SAP CEO quits as contract remains unrenewed

NEW YORK, USA: SAP, a player in business management software, on Sunday announced that its CEO Leo Apotheker’s contract will not be renewed and his resignation is effective immediately.

The company has appointed co-CEOs Jim Hagemann Snabe and Bill McDermott in Apotheker’s place. Both executives are already members of the SAP Executive Board, with Snabe in charge of product development and McDermott in charge of field operations prior to their appointment as Co-CEOs, a press statement said.

A week and a half ago, the company had reported its 2009 financial results, in which total revenue had declined 9 per cent for the year (to 10,671 euro) and software revenues declined by 28 per cent.

Giving his opinion on the issue, Forrester Research vice president and principal analyst Paul Hamerman said “During Apotheker’s watch, customers become disenchanted over the mandatory migration and price increase related to enterprise support, as well as overly aggressive sales of featured products, including analytics.”

“With the appointment of co-CEOs Snabe and McDermott, SAP continues a long-standing tradition of promoting CEOs from within. Co-CEOs, in fact, have been used before, most recently with Apotheker serving as co-CEO with his predecessor, Hennig Kagermann, during the transition period leading up to Kagermann’s retirement,” Hamerman added.