The annual compensation package for Bill McDermott, SAP’s Newtown Square-based CEO, is causing some controversy with shareholders, writes Joseph DiStefano for the Philadelphia Inquirer.
His $17 million, cash-and-stock package is nowhere near the largest in the industry. However, it has been under scrutiny as SAP is Germany’s most valuable company, and one of Europe’s largest software makers.
Before a recent company meeting, German shareholder group DSW and Institutional Shareholder Services from the U.S. both criticized McDermott’s package. They also pointed out that SAP had been unresponsive when questioned on the subject.
Unlike in the U.S., European public companies try to prevent CEO pay packages from becoming overblown. But in a two-page memo distributed in both English and German to the company’s 86,000 employees before the meeting, McDermott defended his pay.
In it, he wrote that the stock grants are a reward for his successful expansion of the company since the Great Recession in 2008. He then pointed out that they are an encouragement for him and other senior management to keep increasing profits, which, in turn, boosts the share price of SAP.
Finally, McDermott emphasized that SAP owed its global success to hiring and retaining “the best workforce in the world.”
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