Oracle CEO Larry Ellison, the sixth richest man in the world, got a nice boost in his annual compensation during the Redwood City tech giant’s last fiscal year.

The company’s directors  increased his annual compensation from $77.559 million in fiscal 2011 to $96.16 million in fiscal 2012, according to a regulatory filing by the company on Friday.

Ellison, whose net worth has been pegged at $41 billion by Forbes Magazine, warranted every penny of his added compensation, which primarily involves stock options, according to the filing.

Noting his “active and vital role in our operations, strategy and growth,” the board called Ellison “vital to our success going forward.”

I had to rub my eyes when someone passed along a link to this story on Tuesday:

Has the world gone made? Was this a hoax?

Just listen to this madness from the Post story:

“A coalition of blue-chip companies on Monday endorsed the idea of voluntarily overhauling executive compensation practices in an effort to restore public confidence in corporate America and to get out ahead of potentially more burdensome rules that could emerge from Washington.

Pay practices such as huge severance payments, personal use of corporate jets and incentives not tied to long-term performance should vanish unless a specific justification exists, according to a task force convened by the business organization the Conference Board.”

Now this is either a radical change of heart, or a phony attempt to head off attempts by the federal government to impose more harsh guidelines. Let’s take a closer look: According the Post story:

“Early supporters of the overhaul initiative include AT&T, Hewlett-Packard, Tyco and Cisco, as well as investors such as the California State Teachers’ Retirement System.”

Now, CALSTRS I can see. But HP? Cisco?

The report was issued by the Conference Board, a pro-business organization. The full report is here. According to the report:

“The Conference Board convened the Task Force on Executive Compensation in March 2009 to address the loss of public trust in the processes for oversight of executive compensation.”

Loss of trust? No! Say it ain’t so!

Here’s the problem, according to the task force:

“In retrospect, executive compensation governance and disclosure reforms implemented earlier in the decade may have changed “too little, too late” and the current public demand for change has effectively eliminated the option for executive pay practices to gradually evolve, as boards explore and test
alternatives over time. Regardless of whether the recent executive pay issues are concentrated in the financial services industry, the task force believes that public corporations and directors are at a crossroads with respect to executive compensation. In order to restore trust in the ability of boards
of directors to oversee executive compensation, immediate and credible action must be taken.”

Too little, too late. Agreed. But how to fix it? Ah, therein lies the rub. And task force is clear that this won’t be fixed by a bunch of pesky rules:

“The task force recognizes that a ‘rules-based’ approach cannot provide the essential flexibility required to accommodate the disparate industries, strategies, business models, and stages of development represented in the more than 12,000 U.S. public companies.”

Instead of rules, there are principles:

1. A significant portion of pay should be incentivecompensation, with payouts demonstrably tied to performance and paid only when performance
   can be reasonably assessed.
2. Total compensation should be attractive to executives, affordable for the company, proportional to the executive’s contribution, and fair to shareholders and employees, while providing payouts that are clearly aligned with actual performance.
3. Companies should avoid controversial pay practices, unless special justification is present.
4. Compensation committees should be independent, experienced,
   and knowledgeable about the company’s business.
5. Compensation programs should be transparent, understandable, and effectively
   communicated to shareholders.

The third one is really the most interesting here because it specifically suggests eliminating a number of the more outrageous pay practices:

• Multi-year employment agreements providing for generous severance payments
• Overly generous golden parachute payments or benefits
• Gross-ups for tax consequences of parachute payments or perquisites
• Golden coffins
• Perquisites or executive benefits that are not generally available to other managers
• Stock option repricings or restructurings that are not value neutral, nor approved by shareholders

Now, when reporters or shareholders are complaining about these things, we can point to their business allies and say, “Hey, we’re not crazy here.”

The problem with the other four principles is essentially the same. If I were to suggest these to most boards, they’d probably reply that they already follow these guidelines. Most proxies, when detailing executive pay, assert that the pay or the benefits are necessary to align the manager’s interests with shareholders, and they are tied to performance. Often, companies have a system for measuring performance, but will junk it from time to time when they believe circumstances call for it.

And most companies probably feel burdened by the SEC’s rules that called for more straightforward reporting of compensation. That didn’t solve the problem of transparency.

So yes, there need to be rules. And more importantly, there needs to be penalties. The voluntary solution won’t quite cut it.

But let me at least applaud the task force for acknowledging the problem and the need to fix it. They say that’s the first step, right? But in this case, it’s only a first step.

Salaries of the executive officers at Atheros Communications, which were reduced Feb. 1 in a cost saving measure, were restored Monday by the board’s compensation committee. Chief Executive Craig Barratt, who had his annual salary cut 40 percent to $204,000, will now be paid at an annual rate of $340,000. Other executives, who had their salaries cut 20 percent, also had their pay raised back to 2008 levels.

The committee re-evaluated the salary reductions light of better-than-expected results Atheros announced yesterday for its 2009 second quarter, and for its third quarter forecast earnings of from 29 to 31 cents a share, significantly higher than the 17 cents average analyst estimate in a Thomson Reuters survey were expecting. Shares of Atheros popped today, rising $1.83, or 8.1 percent, to close at $24.35.

It is certainly a welcome relief for the company, whose CEO warned in December that the “economic environment deteriorated significantly throughout the (2008) fourth quarter and consumer demand across multiple geographies weakened.”

Hansen Medical extended for a second month the guaranteed monthly bonus of $16,667 it pays to its senior vice president of commercial operations, Christopher Sells, in addition to his $275,000 annual salary.

When Sells was first hired in June 2008, the company offered him a $50,000 signing bonus and the $16,667 guaranteed monthly bonus through the end of the year in order to attract him from Aesthera, a maker of laser technology used for “aesthetic” medical treatments. The guaranteed bonus was offered “in lieu of a sales commission plan” at Hansen, which sells robotic surgical tools and is “still in the early stages of (its) commercial launch.”

The bonus was extended by six months through June 30 of this year. On July 16, the board’s compensation committee extended the guaranteed bonus payments through the end of 2009.

Raise your hand if you recently quit your job and in the process got a severance package that was bigger than what you’d have gotten if you were let go by your employer?

Avistar Communications, the San Mateo company that was delisted from the Nasdaq stock market last month, reported today that Simon Moss “resigned voluntarily” as its chief executive on July 8 after a little more than a year and a half at the helm of the maker of desktop videoconferencing and collaboration tools.

When he was promoted from division president to CEO in January 2008, Moss and the company agreed that if were terminated without cause, his severance would include six months of salary, six months worth of continued life insurance and health coverage, a pro-rated amount of any projected bonus for the year, and six months of additional time in which to exercise his vested options.

For quitting, however, Moss is walking away with roughly twice that amount.

According to the separation agreement struck between Moss and Avistar, the former chief executive will now be paid a full year’s salary, or $270,000. Avistar will also cover the cost of his health coverage for up to 13 months and the payments on his $50,000 life insurance policy for a year.

As for his bonus he’ll get $60,000 guaranteed, rather than a pro-rated amount of any possible bonus he might have earned for his performance at Avistar this year to date. No named  officer earned a performance-based bonus last year at Avistar, although Moss was paid $109,921 in discretionary bonus money.

Moss will also be paid $22,500 to make make himself “reasonably available” to serve as a consultant for a month, with the option to provide services for two more months after that.

Finally, the period during which Moss may exercise his vested options was doubled from six months to a full year.

Interestingly, Avistar was able to name a successor for Moss the very next day, leading us to wonder about just how ‘voluntary’ his resignation really was.

Robert Kirk will be getting paid the same salary as Moss along with an option grant of 1.5 million of its shares vesting over four years.  And his severance arrangment will be the same as the original agreement with Moss. Only time will tell whether it is subject to change, as well.

IXYS,  the Milpitas maker of power-control semiconductors that said in May it wouldn’t provide guidance on future revenue because of “changing economic conditions”, nevertheless included revenues among five performance objectives it approved relating to the 2010 cash bonus for Chief Executive Nathan Zommer, whose target bonus was set at $300,000 and could be as much as twice that.

The performance objectives also include gross margins, cash flow from operations and return on assets.

The final objective, listed as “Discretionary,” is likely to carry the most weight, based on a long paragraph approved by the compensation committee regarding the “potential cash performance compensation and objectives”.

In it the committee says that the objectives “are not determinative, in and of themselves of the amount of any performance payment.” Executive bonuses will be determined “by the committee in light of its evaluation of the executive’s performance in total and not based on the mechanical application of any formula.”

Volterra Semiconductor raised the pay of two of its top executives starting today, according to an SEC filing. The salary increases, which were recommended in January by the board of directors’ compensation consultant after examining comparable pay at the company’s peer group of 20 other chip makers mostly based in Silicon Valley did not take effect earlier due to a salary freeze imposed because of “business uncertainties affecting the worldwide economy.”

The company lifted the salary freeze recently and the compensation committee of the board approved lifting the salary of Chief Financial Officer Mike Burns by $20,000, or 8.7 percent, to $250,000, and of Vice President David Lidsky, head of design engineering, by $15,000, or 6.6 percent, “based on their responsibilities and performance and in line with our peer group data.”

Pay levels for the company’s other named officers remained the same, including Chief Executive Jeff Staszak, who gets paid $385,000 a year, or about halfway among the salaries of his peers.

Spansion, the bankrupt Sunnyvale flash memory maker that gave its executives a retention-based pay raise in February the same day it fired 3,000 workers, named its fourth chief financial officer in less than five months.

Randy Furr was named to replace Nathan Sarkisian, who served as interim CFO since May 20 when he replaced the previous interim chief financial officer, Thora Thoroddsen. Thoroddsen is a senior vice president with the crisis management consulting firm Spansion hired days before it filed for bankruptcy protection Feb. 28. She became Spansion’s interim CFO in April when the company’s previous full-time CFO and a recipient of the retention-based pay raise, Dario Sacomani, quit.

Furr is the former chief operating officer of Sanmina-SCI who left that company unexpectedly in October 2005 “for personal and family reasons.” He resurfaced seven months later as chief financial officer of Adobe Systems, but resigned that post about a month after a special committee of Sanmina-SCI’s board announced that it would have to restate past financial statements as a result of “improper stock option grants.”

Furr agreed to repay $126,480 to cover the increased strike price of mispriced Sanmina options he previously exercised and to forfeit his right to a severance payment from Sanmina-SCI as part of a deal approved May 1 to settle a shareholder lawsuit over backdating allegations.

Furr’s offer letter guarantees him an annual salary of $440,000 and an annual target bonus of between 70-100 percent of that, subject to the approval of the Bankruptcy court, according to a filing today.

He will report to Chief Executive John Kispert, who’s original contract when he was hired in February called for him to receive a $1.75 million bonus should the company be sold. Since then the board has decided to pursue a “standalone” strategy and the bonus will now also be paid when its reorganization plan is approved.

The board of directors at Electronics for Imaging apparently batted 1.000 at the company’s annual meeting Friday when all the directors were reelected and all the proposals the board submitted to its shareholders for a vote passed.

But the perfect record obscured the fact that the board decided at the last minute to pull a proposal asking shareholders to approve a one-time “fair-value” option exchange program for the company’s top executives, according to a filing the company made with the SEC Monday.

The exchange would have allowed the officers to turn in underwater stock option grants in exchange for a lesser number of restricted shares. A similar proposal for all other employees remained on the agenda and was OK’d by shareholders.

Was the exchange program for the top brass pulled because the early proxy voting indicated it would be voted down? We asked the company, but failed to get a response.

Perhaps investors, having seen EFI’s stock price lose value over each of the last three years—it dived 57 percent in 2008 alone—were not in a giving mood when it came to the company’s leaders.

Aruba Networks, which last November layed off 46 employees to reduce costs and “streamline operations”, last week granted its chief executive, Dominic Orr, a 33 percent raise in salary from $300,000 to $400,000, according to a filing it made with the SEC today.

Chief Financial Officer Steffan Tomlinson got his current salary, which was $280,000 according to today’s filing, boosted 16 percent to $325,000. (His salary in 2008 was lifted from $235,000 to $250,000, according to the company’s proxy statement filed Nov. 25. It’s not clear when he received the interim salary increase. )

Aruba’s vice president for engineering, Sriram Ramachandran, and Chief Technology Officer Keerti Melkote scored 24 percent increases in base pay from $225,000 to $280,000.

Aruba has yet to post a profitable quarter since becoming a public company in March 2007. Sales growth in its most recent quarter slowed to 8 percent compared to a 23 percent gain in the comparable quarter last year.