SAP AG (NYSE:SAP) (FRA:SAP) (ETR:SAP) has announced that it will change from having two co-CEOs to a more traditional structure next year. Co-CEO Jim Hagemann Snabe is expected to leave his position and join the supervisory board following a shareholder vote in May of next year, leaving fellow co-CEO in charge, Cornelius Rahn of Bloomberg reports.
SAP briefly most valuable company in Germany
SAP AG (NYSE:SAP) (FRA:SAP) (ETR:SAP) first appointed the two men in 2010 to replace Leo Apotheker, who many shareholders held responsible for the company’s stagnant revenues. Since then SAP has seen its share price go up 70 percent and was briefly the most valuable company in Germany. SAP moved aggressively into the mobile and cloud computing markets during their tenure, spending $14 billion on acquisitions.
“After more than 20 years with SAP, I have decided that it is time for me to begin the next phase of my career, closer to my family,” Snabe said in a statement. The decision was announced after a meeting of the supervisory board was held at Snabe’s request. The decision must be approved by 25 percent of shareholders, but it already has the support of co-founder Hasso Plattner whose 10 percent stake makes it very likely to be approved.
Snabe to move to SAP supervisory board
“Now I can look to bring Jim’s experience and energy to the SAP AG (SAP) supervisory board, and be sure SAP is firmly in the hands of a visionary leader with Bill as sole CEO,” said Plattner.
While Snabe will no longer be involved in day-to-day operations, he is expected to remain influential at SAP, and his move to the board may strengthen the role of SAP’s U.S headquarters in determining corporate strategy.
Stock prices dip on news of the change
News of the change caused the company’s stock to dip 1.5 percent, falling over 9 percent over the course of the year. “Snabe was a good counterweight to McDermott, who is a pure marketing machine,” said Fairesearch GmbH analyst Heinz Steffen, conveying concerns that SAP AG (NYSE:SAP) (FRA:SAP) (ETR:SAP) could backtrack without the dual-CEO structure that has brought it so much success.
There are already rumors that SAP AG (NYSE:SAP) (FRA:SAP) (ETR:SAP) is looking for a replacement that would join McDermott as co-CEO, shoring up some of McDermott’s perceived weaknesses. But if the decision to return to a dual-CEO structure is put off too long it could be seen as a vote of no confidence in McDermott.
McDermott has been with SAP AG (NYSE:SAP) (FRA:SAP) (ETR:SAP) since 2002 and joined the executive board in 2008 after leading operations in the Americas and Asia. He previously worked at Siebel Systems, Gartner, and Xerox.