fall below the options’ "exercise" price, making the options sometimes "underwater" and worth little.

Oracle said a better figure is that Ellison’s options issued in Oracle’s fiscal year 2009 were worth $3.64 million as of Aug. 10, 2009.

That figure represents the difference between the company’s closing stock price on that day – $21.25 – and the options’ exercise price – $20.73 – multiplied by the number of options. It shows the profit Ellison could have made if he were able to sell all the options that day, which he couldn’t do because the options vest over four years.

The Associated Press’ formula for calculating executive pay sometimes differs from the totals companies list in the summary compensation table of proxy statements filed with the SEC. Oracle reported that Ellison’s total compensation was worth $56.8 million.

The AP’s calculations are designed to isolate the value a company’s board placed on an executive’s total compensation package during the last fiscal year. They include salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

It doesn’t include changes in the present value of pension benefits. Those totals instead reflect the size of the accounting charge taken for an executive’s compensation in the previous fiscal year.

Oracle set the date of its annual shareholder meeting for Oct. 7.