Skip to Content

Compensation Report

This compensation report is part of the audited management report.

Compensation for Executive and Supervisory Board Members

This compensation report outlines the criteria that we applied for the year 2016 to determine compensation for Executive Board and Supervisory Board members, discloses the amount of compensation paid, and describes the compensation systems. It also contains information about share-based payment plans for Executive Board members and shares held by Executive Board and Supervisory Board members.

Compensation for Executive Board Members

Compensation System for 2016

The 2016 compensation for Executive Board members is intended to reflect SAP’s company size and global presence as well as our economic and financial standing. The compensation level is internationally competitive to reward committed, successful work in a dynamic business environment.

The compensation package for each Executive Board member is determined based on their individual role and performance. The package has three elements:

  • A fixed annual salary element
  • A variable short-term incentive (STI) element to reward performance in the plan year
  • A variable long-term incentive (LTI) element tied to the price of SAP shares to reward performance over multiple years

The fixed annual salary and STI elements are paid in the currency of the Executive Board member’s home country, whereas compensation for the LTI element is paid in euros.

The Supervisory Board sets a compensation target for the sum of the fixed and the two variable elements. It reviews, and if appropriate, revises this compensation target every year. The review takes into account SAP’s business performance and the compensation paid to board members at comparable companies on the international stage. The following charts visualize the relation of the fixed and the variable compensation targets for the Executive Board members for 2016:

The amount of variable compensation depends on SAP’s performance against performance targets that the Supervisory Board sets for each plan year. The performance targets are key performance indicator (KPI) values aligned to the SAP budget for the plan year.

The following criteria apply to the elements of Executive Board compensation for 2016:

  • The fixed annual salary element is paid as a monthly salary.
  • The variable STI element was determined under the STI 2016 plan. Under this plan, the STI compensation depends on the performance of the SAP Group against the predefined target values for three KPIs: non-IFRS constant currency cloud and software revenue growth; non-IFRS constant currency operating margin increase; and constant currency new cloud bookings. In addition, the STI 2016 plan provides for a discretionary element that allows the Supervisory Board, after the end of the fiscal year 2016, to address not only an Executive Board member’s individual performance, but also SAP’s performance in terms of market position, innovative power, customer satisfaction, employee satisfaction (taking innovative HR strategy, HR excellence, leadership development and social partnership into consideration), and attractiveness as an employer. A threshold of 75% for the total target achievement level applies for the financial KPIs: if the sum of the weighted individual target achievements for the financial KPIs is below 75% (threshold), there is no payout for the pro rata target bonus. A cap of 175% applies for each financial KPI, and a cap of 200% applies for the discretionary KPI. Moreover, if there has been any extraordinary and unforeseeable event, the Supervisory Board can, at its reasonable discretion, retroactively adjust payouts up or down in the interest of SAP.
  • On February 22, 2017, the Supervisory Board assessed SAP’s performance against the agreed targets and determined the amount of compensation payable under the STI 2016 plan. The STI 2016 plan will be paid out after the Annual General Meeting of Shareholders in May 2017.
  • The variable LTI element was determined under the LTI 2016 plan effective January 1, 2016, however, the grant date of the tranche 2016 is March 24, 2016. The purpose of the LTI 2016 plan is to reflect the operating profit target achievement, to ensure long-term retention of our Executive Board members, and to reward a share price outperformance by SAP as compared to a group of its peers (Peer Group).
      

The LTI 2016 plan is an annual revolving remuneration element that is linked to the price of the SAP share. A grant amount determined by the Supervisory Board is converted into virtual shares, referred to as Share Units, by dividing the grant amount by the price of the SAP share (calculated on the basis of a defined average value). The grant amount is determined by the Supervisory Board in its discretion for each financial year at a level of between 80% and 120% of the contractual target amount; taking into account the achievement of the operating profit targets set for the preceding financial year.
The Share Units granted comprise 60% Performance Share Units (PSUs) and 40% Retention Share Units (RSUs). Both types of Share Units have a vesting period of (approximately) four years. Each Share Unit that finally vests entitles its holder to a (gross) payout corresponding to the price of one SAP share after the end of the holding period, but capped at three times the SAP share price applied for the conversion of the grant amount into Share Units. The number of PSUs that finally vests depends on the performance of the SAP share. If the increase of price of the SAP share over the vesting period of the PSUs exceeds the increase of a defined Peer Group Index over the same period, the number of PSUs is increased by a percentage equal to the outperformance expressed as percentage points. This percentage will be doubled if, in addition to the outperformance over the Peer Group Index, the price of the SAP share at the end of the vesting period of the PSUs is higher than the price at the start of this period. The number of vested PSUs a member can attain in respect to a plan year is capped at 150% of their initial PSU allocation for that year. Conversely, if the increase of price of the SAP share over the vesting period of the PSUs is below the increase in the Peer Group Index, the number of PSUs is reduced by a percentage equal to the difference expressed as percentage points. All PSUs lapse if the difference exceeds 50%. If the service contract for the Executive Board member is terminated before the end of the third year following the year in which the Share Units were granted, both the RSUs and PSUs are forfeited in whole or in part, depending on the circumstances of the relevant resignation from office or termination of the service contract, as follows:

  • If the Executive Board member has resigned from office without cause and starts working for a competitor of SAP, whether on a free-lance basis or as an employee or otherwise prior to the end of the initial vesting period of the Share Units or the Supervisory Board terminates the Executive Board member's service contract for cause, all Share Units are forfeited.
  • A portion of the RSUs and PSUs are forfeited, if the Executive Board member has resigned from office without cause, but does not start working for a competitor of SAP prior to the end of the initial vesting period of the Share Units, or the Service Contract of the Executive Board member expires by mutual consent, is terminated by mutual consent, is terminated by the Executive Board member for cause or the Executive Board member retires. Expiration by mutual consent or termination by mutual consent occurs if the Executive Board member is not re-appointed or does not accept the reappointment or an extraordinary expiration is provided by the Service Contract of the Executive Board member, that is, in the case of a permanent inability to work. The portion of the RSUs and PSUs which forfeit equal the proportion of plan participation to the vesting period (for example, if the Executive Board member leaves with effect from December 31, 2016, three quarters of the Share Units granted in 2016 would be forfeited). The remaining Share Units will continue to be in effect. In addition, the number of remaining PSUs is adjusted subject to the performance of SAP's share price in relation to the Peer Group Index. The same applies if the Executive Board member dies, however the Share Units are paid out pro rata temporis within 90 days after death on the basis of the then current SAP share price.
  • In the event of a change of control as defined in the service contract of the Executive Board member, the following generally applies: The Share Units are paid out without undue delay within 90 days on a pro rata temporis basis, plus 50% of the Share Units (which otherwise, under mere pro rata aspects, would be forfeited), on the basis of the then current SAP share price. In addition, the number – reduced on a pro rata temporis basis – of PSUs paid out may change with the relevant outperformance of the SAP share compared to the Peer Group Index as determined on the day the change of control event is effective. The remaining Share Units are forfeited.
  • To compensate for disadvantages resulting from leaver rules under the LTI 2016 plan in comparison to the previous RSU Milestone Plan, all current Executive Board members will receive an individual equalization amount as an amendment to the leaver rules of the LTI 2016 plan. The equalization amount is the sum of partial amounts applicable for the years 2016 and 2017 and, in one case, also for the year 2018. The respective annual partial amount is subject to a target achievement of at least 60% of the operating profit target and an ongoing employment relationship of the respective year. In the event of termination, PSUs equal to this amount based on the then-applicable reference share price will be granted. PSUs which would otherwise be forfeited in the event of termination of the service contract for the Executive Board member will not be forfeited to the extent of this calculated amount. If the PSUs which would be forfeited in the termination year is lower than the equalization amount, PSUs from the preceding financial year and, if required, from earlier years which would otherwise be forfeited, will become non-forfeitable.

Amount of Compensation for 2016

We present the Executive Board compensation disclosures in accordance with the recommendations of the German Corporate Governance Code (“GCGC”). Furthermore, the table below provides a reconciliation statement following the requirements of sections 314 and 315 of the German Commercial Code (Handelsgesetzbuch, or “HGB”) as specified in the German Accounting Standards (“GAS 17”).

Pursuant to the recommendations of the GCGC, the value of benefits granted for the year under review as well as the allocation, that is, the amounts disbursed for the year under review, are disclosed below based on the reference tables recommended in the GCGC.

In contrast to the disclosure rules stipulated in the German HGB and GAS 17, the GCGC includes the service cost according to IAS 19 in the Executive Board compensation and requires the additional disclosure of the target value for the one-year variable compensation and the maximum and minimum compensation amounts achievable for the variable compensation elements.

Executive Board Members’ Compensation

 

German Corporate Governance Code (Benefits Granted in 2015 and 2016)

Benefits Granted
€ thousands
  Bill McDermott
CEO
  Robert Enslin
Member of the Executive Board
  Michael Kleinemeier
Member of the Executive Board
20161)   2016 (Min)   2016 (Max)   20152)   20161)   2016 (Min)   2016 (Max)   20152)   2016   2016 (Min)   2016 (Max)   2015
Fixed compensation   1,403.0   1,403.0   1,403.0   1,150.0   854.0   854.0   854.0   700.0   700.0   700.0   700.0   116.7
Fringe benefits3)   1,625.7   1,625.7   1,625.7   1,258.0   474.0   474.0   474.0   103.3   26.9   26.9   26.9   0
Total   3,028.7   3,028.7   3,028.7   2,408.0   1,328.0   1,328.0   1,328.0   803.3   726.9   726.9   726.9   116.7
One-year variable compensation   2,382.1   0   4,317.6   1,860.0   1,441.8   0   2,613.3   1,125.8   1,125.8   0   2,040.5   188.1
Multiyear variable compensation                                                
LTI 2016 Plan   8,000.3   0   33,129.7     2,641.3   0   10,937.5     2,476.6   0   10,255.9  
RSU Milestone Plan 2015                         315.0
Total   13,411.1   3,028.7   40,476.0   4,268.0   5,411.1   1,328.0   14,878.8   1,929.1   4,329.3   726.9   13,023.3   619.8
Service cost   571.3   571.3   571.3   682.4   34.7   34.7   34.7   308.0   0   0   0   0
Total according to GCGC   13,982.4   3,600.0   41,047.3   4,950.4   5,445.8   1,362.7   14,913.5   2,237.1   4,329.3   726.9   13,023.3   619.8
                       
Reconciliation reporting of total compensation pursuant to Section 314(1)(6a) HGB in connection with GAS 17
Less granted annual variable target compensation   −2,382.1           −1,860.0   −1,441.8           −1,125.8   −1,125.8           −188.1
Plus allocated actual annual variable compensation   2,486.9           2,743.5   1,505.2           1,660.5   1,175.3           277.5
Less difference in measuring grant value                                               −51.8
Less service cost   −571.3           −682.4   −34.7           −308.0   0           0
Total compensation   13,515.9       5,151.5   5,474.5       2,463.8   4,378.8       657.4

 

 

German Corporate Governance Code (Benefits Granted in 2015 and 2016)

Benefits Granted
€ thousands
  Bernd Leukert
Member of the Executive Board
  Luka Mucic
Member of the Executive Board
  Gerhard Oswald
Member of the Executive Board
(until December 31, 2016)
2016   2016 (Min)   2016 (Max)   2015   2016   2016 (Min)   2016 (Max)   2015   2016   2016 (Min)   2016 (Max)   2015
Fixed compensation   700.0   700.0   700.0   700.0   700.0   700.0   700.0   700.0   700.0   700.0   700.0   700.0
Fringe benefits3)   12.4   12.4   12.4   11.7   12.1   12.1   12.1   12.1   105.4   105.4   105.4   22.4
Total   712.4   712.4   712.4   711.7   712.1   712.1   712.1   712.1   805.4   805.4   805.4   722.4
One-year variable compensation   1,125.8   0   2,040.5   1,125.8   1,125.8   0   2,040.5   1,125.8   1,125.8   0   2,040.5   1,125.8
Multiyear variable compensation                                                
LTI 2016 Plan   2,789.6   0   11,551.8     2,476.6   0   10,255.9     2,086.2   0   8,639.3  
RSU Milestone Plan 2015                        
Total   4,627.8   712.4   14,304.7   1,837.5   4,314.5   712.1   13,008.5   1,837.9   4,017.4   805.4   11,485.2   1,848.2
Service cost   0   0   0   0   0   0   0   0   0   0   0   0
Total according to GCGC   4,627.8   712.4   14,304.7   1,837.5   4,314.5   712.1   13,008.5   1,837.9   4,017.4   805.4   11,485.2   1,848.2
                       
Reconciliation reporting of total compensation pursuant to Section 314(1)(6a) HGB in connection with GAS 17
Less granted annual variable target compensation   −1,125.8           −1,125.8   −1,125.8           −1,125.8   −1,125.8           −1,125.8
Plus allocated actual annual variable compensation   1,175.3           1,660.5   1,175.3           1,660.5   1,175.3           1,660.5
Less difference in measuring grant value                                                
Less service cost   0           0   0           0   0           0
Total compensation   4,677.3       2,372.2   4,364.0       2,372.6   4,066.9       2,382.9

 

 

German Corporate Governance Code (Benefits Granted in 2015 and 2016)

Benefits Granted
€ thousands
  Stefan Ries
Member of the Executive Board
(from April 1, 2016)
  Steve Singh
Member of the Executive Board
(from April 1, 2016)
  Total Executive Board Compensation
    2016   2016 (Min)   2016 (Max)   2015   20161)   2016 (Min)   2016 (Max)   2015   2016   2015
Fixed compensation   525.0   525.0   525.0     640.0   640.0   640.0     6,222.0   4,066.7
Fringe benefits3)   13.5   13.5   13.5     6.1   6.1   6.1     2,276.1   1,407.5
Total   538.5   538.5   538.5     646.1   646.1   646.1     8,498.1   5,474.2
One-year variable compensation   845.9   0   1,533.2     1,083.3   0   1,963.5     10,256.3   6,551.3
Multiyear variable compensation                                        
LTI 2016 Plan   1,532.1   0   6,491.3     1,939.7   0   8,218.0     23,942.4  
RSU Milestone Plan 2015                     315.0
Total   2,916.5   538.5   8,563.0     3,669.1   646.1   10,827.6     42,696.8   12,340.5
Service cost   0   0   0     0   0   0     606.0   990.4
Total according to GCGC   2,916.5   538.5   8,563.0     3,669.1   646.1   10,827.6     43,302.8   13,330.9
                   
Reconciliation reporting of total compensation pursuant to Section 314(1)(6a) HGB in connection with GAS 17
Less granted annual variable target compensation   −845.9             −1,083.3             −10,256.3   −6,551.3
Plus allocated actual annual variable compensation   883.1             1,131.0             10,707.4   9,663.0
Less difference in measuring grant value                                   0   −51.8
Less service cost   0             0             −606.0   −990.4
Total compensation   2,953.7         3,716.8         43,147.9   15,400.4

1) The value of the fixed and one-year variable elements is granted in U.S. dollars. For conversion purposes from U.S. dollars into euro, for fixed compensation the 2016 average exchange rate applies and for the one-year variable element the 2016 year-end exchange rate applies.

2) The value of the fixed and one-year variable elements is subject to a contractual exchange-rate clause applied at the end of the year, so the amounts actually paid may be greater.

3) Insurance contributions, benefits in kind, expenses for maintenance of two households, use of aircraft as well as tax and discrete payments arising through application of the fixed exchange-rate clause in 2016 for 2015.

4) Total grant value at time of grant according to GCGC (€315.000) deducted by the grant value calculated as required under section 314 of the German Commercial Code (€263.200).

 

The total Executive Board compensation for 2016 calculated as required under section 314 of the German Commercial Code amounted to €43,147,900. Including RSU Milestone Plan 2015 awards for 2015 granted in 2015 to Michael Kleinemeier (€263,200) upon his appointment to the Executive Board, the total Executive Board compensation for 2015 calculated as required under section 314 of the German Commercial Code amounted to €15,400,400.

The share-based payment amounts included in the 2016 compensation result from the following RSUs and PSUs under the LTI 2016 Plan.

Share-Based Payment Under LTI 2016 Plan (Grants for 2016)

Grants for 2016
Quantity (RSU) Retention Share Units (40%) (PSU) Performance Share Units (60%) Grant Value per RSU at Time of Grant Grant Value per PSU at Time of Grant Total Grant Value at Time of Grant
€ thousands
Bill McDermott (CEO) 122,423 48,969 73,454 66.52 64.57 8,000
Robert Enslin 40,417 16,167 24,250 66.52 64.57 2,641
Michael Kleinemeier 37,898 15,159 22,739 66.52 64.57 2,477
Bernd Leukert 42,687 17,075 25,612 66.52 64.57 2,790
Luka Mucic 37,898 15,159 22,739 66.52 64.57 2,477
Gerhard Oswald (until December 31, 2016) 31,924 12,770 19,154 66.52 64.57 2,086
Stefan Ries (from April 1, 2016) 23,987 9,595 14,392 65.77 62.61 1,532
Steve Singh (from April 1, 2016) 30,368 12,147 18,221 65.77 62.61 1,940
Total 367,602 147,041 220,561 23,942

 

German Corporate Governance Code (Allocation)

Allocation
€ thousands
  Bill McDermott
CEO
  Robert Enslin
Member of the Executive Board
  Michael Kleinemeier Member of the Executive Board
20161)   2015   20161)   2015   2016   2015
Fixed compensation   1,403.0   1,150.0   854.0   700.0   700.0   116.7
Fringe benefits2)   1,625.7   1,258.0   474.0   103.3   26.9   0
Total   3,028.7   2,408.0   1,328.0   803.3   726.9   116.7
One-year variable compensation   2,743.5   2,036.7   1,660.5   817.3   277.5  
Multiyear variable compensation                        
RSU Milestone Plan 2015   9,244.7          
SAP SOP 2011            
Other            
Total   15,016.9   4,444.7   2,988.5   1,620.6   1,004.4   116.7
Service cost   571.3   682.4   34.7   308.0   0   0
Total   15,588.2   5,127.1   3,023.2   1,928.6   1,004.4   116.7

 

 

German Corporate Governance Code (Allocation)

Allocation
€ thousands
  Bernd Leukert
Member of the Executive Board
  Luka Mucic
Member of the Executive Board
  Gerhard Oswald
Member of the Executive Board
(until December 31, 2016)
2016   2015   2016   2015   2016   2015
Fixed compensation   700.0   700.0   700.0   700.0   700.0   700.0
Fringe benefits2)   12.4   11.7   12.1   12.1   105.4   22.4
Total   712.4   711.7   712.1   712.1   805.4   722.4
One-year variable compensation   1,660.5   817.3   1,660.5   621.4   1,660.5   1,232.7
Multiyear variable compensation                        
RSU Milestone Plan 2015           3,316.2  
SAP SOP 2011             1,126.7
Other            
Total   2,372.9   1,529.0   2,372.6   1,333.5   5,782.1   3,081.8
Service cost   0   0   0   0   0   0
Total   2,372.9   1,529.0   2,372.6   1,333.5   5,782.1   3,081.8

 

 

German Corporate Governance Code (Allocation)

Allocation
€ thousands
  Stefan Ries
Member of the Executive Board
(from April 1, 2016)
  Steve Singh
Member of the Executive Board
(from April 1, 2016)
  Total Executive Board Compensation
2016   2015   20161)   2015   2016   2015
Fixed compensation   525.0     640.0     6,222.0   4,066.7
Fringe benefits2)   13.5     6.1     2,276.1   1,407.5
Total   538.5   0   646.1   0   8,498.1   5,474.2
One-year variable compensation           9,663.0   5,525.4
Multiyear variable compensation                        
RSU Milestone Plan 2015           12,560.9  
SAP SOP 2011             1,126.7
Other            
Total   538.5   0   646.1   0   30,722.0   12,126.3
Service cost   0     0     606.0   990.4
Total   538.5   0   646.1   0   31,328.0   13,116.7

1) The value of the fixed and one-year variable elements is granted in U.S. dollars. For conversion purposes from U.S. dollars into euro, for fixed compensation the 2016 average exchange rate applies and for the one-year variable element the 2016 year-end exchange rate applies.

2) Insurance contributions, benefits in kind, expenses for maintenance of two households, use of aircraft as well as tax and discrete payments arising through application of the fixed exchange-rate clause in 2016 for 2015.

 

End-of-Service Benefits

Regular End-of-Service Undertakings

Retirement Pension Plan

The following retirement pension agreements apply to the individual members of the Executive Board:

  • Michael Kleinemeier, Bernd Leukert, Luka Mucic, Gerhard Oswald, and Stefan Ries receive a retirement pension when they reach the retirement age of 60 (62 for Board members appointed after January 1, 2012) and retire from their Executive Board seat; or a disability pension depending on health examination if, before reaching the regular retirement age, they become subject to occupational disability or permanent incapacity. A surviving dependent’s pension is paid on the death of a former member of the Executive Board. The disability pension is 100% of the vested retirement pension entitlement and is payable until the beneficiary’s 60th birthday, after which it is replaced by a retirement pension. The surviving dependent’s pension is 60% of the retirement pension or vested disability pension entitlement at death. Entitlements are enforceable against SAP SE. Current pension payments are reviewed annually for adjustments and, if applicable, increased according to the surplus in the pension liability insurance. If service is ended before the retirement age of 60 (62 for Board members appointed after January 1, 2012), pension entitlement is reduced in proportion as the actual length of service stands in relation to the maximum possible length of service. The applied retirement pension plan is contributory. The contribution is 4% of applicable compensation up to the applicable income threshold plus 14% of applicable compensation above the applicable income threshold. For this purpose, applicable compensation is 180% of annual base salary. The applicable income threshold is the statutory annual income threshold for the state pension plan in Germany (West), as amended from time to time. Originally, Gerhard Oswald was under a performance-based retirement plan. This plan was discontinued when SAP introduced a contributory retirement pension plan in 2000. His pension benefits are derived from any accrued entitlements on December 31, 1999, under performance-based pension agreements and a salary-linked contribution for the period commencing January 1, 2000. Gerhard Oswald’s rights to retirement pension benefits increased by further annual contributions because he remained a member of the Executive Board after his 60th birthday until his retirement on December 31, 2016.
  • Bill McDermott has rights to future benefits under the portion of the pension plan for SAP America classified as “Non-Qualified Retirement Plan” according to the U.S. Employee Retirement Income Security Act (ERISA). The “Non-Qualified” pension plan of SAP America is a cash balance plan that provides either monthly pension payments or a lump sum on retirement. The pension becomes available from the beneficiary’s 65th birthday. Subject to certain conditions, the plan also provides earlier payment or invalidity benefits. The “Non-Qualified” pension plan closed with effect from January 1, 2009. Interest continues to be paid on the earned rights to benefits within this plan.
  • SAP made contributions to a third-party pension plan for Bill McDermott (2016: €571,300; 2015: €682,400) and Robert Enslin (2016: €34,700; 2015: €308,000). SAP’s contributions are based on payments by Bill McDermott and Robert Enslin into this pension plan.
  • Steve Singh has no entitlements under the pension plan for Executive Board members. SAP made no retirement pension plan contributions to a third-party pension plan with respect to Steve Singh in 2016.

 

Total Defined Benefit Obligations (DBO) and the Total Accruals for Pension Obligations to Executive Board Members

€ thousands   Bill McDermott
(CEO)
  Michael Kleinemeier1)   Bernd Leukert1)   Luka Mucic1)   Gerhard Oswald   Stefan Ries1) (from April 1, 2016)   Total
DBO January 1, 2015   1,212.5     123.2   102.8   7,221.4     8,659.9
Less plan assets market value January 1, 2015       94.6   67.8   4,992.4     5,154.8
Accrued January 1, 2015   1,212.5     28.6   35.0   2,229.0     3,505.1
DBO change in 2015   170.0   29.7   129.2   129.9   −171.2     287.6
Plan assets change in 2015     25.4   145.6   138.0   356.9     665.9
DBO December 31, 2015   1,382.5   29.7   252.4   232.7   7,050.2     8,947.5
Less plan assets market value December 31, 2015     25.4   240.2   205.8   5,349.3     5,820.7
Accrued December 31, 2015   1,382.5   4.3   12.2   26.9   1,700.9     3,126.8
DBO change in 2016   76.7   125.2   199.2   211.9   920.7   257.9   1,791.6
Plan assets change in 2016     156.0   149.5   141.8   378.6   116.7   942.6
DBO December 31, 2016   1,459.2   154.9   451.6   444.6   7,970.9   257.9   10,739.1
Less plan assets market value December 31, 2016     181.4   389.7   347.6   5,727.9   116.7   6,763.3
Accrued December 31, 2016   1,459.2   −26.5   61.9   97.0   2,243.0   141.2   3,975.8

1) The values shown here only reflect the pension entitlements that Michael Kleinemeier, Bernd Leukert, Luka Mucic, and Stefan Ries will receive from the retirement pension plan for Executive Board members.

 

The table below shows the annual pension entitlement earned during Executive Board membership of each member of the Executive Board on reaching the scheduled retirement age (60 for Executive Board members initially appointed before 2012 and 62 for Executive Board members initially appointed after January 1, 2012) based on entitlements from SAP under performance-based and salary-linked plans vested on December 31, 2016.

 

Annual Pension Entitlement

€ thousands   Vested on December 31, 2016   Vested on December 31, 2015
Bill McDermott (CEO)1)   106.5   106.9
Michael Kleinemeier   5.2   0.7
Bernd Leukert   14.0   8.8
Luka Mucic   12.9   7.8
Gerhard Oswald2)   327.4   302.5
Stefan Ries
(from April 1, 2016)
  3.6   -

1) The rights shown here for Bill McDermott refer solely to rights under the pension plan for SAP America.

2) Due to the extension of Gerhard Oswald's contract beyond June 30, 2014, these values represent the retirement pension entitlement that he receives after his current Executive Board contract expired on December 31, 2016, based on the entitlements vested on December 31, 2016 (December 31, 2015).

 

These are vested entitlements. To the extent that members continue to serve on the Executive Board and that therefore more contributions are made for them in the future, pensions actually payable at the scheduled retirement age will be higher than the amounts shown in the table.

Postcontractual Non-Compete Provisions

During the agreed 12-month postcontractual non-compete period, each Executive Board member receives abstention payments corresponding to 50% of the final average contractual compensation as agreed in the respective contract on an individual basis. Any other occupational income generated by the Executive Board member is deducted from their compensation in accordance with section 74c of the German Commercial Code.

The following table presents the net present values of the postcontractual non-compete abstention payments. The net present values in the table reflect the discounted present value of the amounts that would be paid in the fictitious scenario in which the Executive Board members leave SAP at the end of their respective current contract terms and their final average contractual compensation prior to their departure equals the compensation in 2016. Actual postcontractual non-compete payments will likely differ from these amounts depending on the time of departure and the compensation levels and target achievements at the time of departure.

 

Net Present Values of the Postcontractual Non-Compete Abstention Payments

€ thousands   Contract Term Expires   Net Present Value of Postcontractual
Non-Compete Abstention Payment1)
Bill McDermott (CEO)   March 31, 2021   6,695.1
Robert Enslin   March 31, 2021   2,711.8
Michael Kleinemeier   October 31, 2018   2,190.4
Bernd Leukert   March 31, 2021   2,316.9
Luka Mucic   March 31, 2021   2,161.7
Stefan Ries
(from April 1, 2016)
  March 31, 2019   1,477.2
Steve Singh
(from April 1, 2016)
  March 31, 2019   1,858.8
Total     19,411.9

1) For the purpose of this calculation, the following discount rates have been applied: Bill McDermott 0.22% (2015: 0.18%); Robert Enslin 0.22% (2015: 0.18%); Michael Kleinemeier -0.026% (2015: 0.50%); Bernd Leukert 0.22% (2015: 0.18%); Luka Mucic 0.22% (2015: 0.18%); Stefan Ries -0.01%; Steve Singh -0.01%.

 

Early End-of-Service Undertakings

Severance Payments

The standard contract for all Executive Board members provides that on termination before full term (for example, where the member’s appointment is revoked, where the member becomes occupationally disabled, or in connection with a change of control), SAP SE will pay to the member the outstanding part of the compensation target for the entire remainder of the term, appropriately discounted for early payment. A member has no claim to that payment if they have not served SAP as a member of the Executive Board for at least one year or if they leave SAP SE for reasons for which they are responsible. Upon the appointment of Stefan Ries and Steve Singh to the Executive Board, the Supervisory Board abstained from the waiting period of one year.

If an Executive Board member’s appointment to the Executive Board expires or ceases to exist because of, or as a consequence of, change or restructuring, or due to a change of control, SAP SE and each Executive Board member has the right to terminate the employment contract within eight weeks of the occurrence by giving six months’ notice. A change of control is deemed to occur when a third party is required to make a mandatory takeover offer to the shareholders of SAP SE under the German Securities Acquisition and Takeover Act, when SAP SE merges with another company and becomes the subsumed entity, or when a control or profit transfer agreement is concluded with SAP SE as the dependent company. An Executive Board member’s contract can also be terminated before full term if their appointment as an Executive Board member of SAP SE is revoked in connection with a change of control.

Postcontractual Non-Compete Provisions

Abstention compensation for the postcontractual non-compete period as described above is also payable on early contract termination.

Permanent Disability

In case of permanent disability, the contract will end at the end of the quarter in which the permanent inability to work was determined. The Executive Board member receives the monthly basic salary for a further 12 months starting from the date the permanent disability is determined.

Payments to Executive Board Members Retiring in 2016

Gerhard Oswald retired from his position as Executive Board member upon the end of his current term on December 31, 2016. He received the following payments in connection with his retirement:

  • For a period of 12 months following his retirement, he receives monthly abstention compensation for the postcontractual non-compete period totaling € 1,922,193.
  • Upon termination of his employment contract, Gerhard Oswald received compensation for unused leave totaling €151,061.12.
  • We have entered into a consulting contract with Gerhard Oswald. Based on this contract, he will be available to the Executive Board and to the Chairman of the Supervisory Board as a strategic advisor especially for customer-specific topics and events for SAP customers until the end of December 2018.

Payments to Former Executive Board Members

In 2016, we paid pension benefits of €1,667,000 to Executive Board members who had retired before January 1, 2016 (2015: €1,580,000). At the end of the year, the DBO for former Executive Board members was €33.935.000 (2015: €32,758,000). Plan assets of €26.053.000 are available to meet these obligations (2015: €26,716,000).

Executive Board Members’ Holdings of Long-Term Incentives

Members of the Executive Board hold or held share-based payment rights throughout the year under the RSU Milestone Plan 2015 and the SAP SOP 2010 (which were granted in previous years). For information about the terms and details of these programs, see the Notes to the Consolidated Financial Statements section, Note (27).

LTI 2016 Plan

The table below shows Executive Board members’ holdings, on December 31, 2016, of Share Units issued to them under the LTI 2016 plan. The plan is an annual revolving cash-settled long-term incentive scheme with a payout after the vesting period.

 

LTI 2016 Plan (2016 Tranche)

 

Quantity of Share Units   Holding on January 1, 2016   Grants in 2016   Retention Share Units (40%)   Performance Share Units (60%)   Exercised Units   Forfeited Units 1)   Balanced Performance Share Units2)   Holding on December 31, 2016
Bill McDermott (CEO)     122,423   48,969   73,454           122,423
Robert Enslin     40,417   16,167   24,250           40,417
Michael Kleinemeier     37,898   15,159   22,739           37,898
Bernd Leukert     42,687   17,075   25,612           42,687
Luka Mucic     37,898   15,159   22,739           37,898
Gerhard Oswald (until December 31, 2016)     31,924   12,770   19,154     −23,927   17,038   25,035
Stefan Ries
(from April 1, 2016)
    23,987   9,595   14,392           23,987
Steve Singh (from April 1, 2016)     30,368   12,147   18,221           30,368
Total     367,602   147,041   220,561     −23,927   17,038   360,713

1) Forfeiture according to leaver rules

2) To balance disadvantages from leaver rules under the LTI 2016 Plan

 

RSU Milestone Plan 2015

The table below shows Executive Board members’ holdings, on December 31, 2016 and 2015, of RSUs issued to them under the RSU Milestone Plan 2015. The plan is a cash-settled long-term incentive scheme with a payout subsequent to a performance period of one year and an additional holding period of three years. The RSU Milestone Plan 2015 consists of four plan tranches to be issued with respect to the calendar years 2012 through 2015. The RSUs allocated in 2013 have a remaining term of 0.08 years; the RSUs allocated in 2014 have a remaining term of 1.08 years; and the RSUs allocated in 2015 have a remaining term of 2.08 years.

 

RSU Milestone Plan 2015 - Rollforward 2015/2016

Quantity of RSUs   Holding on January 1, 2015   Grants in 2015   Performance- Related Adjustment   Exercised Units   Forfeited Units   Holding on December 31, 2015   Exercised Units Tranche 2012   Holding on December 31, 2016
Bill McDermott (CEO)   255,050   77,099   36,568         368,717   −127,425   241,292
Robert Enslin   14,148   27,656   12,329       54,133     54,133
Michael Kleinemeier (from November 1, 2015)   0   4,622   599       5,221     5,221
Bernd Leukert   14,148   27,656   13,922       55,726     55,726
Luka Mucic   10,757   27,656   13,474       51,887     51,887
Gerhard Oswald   91,490   27,656   13,117         132,263   −45,709   86,554
Total   385,593   192,345   90,009   0   0   667,947   −173,134   494,813

 

The RSUs held as of December 31, 2015, which were issued and not forfeited in 2015, reflect the number of RSUs multiplied by the total target achievement. The total target achievement consists of the addition of the target achievement of the financial KPIs of 112.96% and the adjustment factor based on individual plan participation.

 

RSU Milestone Plan 2015 - Rollforward 2014/2015

Quantity of RSUs   Holding on January 1, 2014   Grants in 2014   Performance- Related Adjustment   Exercised Units   Forfeited Units   Holding on December 31, 2014
Bill McDermott (CEO)   195,562   76,374   −16,886       255,050
Dr. Werner Brandt (until June 30, 2014)   70,151   27,396       27,396   70,151
Gerhard Oswald   70,151   27,396   −6,057     _   91,490
Dr. Vishal Sikka (until May 4, 2014)1)   70,151   27,396     70,151   27,396   _
Robert Enslin (from May 4, 2014)   0   18,164   −4,016       14,148
Bernd Leukert (from May 4, 2014)   0   18,164   −4,016       14,148
Luka Mucic (from July 1, 2014)   0   13,811   −3,054       10,757
Total   406,014   208,701   −34,029   70,151   54,792   455,743

1) According to the termination agreement with Vishal Sikka, the 2012 grants were paid out after the close of the Annual General Meeting of Shareholders in 2016, based on a fixed share price of €52.96. The 2013 grants will be paid out after the close of the Annual General Meeting of Shareholders in 2017 based on a fixed share price of €58.69.

 

The RSUs held as of December 31, 2014, which were issued and not forfeited in 2014, reflect the number of RSUs multiplied by the 77.89% target achievement.

 

RSU Milestone Plan 2015 - Rollforward 2013/2014

Quantity of RSUs   Holding on January 1, 2013   Grants in 2013   Performance- Related Adjustment   Exercised Units   Forfeited Units   Holding on December 31, 2013
Bill McDermott (co-CEO)   127,425   73,289   −5,152       195,562
Jim Hagemann Snabe (co-CEO)1)   127,425   73,289   −5,152   195,562    
Dr. Werner Brandt   45,709   26,290   −1,848       70,151
Gerhard Oswald   45,709   26,290   −1,848       70,151
Dr. Vishal Sikka   45,709   26,290   −1,848       70,151
Total   391,977   225,448   −15,849   195,562   0   406,014

1) According to the termination agreement with Jim Hagemann Snabe, the 2012 and 2013 grants were paid out after the close of the Annual General Meeting of Shareholders on May 21, 2014, based on a fixed share price of €52.96 for the 2012 grants and €58.69 for the 2013 grants.

 

The RSUs held as of December 31, 2013, which were issued and not forfeited in 2013, reflect the number of RSUs multiplied by the 92.97% target achievement.

 

RSU Milestone Plan 2015 - Rollforward 2012/2013

Quantity of RSUs   Holding on January 1, 2012   Grants in 2012   Performance- Related Adjustment   Exercised Units   Forfeited Units   Holding on December 31, 2012
Bill McDermott (co-CEO)     95,414   32,011       127,425
Jim Hagemann Snabe (co-CEO)     95,414   32,011       127,425
Dr. Werner Brandt     34,226   11,483       45,709
Gerhard Oswald     34,226   11,483       45,709
Dr. Vishal Sikka     34,226   11,483       45,709
Total     293,506   98,471       391,977

 

The RSUs held as of December 31, 2012, reflect the number of RSUs issued in 2012 multiplied by the 133.55% target achievement.

SAP SOP 2010

The table below shows Executive Board members’ holdings, on December 31, 2016, of virtual share options issued to them under the SAP SOP 2010 since its inception. The strike price for an option is 115% of the base price. The issued options have a term of seven years and can only be exercised on specified dates after the vesting period. The options issued in 2010 were exercisable beginning in September 2014 and the options issued in 2011 were exercisable beginning in June 2015.

 

SAP SOP 2010 Virtual Share Options

    Year Granted   Holding on
January 1, 2016
  Strike Price per Option   Rights Exer-cised in 2016   Price on Exercise Date   For-
feited Rights
  Holding on December 31, 2016
Quantity of Options   Remaining Term in Years     Quantity of Options     Quantity of Options   Quantity of Options   Remaining Term in Years
 
Bill McDermott
(CEO)
  2010   135,714   1.69   40.80         135,714   0.69
2011   112,426   2.44   48.33         112,426   1.44
Total     248,140       0       248,140    

 

Total Expense for Share-Based Payment

Total expense for the share-based payment plans of Executive Board members was recognized as follows.

 

Total Expense for Share-Based Payment

€ thousands   2016   2015
Bill McDermott (CEO)   6,525.3   12,291.1
Robert Enslin   1,185.8   1,851.2
Michael Kleinemeier
  635.2   364.7
Bernd Leukert   1,237.2   2,208.6
Luka Mucic   1,123.5   2,148.5
Gerhard Oswald
(until December 31, 2016)
  2,693.6   3,445.6
Stefan Ries (from April 1, 2016)   367.5  
Steve Singh (from April 1, 2016)   465.3  
Total   14,233.4   22,309.7

 

The expense is recognized in accordance with IFRS 2 (Share-Based Payments) and consists exclusively of obligations arising from Executive Board activities.

Shareholdings of Executive Board Members

No member of the Executive Board holds more than 1% of the ordinary shares of SAP SE. Members of the Executive Board held a total of 85,985 SAP shares on December 31, 2016 (2015: 45,309 shares).

Executive Board: Other Information

We did not grant any compensation advance or credit to, or enter into any commitment for the benefit of, any member of our Executive Board in 2016 or the previous year.

As far as the law permits, SAP SE and its affiliated companies in Germany and elsewhere indemnify and hold harmless their respective directors and officers against and from the claims of third parties. To this end, we maintain directors’ and officers’ (D&O) group liability insurance. The policy is annual and is renewed from year to year. The insurance covers the personal liability of the insured group for financial loss caused by its managerial acts and omissions. The current D&O policy includes an individual deductible for Executive Board members of SAP SE as required by section 93 (2) of the German Stock Corporation Act.

Compensation for Supervisory Board Members

Compensation System

Supervisory Board members’ compensation is governed by our Articles of Incorporation, section 16.

Each member of the Supervisory Board receives, in addition to the reimbursement of their expenses, an annual basic compensation of €165,000. The chairperson receives €275,000 and the deputy chairperson €220,000.

For membership of the Audit Committee, Supervisory Board members receive an additional fixed annual compensation of €16,500, and for membership of any other Supervisory Board committee €11,000, provided that the committee concerned has met in the year. The chairperson of the Audit Committee receives €27,500, and the chairpersons of the other committees receive €22,000. The fixed remuneration is payable after the end of the year.

Any members of the Supervisory Board having served for less than the entire year receive one-twelfth of the annual remuneration for each month of service commenced. This also applies to the increased compensation of the chairperson and the deputy chairperson(s) and to the remuneration for the chairperson and the members of a committee.

 

Supervisory Board Members' Compensation in 2016

€ thousands   2016   2015
Fixed Compensation   Compensation for Commit-
tee Work
  Total   Fixed Compensation   Compen-sation for Commit-
tee Work
  Total
Prof. Dr. h.c. mult. Hasso Plattner (chairperson)   275.0   88.0   363.0   275.0   66.0   341.0
Margret Klein-Magar (deputy chairperson)   220.0   33.0   253.0   215.4   29.3   244.8
Pekka Ala-Pietilä   165.0   33.0   198.0   165.0   27.5   192.5
Panagiotis Bissiritsas   165.0   38.5   203.5   165.0   32.1   197.1
Martin Duffek (from May 20, 2015)   165.0   27.5   192.5   110.0   18.3   128.3
Prof. Anja Feldmann   165.0   22.0   187.0   165.0   22.0   187.0
Prof. Dr. Wilhelm Haarmann   165.0   44.0   209.0   165.0   44.0   209.0
Andreas Hahn (from May 20, 2015)   165.0   22.0   187.0   110.0   14.7   124.7
Prof. Dr. Gesche Joost (from May 28, 2015)   165.0   22.0   187.0   110.0   11.0   121.0
Lars Lamadé   165.0   22.0   187.0   165.0   22.0   187.0
Bernard Liautaud   165.0   33.0   198.0   165.0   22.0   187.0
Christine Regitz (from May 20, 2015)   165.0   22.0   187.0   110.0   14.7   124.7
Dr. Erhard Schipporeit   165.0   27.5   192.5   165.0   27.5   192.5
Robert Schuschnig-Fowler (from May 20, 2015)   165.0   11.0   176.0   110.0   7.3   117.3
Dr. Sebastian Sick (from May 20, 2015)   165.0   22.0   187.0   110.0   14.7   124.7
Jim Hagemann Snabe   165.0   22.0   187.0   165.0   22.0   187.0
Pierre Thiollet (from May 20, 2015)   165.0   11.0   176.0   110.0   7.3   117.3
Prof. Dr.-Ing. Dr.-Ing. E.h. Klaus Wucherer   165.0   16.5   181.5   165.0   16.5   181.5
Former Supervisory Board members   NA   NA   NA   504.2   59.6   563.8
Total   3,135.0   517.0   3,652.0   3,249.6   478.5   3,728.1

 

In addition, we reimburse members of the Supervisory Board for their expenses and the value-added tax payable on their compensation.

In total, we received services from members of the Supervisory Board (including services from employee representatives on the Supervisory Board in their capacity as employees of SAP) in the amount of €1,040,400 (2015: €1,282,800). This amount includes fees paid to Linklaters LLP in Frankfurt am Main, Germany (of which Supervisory Board member Wilhelm Haarmann is a partner), of €0 (2015: €224,500).

Long-Term Incentives for the Supervisory Board

We do not offer members of the Supervisory Board share-based payment for their Supervisory Board work. Any share-based payment awards received by employee-elected members relate to their position as SAP employees and not to their work on the Supervisory Board.

Shareholdings of Supervisory Board Members

Supervisory Board chairperson Hasso Plattner and the companies he controlled held 87,860,661 SAP shares on December 31, 2016 (December 31, 2015: 90,248,789 SAP shares), representing 7.152% (2015: 7.346%) of SAP’s share capital. No other member of the Supervisory Board held more than 1% of the SAP SE share capital at the end of 2016 or of the previous year. Members of the Supervisory Board held a total of 87,875,732 SAP shares on December 31, 2016 (December 31, 2015: 90,262,686 SAP shares).

Supervisory Board: Other Information

We did not grant any compensation advance or credit to, or enter into any commitment for the benefit of, any member of our Supervisory Board in 2016 or the previous year.

Hasso Plattner, the chairperson of the Supervisory Board, entered into a consulting contract with SAP after joining the Supervisory Board in May 2003. The contract does not provide for any compensation. The only cost we incurred under the contract was the reimbursement of expenses.

As far as the law permits, we indemnify Supervisory Board members against, and hold them harmless from, claims brought by third parties. To this end, we maintain directors’ and officers’ (D&O) group liability insurance. The current D&O policy does not include an individual deductible for Supervisory Board members as envisaged in the German Corporate Governance Code.

Back to top