Corporate compensation

SAP’s McDermott tops DAX executive pay table

SAP SE Chief Executive Officer Bill McDermott Holds Forth-quarter Results News Conference
Mr. McDermott’s salary jumped from €9.9 million to €14 million last year. Source: Bloomberg.

New compensation rules have made quite a difference at SAP’s executive board: According to the software company’s 2016 annual report published Tuesday, SAP’s eight most senior executives were paid a total of €43.3 million, or $45.9 million, last year. That’s more than three times as much as in 2015.

Bill McDermott, the company’s American chief executive, earned almost €14 million and overtakes Daimler CEO Dieter Zetsche as the best-paid boss among the 30 companies of Germany’s DAX benchmark index.

Mr. McDermott received €1.4 million in fixed compensation, €2.4 million in short-term variable salary and an €8-million variable long-term incentive “tied to the price of SAP shares to reward performance over multiple years,” according to the report. On top of this, he was entitled €1.6 million in fringe benefits, such as grants for insurance or expenses for double household management and flights, plus another €571,000 in pension entitlement and other benefits.

In 2015, Mr. McDermott received €9.9 million, the second-highest salary of all DAX-listed companies’ CEOs.

Former top earner Dieter Zetsche will receive significantly less for 2016 than he did in the previous year. The chief executive of Daimler, the company that makes luxury cars Mercedes-Benz, will only collect €7.6 million, according to the carmaker’s annual report published in mid-February.

Daimler achieved the goals that management set for 2016. However, variable incentives were tied to the company’s operating profit, which fell by 2 percent to €12.9 billion. Additionally, Mr. Zetsche’s share-based compensation also shrunk because Daimler shares were less valuable in 2016 than in the previous year.

Auto bosses usually top the DAX managers’ compensation chart. Before he resigned, Volkswagen’s former boss, Martin Winterkorn, was Germany’s best-paid CEO with an annual salary of €17.5 million. Since the outbreak of the Dieselgate emission scandal, VW’s supervisory board has capped executive pay at €10 million a year for the CEO and €5.5 million for other executive board members.

But the ranking could still change in the coming weeks, since not all of the 30 DAX-listed companies have submitted their annual reports yet.

 

Lars Ophüls is a reporter for Handelsblatt in Düsseldorf. Jean-Michel Hauteville, a Handelsblatt Global editor based in Berlin, contributed to this story. To contact the author: ophuels@handelsblatt.com.

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