SAP Drops Co-CEO Structure to Simplify Leadership During Pandemic
April 20 2020 - 8:01PM
Dow Jones News
By Maria Armental
SAP SE abandoned its dual-chief-executive structure, less than
six months after the German business-software giant embraced the
leadership model, as the company seeks to simplify its leadership
structure amid the coronavirus pandemic.
SAP said Co-CEO Jennifer Morgan, 48 years old, would leave the
company on April 30.
"More than ever, the current environment requires companies to
take swift, determined action which is best supported by a very
clear leadership structure," SAP said in a written statement.
"Therefore, the decision to transfer from Co-CEO to sole CEO model
was taken earlier than planned to ensure strong, unambiguous
steering in times of an unprecedented crisis."
Christian Klein, 39, would stay on as sole CEO, SAP said late
Monday in New York.
Ms. Morgan, who is American, joined SAP in 2004 and ran the
company's cloud-computing business before being elevated last year
to co-CEO. Mr. Klein, who is German, has been at SAP since 1999 and
served as chief operating officer before his co-CEO
appointment.
SAP, which is scheduled to report first-quarter results on
Tuesday, this month cut its full-year guidance, warning that
business activity in March had slowed. Rival International Business
Machines Corp. also said Monday that it noticed a change in client
behavior in March. "There was effectively a pause as clients
understandably dealt with their most pressing needs," IBM Chief
Financial Officer Jim Kavanaugh told analysts.
SAP's revised outlook includes full-year sales coming in between
EUR27.8 billion and EUR28.5 billion ($30.2 billion and $31 billion)
at constant exchange currencies from previous estimates of between
EUR29.2 billion and EUR29.7 billion.
The abrupt change in leadership comes just months after the
company decided to restore the dual-CEO structure as Bill McDermott
ended his five-year run at the company.
At the time SAP Chairman Hasso Plattner called the work-sharing
arrangement "time-tested at SAP with multiple prior instances of
success."
Mr. McDermott has since joined ServiceNow Inc. as CEO.
The twin-CEO structure has had a mixed record at the few
companies that have tried it over the years. Oracle abandoned its
dual-CEO structure after the death of Mark Hurd last year, leaving
Safra Catz as the database provider's sole chief executive.
Business-software provider Salesforce.com Inc. in February said
Co-Chief Executive Keith Block was stepping down from his role,
just 18 months after taking the job, ending that company's brief
experiment with dual CEOs and leaving Marc Benioff in charge.
A leadership duo at Deutsche Bank AG struggled after a series of
financial missteps and regulatory penalties led both co-CEOs to
resign in 2015.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
April 20, 2020 19:46 ET (23:46 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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