2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 494 SignificantFiscal2018CompensationChangesinResponsetoStockholderFeedback TheCompensationCommittee engagesinrigorousdiscussionsanddeliberationsbothinternally andwithitsindependent compensation consultant about our compensation philosophy and design alternatives for our executive compensation program. Our directors also regularly seek feedback from our principal unaffiliated stockholders regarding executive compensation and related governance matters (see “Proxy Statement Summary—Stockholder Outreach and Board Responsiveness” on page 3). After considering stockholder feedback and the results of our November 2016 stockholder advisoryvoteonNEOcompensation,theCompensationCommitteehasmadesignificantchangestotheequitycomponent ofourfiscal2018executivecompensationprogram. Fiscal2018Performance-BasedStockOptions Infiscal2018,inlieuofPSUsandtime-basedstockoptions,theCompensation CommitteegrantedeachofMr.Ellison,Ms.Catz,Mr.HurdandMr.Kurianan equity award consisting entirely of performance-based stock options (PerformanceOptions)thatmaybeearnedonlyupontheattainmentofstock price,marketcapitalizationandoperationalperformancegoals.Theseawards areintendedtorepresentfiveyearsofequitycompensationandweregranted withtheexpectationthatnoadditionalequityawardswillbegrantedtothese NEOsuntil2022attheearliest. PrincipalElementsofFiscal2018 NEOCompensation • Long-termincentivecompensation consistingof 100%performance-based stockoptions • Annualperformance-basedcashbonus (nochangefromFY17) • Basesalary(nochangefromFY17) The Compensation Committee believes the Performance Options address our stockholders’ executive compensation concernsbybetteraligningpaywiththelong-terminterestsofourstockholders.Specifically: • Long-termincentivecompensationfortheseNEOsisnow100%performance-based. Payoutistiedtosignificantstock priceappreciationaswellasthesatisfactionofrigorousperformancegoalsduringafive-yearperformanceperiodthat, ifachieved,shouldresultinconsiderablestockholderreturns. • ThePerformanceOptionswillbeearnedonlyifOracleboth(1)significantlygrowsitscloudbusinessand(2)returns value to stockholders. Six of the seven Performance Option tranches may be earned only if Oracle satisfies a combination of (1) an operational performance goal tied to significant growth of Oracle’s cloud business and (2) a substantial increase in Oracle’s market capitalization. The seventh Performance Option tranche may be earned only upon growth in Oracle’s stock price. Thus, even if Oracle’s cloud business grows,the Performance Optionscannot be earned unless Oracle delivers significant value to stockholders in the form of stock price and market capitalization growth.Seethefollowingpagefordetails. • The Performance Options will result in a decrease in equity compensation value. The grant date fair value of each award granted to Mr. Ellison, Ms. Catz and Mr. Hurd is $103.7 million.* When annualized over the five-year performanceperiod,thegrantdatefairvalueofeachawardis$20.74million,a 47%decrease fromthegrantdatefair valueofeachNEO’s2017equityawards(whichconsistedofamixofPSUsandtime-basedoptions). 47%Decrease $ inMillions 40 35 30 25 20 15 10 5 FY17 FY18 FY19 FY20 FY21 FY22 Grant date fair value of FY17 PSUs and time- vesting options GrantDate FairValueof CTO and CEO Long- Term Incentive Compensation *Accountinggrantdate fairvalueof tranches thataredeemedprobableofachievement. Grant date fair value of FY18 Performance Options annualized over five years* 0 ThegrantdatefairvalueofMr.Kurian’sPerformanceOptionawardis$69.38million.*Whenannualizedoverthefive-year performance period,thegrantdatefairvalueofMr.Kurian’sawardisapproximately $13.9million,a 59%decrease from thegrantdatefairvalueofhis2017equityawards. 2017AnnualMeetingofStockholders 29 Total of 03 pages in section The F&A Committee has adopted a requirement that if an F&A Committee member wishes to serve on more than three audit committees of public companies, the member must obtain the approval of the F&A Committee, which will determine whether thedirector’sproposedserviceontheotherauditcommittee(s)willdetractfromhis/herperformanceonourF&ACommittee. DirectorTenure,BoardRefreshmentandDiversity Webelieveitisdesirabletomaintainamixoflonger-tenured,experienceddirectorsandnewerdirectorswithfreshperspectives. In furtherance of this objective, the Board elected Ms. James and Secretary Panetta as directors in fiscal 2016 and fiscal 2015, respectively. However, we do not impose director tenure limits or a mandatory retirement age. The Board has considered the concerns raised by some stockholders regarding longer-tenured directors, but believes that longer-serving directors with experienceandinstitutionalknowledgebringcriticalskillstotheboardroom.Inparticular,theBoardbelievesthatgiventhelarge size of our company, the breadth of our product offerings and the international scope of our organization, longer-tenured directors are a significant strength of the Board. The Board also believes that longer-tenured directors have a better understanding of the challenges Oracle is facing and are more comfortable speaking out and challenging management. Accordingly, while director tenure is taken into consideration when making nomination decisions, the Board believes that imposinglimitsondirectortenurewouldarbitrarilydepriveitofthevaluablecontributionsofitsmostexperiencedmembers. BoardDiversity 33% ofourBoard membersarewomen orcomefroma diversebackground TheBoardandtheGovernanceCommitteevaluediversityofbackgrounds,experience,perspectives and leadership in different fields when identifying nominees. As noted in our Corporate GovernanceGuidelines,theGovernanceCommittee,actingonbehalfoftheBoard,iscommittedto actively seeking women and minority candidates for the pool from which director candidates are chosen. Presently, 33% of our Board members are women or come from a diverse background (threeofour12Boardmembersarewomen,includingoneofourCEOs). StockholderOutreach We have a long tradition of engaging with our stockholders to solicit their views on a wide variety of issues, including corporate governance, environmentalandsocialmatters,executivecompensationandotherissues. Onaregularbasis,certainofourindependentdirectorstraveltotheU.S.East Coast for in-person meetings with a number of our large institutional stockholders at their offices. Our independent directors also hold meetings with stockholders in-person at Oracle headquarters or telephonically. Our Board believes these meetings are important because they foster a VotingRights: OneShare,OneVote Oracle has a single class of voting stock, witheachshareentitledtoonevote.Our executives, including our founder, are thus held accountable to stockholders, who have voting power in proportion to theireconomicinterestino rstock. relationship of accountability between our Board and stockholders and help us better understand and respond to our stockholders’ priorities and perspectives. In fiscal 2018, three independent directors held meetings with t n institutional stockholders representing approximately 22% of our outstanding unaffiliated shares. In fiscal 2017, four independent directors held meetings with nine institutional stockholders representing approximately 18% of our outstanding unaffiliated shares, and offeredtomeetwithstockholdersrepresentinganadditional4%ofouroutstandingunaffiliatedshares. Inaddition,aspartofourregularInvestorRelationsengagementprogram,ourexecutivedirectorsholdmeetingswithanumber ofourinstitutional stockholders throughouttheyear.Wealsoholdanannualfinancial analystmeeting atOracle OpenWorldin San Francisco where analysts are invited to hear presentations from key members of our management team, including our executive directors. In fiscal 2017, our executive directors held meetings with stockholders representing approximately 43% of ouroutstandingunaffiliatedshares.(AllpercentagescalculatedbasedondataavailableasofJune30,2017.) The feedback received from our stockholder outreach efforts is communicated to and considered by the Board, and, when appropriate,theBoardimplementschangesinresponsetostockholderfeedback.See“ProxyStatementSummary—Stockholder OutreachandBoardResponsiveness”onpage3forasummary oftherecent feedback wehavereceived fromourstockholders andourBoard’sresponsetothisfeedback. CommunicationswiththeBoard Anypersonwishingtocommunicatewithanyofourdirectors,includingourindependentdirectors,regardingOraclemaywriteto thedirector,c/otheSecretaryofOracleat500OracleParkway,Mailstop5op7,RedwoodCity,California94065,ormaysendan emailto Corporate_Secretary@oracle.com .TheSecretarywillforwardthesecommunicationsdirectlytothedirector(s)specified or,ifnoneisspecified,totheChairmanoftheBoard.Inaddition,wepresentallsuchcommunications,aswellasdraftresponses, 22 2017AnnualMeetingofStockholders NIELSEN HOLDINGS PLC ORACLE THEBOARDOFDIRECTORSANDCERTAINGOVERNANCEMATTERS How We Engage Investor Relations and Senior Management • Weprovide shareholdersandprospective investors, equityand fixed incomeanalysts, thought leaders andotherkey stakeholderswithopportunities andevents toengagewithandprovide feedback to ourBoardand seniormanagementbothduring andoutside theproxy season. Our seniormanagementparticipates in formal industry conferences,one-on-one investor meetings,andnon-deal roadshows. • To learnmoreaboutourengagementwith institutional investors,please visitour investor relationswebsiteat ir.nielsen.com . • Board Involvement • Over the last few years,ourBoardChairperson and theChairpersonofourCompensationCommittee haveparticipated in joint investor relationsand governanceengagementswith severalofour largest shareholders. Asa resultof thisoutreach,wedeliverour shareholders’ viewsand specific feedback to the Boardand seniormanagement. • Membersof the corporategovernance, investor relationsandexecutive compensationgroups discuss,amongothermatters,Company performance,emerginggovernancepractices generallyand specificallywith respect toour Company, the reasonsbehinda shareholder’s voting decisionsatpriormeetings,ourexecutive compensationpracticesandour corporate social responsibilitypractices. • Shareholder Engagement BetweenMarch2017andMarch2018we engagedwith investors representingnearly65%of our shareholderbase. Outcomes from Investor Feedback Sometangibleexamplesoftheresultsofour shareholderoutreachactivitiesinclude: • Increasedourfinancialdisclosurestohelp investorsbetterunderstandourbusiness. • Includedabroaderarrayofseniormanagement andmembersofourBoardinourengagement efforts. • Enhancedourproxystatementdisclosuresto providemoredetailabouttheassessmentsthat factorintopaydecisionsforournamedexecutive officers. • Imposedacaponpayoutsunderourlong-term performanceplaniftheCompany’stotal shareholderreturnisnegativeovertheapplicable performanceperiod. 2018PROXYSTATEMENT 15 StockholderOutreachandBoardResponsiveness We have a long tradition of engaging with our stockholders to solicit their views on a wide variety of issues, including corporategovernance,environmentalandsocialmatters,executivecompensationandotherissues. IndependentDirectorEngagement. Onaregularbasis,certainofourindependentdirectorstraveltotheU.S.EastCoastfor in-person meetings with a number of our large institutional stockholders at their offices. Our independent directors also holdmeetingswithstockholdersin-personatOracleheadquartersortelephonically.OurBoardbelievesthesemeetingsare important because they foster a relationship of accountability between our Board and stockholders and help us better understandandrespondtoourstockholders’prioritiesandperspectives. Fiscal 2018 –3 independent directors held meetings with 10 institutional stockholders representing approximately 22% of our outstandingunaffiliatedshares Fiscal 2017 –4 independent directors held meetings with 9 institutional stockholders representing approximately 18% of our outstandingunaffiliatedshares,andofferedtom etwithstockholders representinganadditional4%ofouroutstandingunaffiliatedshares Executive Director Engagement. As part of our regular Investor Relations engagement program, our executive directors holdmeetingswithanumberofourinstitutionalstockholdersthroughouttheyear.Wealsoholdanannualfinancialanalyst meeting at Oracle OpenWorld in San Francisco where analysts are invited to hear presentations fromkey members ofour management team, including our executive directors. In fiscal 2017, our executive directors held m etings with stockholders representing approximately 43% of our outstanding unaffiliated shares. (All percentages calculated b sed on dataavailableasofJune30,2017.) BoardResponsiveness. BelowisasummaryofrecentfeedbackwehavereceivedfromourstockholdersandourBoard’sresponse. WhatWeHeard OurBoard’sResponse Equityawardsshouldnotvestbasedonlyon thepassageoftime 100%ofNEOEquityCompensationGrantedinFY18isPerformance-Based . Infiscal2018,each currentlyemployednamedexecutiveofficer(NEO)receivedanequityawardconsistingentirelyof performance-based stock options (Performance Options) that may be earned only upon the attainmentofrigorousstockprice,marketcapitalizationandoperationalperformancegoalsover afive-yearperformanceperiod.Seepages29to30fordetailsonthePerformanceOptions. Performancemetricsshouldbetteralign withstockholdervalue New Rigorous Performance Goals Tied to Oracle’s Cloud Growth and Returning Value to Stockholders. SixofthesevenPerformanceOptiontranchesmaybeearnedonlyifOraclesatisfies acombinationof(1)anoperationalperformancegoaltiedtosignificantgrowthofOracle’scloud businessand(2)asubstantialincreaseinOracle’smarketcapitalization.TheseventhPerformance OptiontranchemaybeearnedonlyuponsignificantgrowthinOracle’sstockprice.Thus,evenif Oracle’s cloud business grows, the Performance Options will not vest unless Oracle delivers significantvaluetostockholdersintheformofstockpriceandmarke capitalizationgrowth. NEOcompensationishigh Significant Decrease in Equity Compensation Value. The Performance Options will result in a decrease in equity compensation value forthe currently employedNEOs.Whe the grant date fair value of the awards is annualized over the five-year performance period, it represents a 47%decrease fromfiscal2017equityawardvaluesforMr.Ellison,Ms.CatzandMr.Hurdanda 59%decrease fromfiscal2017equityawardvalueforMr.Kurian. Long-termequityawardsshouldhavea minimumthree-yearperformanceperiod Five-Year Performance Period. The Performance Options may be earned over a five-year performance period. The Performance Options were granted with the expectation that no additional equity awards will be granted to the currently employed NEOs until 2022 at the earliest. AlthoughtheBoardhasasignificant percentageofwomen,continuetofocuson Boarddiversity ActivelySeekingWomenandMinorityBoardCandidates. Infiscal2017,theBoardamendedits Corporate Governance Guidelines to affirm that the Governance Committee is committed to activelyseekingwomenandminoritycandidatesforthepoolfromwhichdirectorcandidatesare selected.Presently33%ofBoardmembersarewomenorcomefromadiversebackground.Three ofour12Boardmembersarewomen,includingoneofourCEOs. AdddirectorstotheBoardtomaintaina mixofnewandlonger-tenureddirectors Board Refreshment . The Board elected Ms. James and Secretary Panetta as directors in fiscal 2016 and fiscal 2015, respectively. The Governance Committee is continuing to meet with potentialdirectorcandidatesonanongoingbasis. Fiscal 2018 Stockholder Feedback. In our recent meetings with stockholders, we received positive feedback regarding the Performance Options and our continued stockholder engagement. Specifically, our stockholders were pleased that all equitygrantedtoourNEOsinfiscal2018was100%performance-basedwithrobustperformancego ls,andtheequitywill only be earned if stockholders also benefit. Stockholders also appreciated the reduction in equity compensation value for theNEOs. 2017AnnualMeetingofStockholders 3