SAP Execs Announce A Great Quarter But Warn Employees That Bonuses Are Not A Sure Thing

SAP co-ceo Bill McDermott

Photo: AP

SAP is about to post one its best quarters ever. But that doesn’t mean employees will automatically get a bonus, co-CEOs Jim Hagemann Snabe and Bill McDermott warned employees yesterday.The execs told employees that “a continuation of the current spending levels could affect our bonus payout,” reports Bloomberg.

Employees might have expected a great bonus because SAP pre-announced a beat-the-street quarter yesterday.

SAP headlined its press release to note its “best-ever second-quarter performance” and said it had “significantly outperform[ed] market expectations” with more than $1.2 billion in revenues from software.

SAP said operating profit rose 7% to €920 million ($1.13 billion) from €860 million in the year-ago quarter.  Analysts were expecting €880 million. The company will release its full second-quarter results on July 24.

But profit grew more slowly than sales. Operating margin for the quarter fell 0.8 percentage points to 30 per cent. And unless SAP hits both its top-line and bottom-line goals, bonuses could be affected, a SAP spokesperson told Business Insider.

SAP says its expenses grew because of its $3.4 billion acquisition of SuccessFactors and that it grew its payroll by about 5,200 new employees. It also got rid of some employees, spending €31 million ($37 million) on severance compared to €13 million ($16 million) in 2011.

SAP’s got some big spending still to do, too. The company announced in May that it was buying e-commerce software company Ariba for 4.3 billion. This will add about 2,600 employees to the payroll.

Meanwhile, SAP is also spending a half-billion dollars to market Hana, an in-memory database product that competes with Oracle. That figure includes a commitment to invest $155 million in startups building on Hana through its SAP Ventures arm.

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