SAP reviews options program
SAP is considering changing its employee stock-option program as part of a review of its compensation strategy.
An SAP compensation committee began studying the company's options program a couple of months ago to look at whether it was "in step with the industry," said Bill Wohl, a spokesman for SAP, which employs nearly 29,000 people worldwide.
The committee hasn't concluded the review yet, but any changes it recommends, if any, must be approved by the company's shareholders at its annual meeting, he added. The next annual meeting is nearly a year away.
In the midst of SAP reviewing its stock-options program, Microsoft said earlier this week that it would grant its employees shares rather than stock options starting this fall, which marks a major shift in its employee-compensation plan. As one of the largest companies in the world, Microsoft's moves are closely watched by business leaders. Some speculate that its decision may signal a shift in the compensation practices in the high-tech industry, where stock-option-laden packages created many millionaires among rank-and-file workers in the boom years of the 1990s.
SAP's review was already under way when Microsoft announced its decision, Wohl said. He also stressed that the Walldorf, Germany-based company did not undertake the review in response to the software giant's switch. "We were already taking a look at this," he said.
Wohl did not rule out the possibility that Microsoft's move could ultimately influence SAP's strategy. What Microsoft and other major companies do, he said, "goes into our thinking."
He noted, however, that Microsoft operates under a different set of rules than does SAP, which is subject to Germany's employment and financial laws. SAP only began a broad-based employee stock-option program in 1998, later than did many competitors in Silicon Valley--and after up-and-comers Siebel Systems and Ariba started luring executives away from SAP.
Wohl said he didn't know when the SAP compensation committee, which is led by its chief financial officer, its global head of human resources and its executive board member in charge of employee relations, would complete its review. SAP had not yet set a timetable on it.