SAP’s Bill McDermott Steps Aside For Two Co-CEOs

SAP has carried out an immediate management reshuffle after long-serving CEO Bill McDermott opted not to renew his contract as head of the German enterprise software giant.

Following that decision, SAP immediately appointed two SAP executives as co-CEOs, namely Jennifer Morgan and Christian Klein. It should be noted that rival Oracle is also run by two co-CEOs, who also happen to be a man and women (Mark Hurd and Safra Catz).

It is reported that McDermott would have had to decide on renewing his contract in early 2020. But he opted not to after consulting with SAP co founder Professor Hasso Plattner. McDermott has reportedly denied his decision was influenced by the arrival this year of activist investor Elliott into SAP’s board.

Management changes

SAP announced the management reshuffle with its “next generation leadership team” ahead of the release of quarterly results.

“SAP SE today announced that Bill McDermott has decided not to renew his contract and is stepping down from his position as chief executive officer,” said the firm. “In activating the company’s long-term succession plan, SAP Executive Board Members Jennifer Morgan and Christian Klein have been appointed co-chief executive officers, effective immediately, with the approval of the Supervisory Board of SAP SE.”

It is understood that McDermott will remain in an advisory capacity until the end of the year to ensure a smooth transition.

McDermott had been co-CEO of SAP since February 2010, when then CEO Leo Apotheker stepped down after his contract was not renewed. In 2014 McDermott became sole CEO of the company.

“SAP would not be what it is today without Bill McDermott,” said Professor Plattner, chairman of the Supervisory Board of SAP SE. “Bill made invaluable contributions to this company and he was a main driver of SAP’s transition to the cloud, which will fuel our growth for many years to come. We thank him for everything he has done for SAP.”

“We also congratulate Jennifer and Christian for this opportunity to build on the strong foundation we have for the future of SAP,” said Professor Plattner. “Bill and I made the decision over a year ago to expand Jennifer and Christian’s roles as part of a long-term process to develop them as our next generation of leaders. We are confident in their vision and capabilities as we take SAP to its next phase of growth and innovation.”

“Every CEO dreams of being able to transition a company to its next generation from a position of significant strength,” said McDermott. “When you look at where we were and where we are, I simply could not be prouder of what this company has achieved over the past decade. I am thankful for the opportunity to lead one of the world’s finest companies.”

“Now is the moment for everyone to begin an exciting new chapter, and I am confident that Jennifer and Christian will do an outstanding job,” the New Yorker added. “I look forward to supporting them as they finish 2019 and lay the foundation for 2020 and beyond.”

Ten years

McDermott has been with SAP since 2002, first as head of its North American operations.

He then joined the Executive Board in 2008, and since 2009 he served as CEO and oversaw a period of dramatic growth for SAP, including expanding its portfolio and initiating a major shift to cloud computing.

New CEO’s Morgan and Klein serve on the Executive Board. Morgan joined SAP in 2004, most recently served as president of the Cloud Business Group.

Klein is a SAP veteran, starting his career at SAP two decades ago as a student. He most recently served as the company’s chief operating officer.

McDermott, quoted by Reuters when speaking with reporters, denied bowing to pressure from Elliott. He chose to depart on his own terms, in consultation with Plattner.

“I’ve enjoyed a great run and an exciting ride,” the 58-year-old reportedly said. “You get to the point where you’ve done what you set out to do and then some.”

SAP is expecting to publishes final third-quarter results on 21 October.

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