No-one puts Baby in the corner, said the movie Dirty Dancing; but someone's put Larry Ellison in a box!
Prior to NetSuite's long planned IPO, the firm has made some moves to calm investor fears about the influence that Oracle CEO Larry Ellison would have over the company when it goes public. Ellison - and his family - own the majority of the software as a service (SaaS) start-up.
Ellison plans to transfer the bulk of his holdings to a 'lockbox' company. He owns 639.3 million shares, 60 percent of the company. Those shares had been held by Tako Ventures, Ellison's private investment company. Tako's shares will be transferred to a new entity with governing provisions that 'neutralise, in certain situations,' the voting power of Ellison's shares.
This new entity cannot be dissolved as long as Ellison remains an officer of Oracle. If Ellison dies, the entity's assets will be transferred to the Ellison Medical Foundation or another designated charity.
Once NetSuite is public, Ellison will lose his contractual right to appoint NetSuite board members. On any matter that comes before shareholders, the entity will vote its shares in proportion to the voting by other stockholders.
There's one rather crucial exception to that: if the vote concerns a potential NetSuite acquisition then Ellison can still direct the vote. In other words, if anyone wants to make an offer for the firm, they need to convince Larry first.