In a move designed mainly to stem defections of its top staff to US competitors, SAP yesterday said it will introduce an new incentive plan in the first quarter of the new year.
SAP America also announced it appointed Christopher Larsen as president and Eric Rubino as chief operating officer of SAP America, slots left open when top executives left the company earlier this year. Both are internal hires.
SAP'S new incentive plan is designed for the SAP executive board, senior managers and top performers, as well as top managers and board members of SAP affiliates, the company said in a statement today. The plan is both competitive in the US marketplace and complies with German laws on corporate control and disclosure, SAP said.
The plan consists of a stock option program and a convertible bond program. The stock options will only have a value if the growth in SAP's preferred shares exceeds the performance of a reference index within a defined period, SAP said in a statement.
SAP will also issue convertible bonds that can be converted to SAP preference shares within a defined period. The total number of SAP preferred shares underlying the stock options and convertible bonds may not exceed 6.25 million, SAP said.
The new program is subject to approval from SAP's shareholders, who will cast their votes on the proposal at an extraordinary general meeting in Mannheim, Germany on January 18.
Although SAP already introduced a stock-based compensation program last year called STAR (Stock Appreciation Rights Program) it was apparently not enough to prevent its top managers from being lured to other companies. SAP last month launched a law suit against competitor Siebel Systems for stealing away as many as 20 of its US employees.
In March, Jeremy Coote resigned as SAP America president to become vice president of Siebel's North America operations. Then in May, Siebel said Paul Wahl, a former chief executive officer of SAP America who briefly became CEO of TriStrata Security, had been appointed as Siebel's new president and chief operating officer.