Ellison, who is believed to be the fifth-wealthiest man in the world, will be replaced by Mark Hurd and Safra Catz, Oracle said. In an unusual move, Hurd and Catz will both be named CEO of the company—not co-CEOs.
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Ellison will become executive chairman and chief technology officer. Oracle said manufacturing, legal and finance functions would report to Catz and sales, service and business units would report to Hurd. Software and hardware engineering will report to Ellison.
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"Larry has made it very clear that he wants to keep working full time and focus his energy on product engineering, technology development and strategy," Dr. Michael Boskin, the presiding director of Oracle's board, said in a press release.
"Safra and Mark are exceptional executives who have repeatedly demonstrated their ability to lead, manage and grow the company. The Directors are thrilled that the best senior executive team in the industry will continue to move the company forward into a bright future," Boskin added.
The new company leadership will see Hurd, Catz, and Ellison working in tandem, Oracle said.
"The three of us have been working well together for the last several years, and we plan to continue working together for the foreseeable future. Keeping this management team in place has always been a top priority of mine," Ellison said in the press release.
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Still, despite these successes, Ellison has drawn some public ire in recent years. In September 2013, reports surfaced that some shareholders were not pleased with the nearly $77 million compensation package that Oracle doled out to Ellison the previous fiscal year.
The total 2013 compensation for Ellison, Hurd, and Catz was more than $166 million.
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And while Oracle's growth has slowed—not topping 4 percent revenue growth since 2011—it remains a mature company with steady stock growth. Shares in the technology firm, which were trading over $41 on Thursday, were below $25 in 2011.
Oracle went public March 12, 1986 at $15 per share, but since Oracle has had several splits since then, its split-adjusted IPO price is under 5 cents, and has gone up more than 89,640 percent. Microsoft stock's split-adjusted increase from its IPO price is about 63,933 percent.
Hurd, one of Oracle's presidents, was formerly the chairman and CEO of Hewlett-Packard. He stepped down from that post in 2010 after HP said he had falsified expense reports to hide a relationship with a female contractor. The contractor also accused Hurd of sexual harassment.
Catz is currently the other president, and the company's CFO. She joined Oracle in 1999 as a senior vice president.
—By CNBC's Everett Rosenfeld