Listen to this article
SAP, the world’s biggest business-software maker, has given Henning Kagermann an incentive to renew his contract as chief executive next year by flagging unprecedented bonuses for senior staff.
The supervisory board plans to pay out €300m ($382m) to hundreds of employees if SAP’s share price doubles by 2010, with one-third of the sum reserved for the chief executive and the six other executive directors.
Mr Kagermann took over in the aftermath of the tech-bubble bursting and has led SAP to stellar sales and profit growth. He has yet to say whether he will renew a contract that ends in 2007.
A vital part of his success is melding technology and marketing expertise, throwing up the question of whether SAP would be able to find a replacement with a similar balancing influence on the executive board.
A decision could come as late as next spring, with Mr Kagermann’s deliberations coinciding with a debate in Germany on whether executives should sign three-year rather than five-year contracts.
Hasso Plattner, chairman of the supervisory board, told shareholders at the annual meeting the bonuses would help SAP realise “very ambitious” goals to double sales in the next five years.
Under Mr Kagermann’s stewardship, SAP has launched new software designed to let clients better mould it to their needs. It reckons its potential market could grow from $30bn to $70bn by 2010.
If SAP’s market capitalistion grows by the same amount, Mr Kagermann could boost his pay by about a half, given that an equal division of the bonus would net each board member €14m in five years.
His pay plus existing bonuses totalled €6.1m last year, half as much again as fellow directors Léo Apotheker and technology boss Shai Agassi, both potential successors.
Get alerts on Technology sector when a new story is published