SAP, Europe’s largest technology conglomerate, could be seeing its shareholder confidence waver, reports said Wednesday (May 10).
SAP’s supervisory board only narrowly secured shareholder approval for its actions during its annual general meeting, securing 50.49 percent of the vote. Nearly 70 percent of SAP’s share capital was represented at the Wednesday meeting, reports said.
According to Fortune Magazine, shareholder votes during these meetings are “normally routine” for German companies, and they “effectively [signal] investor confidence in the board.”
But SAP shareholders have been clashing with the board recently, calling for an update to the firm’s remuneration system after SAP Chief Executive Bill McDermott’s compensation raised eyebrows. The executive reportedly saw a nearly $17 million payout in 2016.
Before the Wednesday vote, reports said, Institutional Shareholder Services, leading advisors to SAP shareholders, had warned them not to vote in favor of the supervisory board’s lack of action to take up the remuneration issue. After the vote, some shareholders expressed dismay despite supervisory board Chairman and SAP Co-Founder Hasso Plattner vowing to improve transparency on compensation matters for shareholders.
“Too little, too late,” reflected Christiane Hoelz of shareholders group DSW. “SAP did not act, but only reacted.”
“Our executive payment must be seen in comparison with other software companies and must be competitive,” said Plattner during the meeting. Analysts have said McDermott’s annual payout could hit $44.5 million, but Plattner said for that to happen, SAP market value would have to triple between now and 2021.
Earlier this year, reports said McDermott overtook Daimler CEO Dieter Zetsche as Germany’s best-paid CEO in 2015. SAP changed its management pay system that year, reports explained.