Restoration Hardware explodes more than 30% after crushing earnings and raising guidance

• Jonathan Garber
 

• 22h
• 2,347

Restoration HardwareKathryn Barnard/Restoration Hardware

RH RH

 70.62 3.47 (+5.20 %)

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Restoration Hardware on Wednesday announced a forecast for third-quarter and full year adjusted earnings that flew past its previous expectations, sending its shares sharply higher in extended trading. 

The high-end furniture retailer said it saw third-quarter earnings in a range of $0.68 to $0.80, beating the forecast for $0.38 according to Bloomberg. 

For the full-year, RH said it sees earnings of $2.43 to $2.67, handily beating its previous estimate of $1.67 to $1.94. 

"While we continue to expect strong revenue growth, expanding operating margins, and significant free cash flow in the second half of fiscal 2017, we are taking a cautiously optimistic approach to our outlook given the uncertain macro environment in addition to the many initiatives and investments we are undertaking," Gary Friedman, RH chairman and CEO said in the earnings statement.  

The company announced second-quarter adjusted earnings of $0.65 on revenue of $615.3 million, which were ahead of the $0.47 and $606.9 million that was expected by the Bloomberg consensus. 

Restoration Hardware shares gained 32% in after-hours trading. They rose 109% year-to-date through Wednesday's market close. 

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Larry Ellison won't get paid any more equity unless he gets Oracle's stock up to $80

• Becky Peterson
 

• 19h
• 16,871

Oracle's chairman and CTO Larry EllisonREUTERS/Robert Galbraith

ORCL Oracle

 51.62 0.60 (+1.20 %)

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If Oracle CTO and renowned billionaireLarry Ellison wants to get any wealthier, he's going to have to do right by shareholders. 

The company just revealed a new, 100% performance-based equity package for its two CEOs and CTO aimed at reducing their total compensation over the next five years. The details were revealed in an investor presentationfiled with the Security and Exchange Commission on Tuesday. 

The three executives — joint CEOs Safra Catz and Mark Hurd, and Ellison — will still get a base salary. But in order for the execs to receive about $100 million each in stock awards in 2022, they will have to meet some specific targets. 

Under the new rules, equity awards are based on two factors: whether the team is able to significantly grow Oracle's cloud business, and whether Oracle returns value to shareholders.

Among the goals, the team must get Oracle's stock to an average price of $80 per share for at least 30-days. Currently, it hovers around $50 per share. 

Another goal is to hit $20 billion in total cloud revenues in one fiscal year. Total cloud revenues in 2017 were $4.57 billion. 

Playing catch up

Oracle's cloud business is fast growing, but it's still lagging behind companies like Amazon, Google and Microsoft. Its main advantage is that it's capable of running Oracle databases lightning-fast.

Cloud services made up 12% of revenues in 2017, an increase from 8% in 2016. Overall, cloud revenues increased 58% year-over-year.

Should the executives meet their goals, they will each receive a total of $103.7 million in 2022, or $20.74 million annually for the five-year challenge. 

While $103.7 million is a lot of money, when broken down into annual compensation, this is actually a 47% decrease from the 2017 equity each executive received, which was worth just under $40 million. 

The CEOs and CTO also receive base salaries and performance-based bonuses on top of the performance-based equity packages (Ellison gets a $1 salary, the two CEOs are paid $950,000 a year). However, equity makes up the majority of annual compensation for all three of the executives.

Performance was introduced as a partial factor in 2015, to appease investors who had become increasingly uncomfortable with executive pay at the company. More than half of the company’s investors voted against its pay practices between 2012 and 2015, according to Bloomberg.

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