EX-99.1 2 a18-38214_4ex99d1.htm EX-99.1

Exhibit 99.1

 


 

 


 

About This Report

 

 


Content

 

The SAP Integrated Report 2018 presents our full-year financial, social, and environmental performance in one integrated report (“SAP Integrated Report”) available at www.sapintegratedreport.com. Since 2012, we have taken into consideration the recommendations of the International Integrated Reporting Framework.

 

The Integrated Report also serves as our United Nations (UN) Global Compact progress report. In 2018, for the first time, we also report on our contribution to the UN Sustainable Development Goals (SDGs).

 

Basis of Presentation

 

Our Combined Management Report is prepared in accordance with sections 289, 289a, 289f, 315, 315a, and 315d of the German Commercial Code and German Accounting Standards No. 17 and 20. The Combined Management Report is also a management commentary complying with the International Financial Reporting Standards (IFRS) Practice Statement Management Commentary.

 

Our Consolidated Financial Statements are prepared in accordance with IFRS. Our executive management has confirmed the effectiveness of our internal controls over financial reporting.

 

Our Non-Financial Report is prepared in accordance with sections 289b and 315b of the German Commercial Code, which require us to report, for both, SAP SE and SAP Group, on social, environmental, and other non-financial matters. All non-financial information stipulated in the German Commercial Code, sections 315c and 289c that is relevant to understand SAP’s development, performance of the business, and the position of the Group and SAP SE is included in our Combined Management Report. Rather than repeating this information, our Non-Financial Report (which is part of this integrated report at http://www.sap.com/investors/sap-2018-combined-non-financial-report) provides references to the sections of our Combined Management Report in which the required disclosures are made.

 

The social and environmental data and information included in the SAP Integrated Report is prepared in accordance with the GRI Standards: Core option. This GRI option indicates that a report contains the minimum information needed to understand the nature of the organization, its material topics and related impacts, and how these are managed. We apply the GRI principles (sustainability context, stakeholder inclusiveness, materiality, and completeness) for defining report content. We also report on SDGs identified as material.

 

Greenhouse gas data is prepared based on the Greenhouse Gas Protocol.

 

Data

 

All financial and non-financial data and information for the reporting period is reported utilizing SAP software solutions and sourced from the responsible business units.

 

The reporting period is fiscal year 2018. The report encompasses SAP SE and all subsidiaries of the SAP Group. To make this report as current as possible, we have included relevant information available up to the auditor’s opinion and the responsibility statement dated February 20, 2019. The report is available in English and German.

 

Independent Audit and Assurance

 

KPMG AG Wirtschaftsprüfungsgesellschaft has audited our Consolidated Financial Statements and our Combined Management Report (including the information to which our Non-Financial Report makes references). Additionally, KPMG has provided assurance on selected non-financial data and information in accordance with the International Standard on Assurance Engagements (ISAE) 3000 and 3410 (“Assurance Engagements on Greenhouse Gas Statements”), two pertinent standards for the assurance of sustainability reporting. Where our SAP Integrated Report makes reference to SAP’s public Web site, that Web site information is unaudited. Both the Independent Auditor’s Report and the Independent Assurance Report for non-financial information are available in the Independent Auditor’s Report section and the Independent Assurance Report section.

 

Concept and Realization

 

This report was designed by SAP and created with SAP S/4HANA software and the SAP Disclosure Management application.


 

2

About This Report

 


 

Key Facts

 

 

 

€ millions, unless otherwise stated

 

2018

 

2017

 

in %

Revenues

 

 

 

 

 

 

Cloud subscriptions and support (IFRS)

 

4,993

 

3,769

 

32

Cloud subscriptions and support (non-IFRS)

 

5,027

 

3,771

 

33

Software licenses (IFRS)

 

4,647

 

4,872

 

–5

Software licenses (non-IFRS)

 

4,647

 

4,872

 

–5

Software support (IFRS)

 

10,981

 

10,908

 

1

Software support (non-IFRS)

 

10,982

 

10,908

 

1

Cloud and software (IFRS)

 

20,622

 

19,549

 

5

Cloud and software (non-IFRS)

 

20,655

 

19,552

 

6

Total revenue (IFRS)

 

24,708

 

23,461

 

5

Total revenue (non-IFRS)

 

24,741

 

23,464

 

5

Applications, Technology & Services Segment revenue

 

20,806

 

20,218

 

3

SAP Business Network Segment revenue

 

2,629

 

2,261

 

16

Customer Experience Segment revenue

 

951

 

643

 

48

Share of predictable revenue (IFRS, in %)

 

65

 

63

 

3

Share of predictable revenue (non-IFRS, in %)

 

65

 

63

 

3

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

Cost of cloud subscriptions and support (IFRS)

 

–2,068

 

–1,660

 

25

Cost of cloud subscriptions and support (non-IFRS)

 

–1,855

 

–1,427

 

30

Cost of software licenses and support (IFRS)

 

–2,092

 

–2,234

 

–6

Cost of software licenses and support (non-IFRS)

 

–1,962

 

–2,044

 

–4

Cost of cloud and software (IFRS)

 

–4,160

 

–3,893

 

7

Cost of cloud and software (non-IFRS)

 

–3,817

 

–3,471

 

10

Total cost of revenue (IFRS)

 

–7,462

 

–7,051

 

6

Total cost of revenue (non-IFRS)

 

–6,969

 

–6,462

 

8

Research and development (IFRS)

 

–3,624

 

–3,352

 

8

 

 

 

 

 

 

 

Profits and Margins

 

 

 

 

 

 

Cloud subscriptions and support margin (in % of corresponding revenue, IFRS)

 

58.6

 

56.0

 

5

Cloud subscriptions and support margin (in % of corresponding revenue, non-IFRS)

 

63.1

 

62.2

 

1

Software and support gross margin (IFRS, in %)

 

86.6

 

85.8

 

1

Software and support gross margin (non-IFRS, in %)

 

87.4

 

87.0

 

0

Cloud and software margin (in % of corresponding revenue, IFRS)

 

79.8

 

80.1

 

0

Cloud and software margin (in % of corresponding revenue, non-IFRS)

 

81.5

 

82.2

 

–1

Total gross margin (in % of total revenue, IFRS)

 

69.8

 

69.9

 

0

Total gross margin (in % of total revenue, non-IFRS)

 

71.8

 

72.5

 

–1

Applications, Technology & Services Segment gross margin (in % of corresponding revenue)

 

73

 

74

 

–1

SAP Business Network Segment gross margin (in % of corresponding revenue)

 

69

 

68

 

2

Customer Experience Segment gross margin (in % of corresponding revenue)

 

79

 

80

 

–2

Operating profit (IFRS)

 

5,703

 

4,877

 

17

Operating profit (non-IFRS)

 

7,163

 

6,769

 

6

Operating margin (in % of total revenue, IFRS)

 

23.1

 

20.8

 

11

Operating margin (in % of total revenue, non-IFRS)

 

29.0

 

28.9

 

0

Free cash flow

 

2,843

 

3,770

 

–25

 

 

Key Facts

3

 


 

€ millions, unless otherwise stated

 

2018

 

2017

 

∆ in%

Net liquidity

 

–2,493

 

–1,479

 

69

Days’ sales outstanding (DSO, in days)

 

70

 

70

 

0

Equity ratio (total equity in % of total assets)

 

56

 

60

 

–7

Effective tax rate (IFRS, in %)

 

27.0

 

19.5

 

38

Effective tax rate (non-IFRS, in %)

 

26.3

 

22.8

 

16

 

 

 

 

 

 

 

Order Entry

 

 

 

 

 

 

New cloud bookings

 

1,814

 

1,448

 

25

Deferred cloud subscriptions and support revenue (IFRS)1)

 

3,047

 

2,771

 

10

Orders – Number of on-premise software deals (in transactions)

 

58,530

 

59,147

 

–1

Share of software orders greater than € 5 million (in % of total software order entry)

 

29

 

30

 

–3

Share of software orders less than € 1 million (in % of total software order entry)

 

39

 

40

 

–3

 

 

 

 

 

 

 

Key SAP Stock Facts

 

 

 

 

 

 

Earnings per share, basic (in €)

 

3.42

 

3.35

 

2

Earnings per share, basic (non-IFRS, in €)

 

4.35

 

4.43

 

–2

Dividend per share2)(in €)

 

1.50

 

1.40

 

7

Market capitalization1) (in € billions)

 

106.80

 

114.80

 

–7

 

 

 

 

 

 

 

Employees and personnel expenses

 

 

 

 

 

 

Number of employees1), 3)

 

96,498

 

88,543

 

9

Personnel expenses per employee – excluding share-based payments (in € thousands)

 

115

 

121

 

–5

Women working at SAP (in %)

 

33.0

 

32.8

 

0

Women in management1) (total, in % of total number of employees)

 

25.7

 

25.4

 

1

Employee Engagement Index (in %)

 

84

 

85

 

–1

Business Health Culture Index (in %)

 

78

 

79

 

–1

Leadership Trust Index (LTI, in %)

 

60

 

61

 

–2

Employee retention (in %)

 

93.9

 

94.6

 

–1

 

 

 

 

 

 

 

Customer

 

 

 

 

 

 

Customer Net Promoter Score4) (in %)

 

–5.0

 

17.8

 

–128

 

 

 

 

 

 

 

Environment

 

 

 

 

 

 

Net Greenhouse gas emissions (in kilotons)

 

310

 

325

 

–5

Total energy consumption (in GWh)

 

919

 

920

 

0

Total data center electricity (in GWh)

 

318

 

265

 

20

 

1) Numbers based on at year-end.

 

 

 

 

 

 

2) Numbers are based on the proposed dividend and on level of treasury stock at year-end.

 

 

 

 

 

 

3) Full-time equivalents.

 

 

 

 

 

 

4) Due to changes in sampling, Customer NPS is not fully comparable to the prior year’s score.

 

 

 

 

 

 

 

 

4

Key Facts

 


 

Contents

 

 

 

About This Report

2

Key Facts

3

 

 

Contents

5

 

 

To Our Stakeholders

7

 

 

Letter from the CEO

8

SAP Executive Board

10

Investor Relations

12

Corporate Governance Report

15

Report by the Supervisory Board

18

Compensation Report

26

Responsibility Statement

43

Independent Auditor’s Report

44

 

 

Combined Management Report

50

 

 

General Information About This Management Report

51

Strategy and Business Model

52

Performance Management System

57

Products, Research & Development, and Services

64

Security, Privacy, and Data Protection

70

Customers

72

Employees and Social Investments

73

Energy and Emissions

78

Financial Performance: Review and Analysis

81

Corporate Governance Fundamentals

99

Business Conduct

101

Risk Management and Risks

103

Expected Developments and Opportunities

123

 

 

Consolidated Financial Statements IFRS

130

 

 

Consolidated Financial Statements IFRS

131

Notes

136

Section A – Customers

139

Section B – Employees

145

Section C – Financial Results

153

Section D – Invested Capital

161

Section E – Capital Structure, Financing, and Liquidity

169

Section F – Management of Financial Risk Factors

175

Section G – Other Disclosures

193

Management’s Annual Report on Internal Control over Financial Reporting in the Consolidated Financial Statements

209

 

 

Further Information on Economic, Environmental, and Social Performance

210

 

 

About This Further Information on Economic, Environmental, and Social Performance

211

Connectivity of Financial and Non-Financial Indicators

212

Materiality

220

Stakeholder Engagement

222

Sustainability Management and Policies

223

Our Contribution to the UN Sustainable Development Goals

225

Human Rights and Labor Standards

227

Sustainable Procurement

229

 

 

5


 

Waste and Water

231

Public Policy

232

Memberships

233

Non-Financial Notes: Social Performance

234

Non-Financial Notes: Environmental Performance

235

GRI Index and UN Global Compact Communication on Progress

240

Task Force on Climate-Related Financial Disclosure (TCFD)

245

Management’s Acknowledgement of the SAP Integrated Report 2018

246

Assurance Report of the Independent Auditor on selected qualitative and quantitative sustainability disclosures

247

 

 

Additional Information

249

 

 

Five-Year Summary

250

Glossary

254

Financial Calendar and Addresses

266

Financial and Sustainability Publications

267

Publication Details

268

 

 

6


 

To Our Stakeholders

 

 

 

 

 

 

 

Letter from the CEO

8

SAP Executive Board

10

Investor Relations

12

Corporate Governance Report

15

Report by the Supervisory Board

18

Compensation Report

26

Responsibility Statement

43

Independent Auditor’s Report

44

 

 

7


 

To Our
Stakeholders

Combined
Management Report

Consolidated Financial
Statements IFRS

Further Information on Economic,
Environmental, and Social Performance

Additional
Infomation

 

 

 

 

 

Letter from the CEO

 

 

 

 


Dear Stakeholders,

 

Thank you for investing your time in the SAP Integrated Report 2018. In this experience, you will find a comprehensive assessment of a strong growth company. For seven years now, we have measured ourselves in a holistic fashion. This report is to empower you, our stakeholders, to make an informed judgement about the quality and sustainability of SAP.

 

What we accomplished in 2018 is the latest in our track record of innovation and growth. This does not happen by accident. On the contrary, it reflects the talent, dedication, and professional excellence of our customers, partners, and employees around the world.

 

As CEO, I can tell you that I am proud of SAP, honored by the opportunity to represent this company, and highly optimistic about our ability to help the world run better and improve people’s lives far into the foreseeable future.

Earning Your Trust

 

Trust is the ultimate human currency.

 

This is one reason our strong performance in 2018 means so much to us. We made promises and we kept them. Our cloud revenue is now larger than our software revenue and it became a main growth driver in our business, growing at 38% (non-IFRS at constant currencies). We delivered over 24.7 billion in total revenue (non-IFRS) and 7.2 billion in operating profit (non-IFRS) – the most ever. We met or exceeded every aspect of our financial guidance to the capital markets, guidance we increased three times during the year to account for strong momentum.

 

We have a loyal, committed, and engaged workforce. Ninety-three percent of our employees told us they are proud to work for SAP, which is eight percentage points higher than the industry average. Through our corporate social responsibility initiatives, our colleagues volunteered a quarter of a million hours and reached four million people in 2018 alone. While growing the entire size of the company by 10%, we beat our ambition to shrink our carbon footprint by nearly 5%.


 

 

8

 

Letter from the CEO

 


 

To Our
Stakeholders

Combined
Management Report

Consolidated Financial
Statements IFRS

Further Information on Economic,
Environmental, and Social Performance

Additional
Infomation

 

 

 

 

 


Even as we feel the momentum behind the company, we face the same turmoil in the macro environment that impacts all companies. Our stock reached a record high in September but also came under pressure as world markets experienced a very turbulent final quarter. While we ended 2018 down 7%, the stock still outperformed the DAX index by 11 percentage points. And we are already seeing a return to positive momentum in the early weeks of 2019.

 

One of the hallmarks of any strong company is the distribution of success to its stakeholders. In this spirit, I am pleased to announce that, pending approval at the Annual General Meeting, SAP will return a dividend of 1.50 per share to shareholders, a 7% increase over last year’s dividend.

 

Securing Our Future

 

Looking back, we have always based SAP’s strategy on where the world is going, not where it has already been.

 

We did this with SAP HANA, a business data platform that shattered the status quo database market. We did this with a new era of applications built on SAP HANA. Now we move to a new and defining chapter in our SAP HANA journey.

 

This is now, beyond any doubt, an experience economy. Each of us are shaped by our experiences. We have real power not only to express our sentiment but also to actively shape the relationships we have with the institutions around us – public, private, and non-profit.

 

For SAP, this is the burning question we must help our customers to address.

 

Throughout our 47-year history, SAP has helped companies operate in a constantly changing economy. Our solutions are industrial-grade, capable of powering the most sophisticated businesses as they help deliver highly complex business models in nearly every country on Earth.

 

“Experience Management” is a paradigm-shifting category in the business software industry. No longer can enterprises operate without constantly asking “why?” We acquired Qualtrics to help us provide this operational capacity to the individuals our customers are serving.

 

Why are people frustrated? Why are they loyal? Why are they looking elsewhere?

 

The answers to these questions will not only pave the road to sustainable business success but they will also help intelligent enterprises recapture the US$1.6 trillion that is currently lost due to customer attrition.

 

Our stakeholders should expect SAP will reach new heights when experience data (“X”) from the Qualtrics platform joins the operational data (“O”) from 77% of transactions on the SAP platform.

 

X+O is the essential equation for winning in this experience economy. We expect this highly differentiated offering to drive SAP to grow our cloud revenue more than three times, reaching more than 35 in billion total revenue by 2023, and powering strong operating profit growth.

Confronting Our Challenges

 

Rather than leave you with the many unique attributes that make us strong, I will close with the candor to tell you where we must be stronger.

 

SAP is the only truly global business software company. We serve 425,000 customers and counting, worldwide. There is no finish line when it comes to meeting the needs of our growing customer base.

 

Customers expect SAP to lead more aggressively in the responsible use of artificial intelligence. Even as we embed these algorithms into our applications, we must answer the question of how these use cases will impact the human workforce. We must help leaders in all sectors find the proper balance between human judgement and machine speed, including a comprehensive strategy for worker retraining to address a growing digital skills gap.

 

Customers expect SAP to be a role model when it comes to compliant business practices and integrity. We on the Executive Board share this belief. Unfortunately, we, like many other companies, have experienced the challenges of non-compliance. Moving forward, even as SAP expands our own internal focus, we strive to help others understand the risks and warning signs. When businesses do not act in accordance with the highest ethical standards, the resulting decline in public trust is harmful for all sides. Therefore, we call for other interested groups to come together to support these values.

 

Finally, customers expect SAP to do more than celebrate a purposeful vision for our company. They want our solutions to help them be responsible, sustainable best-run businesses. They want our solutions to help them remove bias from the workplace, eliminate unfair labor practices, reduce carbon emissions, and educate a new generation of inspired workers. Underpinning what we do is our support of the UN Sustainable Development Goals, which will help us achieve our purpose and have a positive impact on the world.

 

You should always expect that SAP’s pride in engineering will continue to propel our products to improve. In all areas where we compete, we will not rest until SAP is #1 or fastest growing.

 

But beyond our ambitions for profitable growth, you should always expect us to be a humble and hungry company – ever proud about what makes us strong and ever vigilant to confront our challenges.

 

With your continued trust, not only will we seize the opportunities of the experience economy but we will also do so in a manner befitting the class and character of those who came before us.

 

I thank you, especially, for standing behind us on this journey.

 

Very truly yours,

 

Bill McDermott
Chief Executive Officer
SAP SE


 

 

Letter from the CEO

 

9

 


 

To Our
Stakeholders

Combined
Management Report

Consolidated Financial
Statements IFRS

Further Information on Economic,
Environmental, and Social Performance

Additional
Infomation

 

 

 

 

SAP Executive Board

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Bill McDermott

 Chief Executive Officer

 

 Robert Enslin

 President, Cloud Business Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 Adaire Fox-Martin

 Global Customer Operations EMEA, MEE and Greater China

 

 Christian Klein

 Chief Operating Officer, Intelligent Enterprise Group

 

 

10

 

SAP Executive Board

 


 

To Our
Stakeholders

Combined
Management Report

Consolidated Financial
Statements IFRS

Further Information on Economic,
Environmental, and Social Performance

Additional
Infomation

 

 

 

 

 

 

 

 

 Michael Kleinemeier

 SAP Digital Business Services

 

 Bernd Leukert

 SAP Digital Business Services (until February 2019)

 Products & Innovation (until end of 2018)

 

 

 

 

 

 

 

 

 

 

 Luka Mucic

 Chief Financial Officer

 

 Jürgen Müller

 Chief Technology Officer / Technology & Innovation

 (as of January 2019)

 

 

 

 

 

 

 

 

 

 

 Jennifer Morgan

 Global Customer Operations Americas and Asia Pacific Japan

 

 Stefan Ries

 Chief Human Resources Officer

 

 

SAP Executive Board

 

11

 


 

To Our
Stakeholders

Combined
Management Report

Consolidated Financial
Statements IFRS

Further Information on Economic,
Environmental, and Social Performance

Additional
Infomation

 

 

 

 

Investor Relations

 


SAP Is the Most Valuable DAX Company, Despite Declining Stock Markets

 

Clouded competitive prospects and political uncertainties left their mark on global stock markets in 2018. This was driven, among other things, by the trade conflict between the United States and China, the U.S. Federal Reserve’s monetary policy, the tug-of-war in the Brexit negotiations, and the budget dispute between Italy and the European Union (EU). Though unable to escape these developments, SAP stock finished the year significantly higher than the benchmark indices: it declined 7.0%, whereas the DAX 30 and EURO STOXX 50 indexes lost as much as 18.3% and 14.8%, respectively. In terms of market capitalization, SAP is the most valuable DAX company.

 

SAP Stock Reaches New All-Time High

 

Having started the year at 93.45, the Xetra closing price on December 31, 2017, SAP stock initially experienced a short pull-back but then proceeded to develop largely in line with market developments. Considerable turbulence caused by recurring interest rate fears and an ever-stronger euro, however, dominated the markets, and SAP’s excellent financial results for fiscal year 2017 were not able to stop this trend. SAP’s announcement of a higher dividend at the end of February, at least, managed to spark a slight recovery before the United States’ confrontation course with international trading partners at the beginning of March put renewed pressure on the stock markets. On March 2, SAP stock touched its lowest point of the year at 82.47. The trade dispute repeatedly impacted the stock markets as the year progressed.

 

The markets were initially able to free themselves from this negative influence in April, and remained buoyant through to mid-June. Boosted additionally by strong first-quarter 2018 results and

 

a weakening euro, SAP stock rallied even higher, gaining a clear lead over the rising market as a whole. By May 17, the date of the Annual General Meeting of Shareholders, the SAP share price had risen to 96.95. Shareholders subsequently approved a 12% higher dividend of 1.40 per share at this Meeting, lifting SAP stock to an interim high of 104.30 on June 14. A renewed flare-up of the trade dispute, however, put an end to this rise in the short term, with the turbulent political and monetary policy environment causing increasing volatility on the stock markets.

 

Not even the publication of our favorable second-quarter results on July 19 could stimulate SAP stock in this climate. Increasing demand for technology shares in August, however, ultimately pushed SAP stock to a new all-time high of 108.02 on September 27, before presentation of the Italian government’s debt budget ushered in the markets’ transition to a bear market in the fourth quarter.

 

In the wake of the many uncertainties mentioned above, coupled with the increasing number of profit warnings including from some large DAX enterprises, the stock markets experienced broad-scale losses in a continuous downward trend that lasted until the end of the year. Share prices were hit particularly hard in December following the arrest of Huawei’s chief financial officer in Canada and the Federal Reserve’s decision to raise interest rates again. SAP was not immune: despite our renewed forecast increases, the publication of SAP’s third-quarter results on October 18 failed to impress the markets, and SAP stock declined 5.9% that same day. On November 11, SAP announced its acquisition of Qualtrics International Inc., yet investors initially felt the acquisition was too expensive, prompting a 5.6% drop in the SAP share price the following day. SAP stock closed the year on December 28 at 86.93, down 7.0% for 2018 overall.


 

SAP Stock in Comparison to Major Indicies December 29, 2017 to December 28, 2018

 

 

 

12

 

Investor Relations

 


 

To Our
Stakeholders

Combined
Management Report

Consolidated Financial
Statements IFRS

Further Information on Economic,
Environmental, and Social Performance

Additional
Infomation

 

 

 

 


Continued Dialog with Investors

 

We are continuously engaged with the investment community through a number of channels. Over the course of the year, senior management at SAP and the Investor Relations (IR) team discussed our strategy and business development with institutional investors and analysts worldwide.

 

Once again, a highlight of our global IR program in 2018 was the Capital Markets Day held at our Hudson Yards office in New York City. This engaging event was attended by more than 90 financial analysts and investors, the SAP Executive Board discussed the details of SAP’s strong market position and how SAP innovations support customers’ digitization. The Executive Board also discussed the business model and future outlook of the company. SAP customers Whirlpool, Pregis, and DoTerra presented their perspective on how SAP software supports their business. In addition, we hosted events for buy-side analysts in Walldorf, New York, and San Francisco. Further, we hosted events for investors and financial analysts at the CeBIT fair in Hanover, Germany and at the SAPPHIRE NOW conference in Orlando, Florida. Members of the Investor Relations team as well as senior management participated in more than 25 conferences worldwide. We continued our regular dialog with socially responsible investors (SRI), providing them with insights into our environmental, social, and corporate governance policies. SAP representatives engaged with retail shareholders at multiple events. The Investor Relations team and the Treasury teams also maintained regular communication with the debt investor community.

 

Investors can access a wide range of information about SAP and its shares online. Our channels of communication include our Twitter feed @sapinvestor and the quarterly SAP INVESTOR magazine. Shareholders can reach the IR team directly through a telephone hotline and through an e-mail at investor@sap.com. We also publish an overview of the latest analyst consensus in collaboration with Vara Research.

 

We webcast all key investor events at which members of our Executive Board speak, and we post all relevant presentations on the Investor Relations Web site.

 

Key Facts About SAP Stock/SAP ADRs

Listings

 

 

Germany

 

Berlin, Frankfurt, Stuttgart

United States (ADRs)

 

New York Stock Exchange

IDs and symbols

 

 

WKN/ISIN

 

716460/DE0007164600

NYSE (ADRs)

 

803054204 (CUSIP)

Reuters

 

SAPG.F or .DE

Bloomberg

 

SAP GR

Weight (%) in indexes at 12/31/2018

 

 

DAX 30

 

10.13

Prime All Share

 

7.55

CDAX

 

8.52

HDAX

 

8.07

Dow Jones STOXX 50

 

2.83

Dow Jones EURO STOXX 50

 

4.36

 

Return on SAP Common Stock —
WKN 716460/ISIN DE007164600

 

 

Percent, unless otherwise stated

 

 

 

 

 

 

Initial investment €10,000

 

 

 

 

 

 

 

 

Date of investment

 

 

12/31/2008

 

12/31/2013

 

12/31/2017

Period of investment

 

10 years

 

5 years

 

1 year

 

Value at 12/31/20181) (in €)

 

 

34,441

 

13,951

 

9,302

 

Average annual return

 

 

13.2

 

6.9

 

–7.0

 

Performance comparators

 

 

 

 

 

 

 

 

DAX 30 Performance — total return index

 

 

8.2

 

2.0

 

–18.3

 

REX General Bond — total return index

 

 

1.5

 

1.4

 

0.9

 

S&P 500 Composite — total return index

 

 

13.0

 

10.3

 

–1.7

 

S&P North American Technology Software Index

 

 

20.2

 

18.2

 

6.8

1) Assuming all dividends were reinvested

 

 

 

 

 

 

 

 

 

Source: Bloomberg / Deutsche Bank

 

 

 

Return on SAP ADRs — 803054204 (CUSIP)

Percent, unless otherwise stated

 

 

 

Initial investment US$10,000

 

 

 

Date of investment

12/31/2008

12/31/2013

12/31/2017

Period of investment

10 years

5 years

1 year

Value at 12/31/20181) (in US$)

27,485

11,424

8,860

Average annual return

10.6

2.7

–11.4

Performance comparators

 

 

 

S&P 500 Composite total return index

10.7

6.3

–6.2

1) Assuming all dividends were reinvested

 

Source: Datastream / Deutsche Bank

 

 

 

Dividend Increased to €1.50

 

We had a very successful year in 2018, as customers continue to turn to SAP to support them to become intelligent enterprises. We believe our shareholders should share greatly in this success, therefore it is our policy to pay a dividend totaling 40% or more of IFRS profit after tax.

 

At the Annual General Meeting of Shareholders, the Executive Board and the Supervisory Board will recommend increasing the total dividend for fiscal year 2018 by more than 7% to 1.50 per share (2017: 1.40). This represents a payout ratio of 43.8% (2017: 41.3%).


 

Investor Relations

 

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Capital Stock Unchanged

 

SAP’s capital stock as of December 31, 2018, was 1,228,504,232 (2017: 1,228,504,232). It is issued as 1,228,504,232 no-par shares, each with an attribute value of 1 in relation to capital stock.

 

Shareholder Structure

 

Applying the definition accepted on the Frankfurt Stock Exchange, which excludes treasury stock from the free float, as of December 31, 2018, the free float stood at 85.5% (December 31, 2017: 85.2%).

 

Shareholder Structure

 

 

 

*12% of institutional investors (marked yellow) are classified as socially responsible investors (SRIs)


 

 

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Corporate Governance Report

 

 

 


We are a global company with an international shareholder base, so we need sound governance. Good corporate governance means managing the Company accountably and transparently to secure long-term value. We believe our shareholders, business partners, employees, and the financial markets reward good corporate governance with the increased trust they place in our Company.

 

Corporate Governance Principles at SAP

 

SAP is an international firm with European roots, having the legal form of a European company (Societas Europaea, or SE). Being an SE headquartered in Germany, we are now subject to European and German law for SEs while remaining subject to German stock corporation law. Major characteristics of our governance structure remain in place since the conversion, notably our two-tier board comprising a Supervisory Board and an Executive Board, and parity for workforce representatives on the Supervisory Board. Because SAP SE is listed on a German stock exchange, our corporate governance is still based on the German Corporate Governance Code (the “Code” in this report).

 

Since SAP is also listed in the United States, we comply with the rules that apply to non-U.S. companies listed on the New York Stock Exchange (NYSE). These include the requirements, as they apply to foreign private issuers, of the NYSE Corporate Governance Standards, the U.S. Sarbanes-Oxley Act of 2002, and the U.S. Securities and Exchange Commission (SEC).

 

Section 161 Declaration

 

Every year, as required by the German Stock Corporation Act, Section 161, the Executive Board and Supervisory Board issue a Section 161 Declaration stating whether SAP has implemented and is following the Code’s recommendations, and identifying any recommendations that the Company has not followed – with a full explanation of why it has not done so. Our latest Section 161 Declaration, published in October 2018, is on the SAP Web site along with our declarations from previous years and links to the current and previous editions of the Code. As our latest declaration shows, we have followed since February 21, 2018, all of the 115 recommendations and all of the suggestions in the current Code (while we followed all but two of the recommendations of the Code from the issuance of our Section 161 Declaration on October 27, 2017, through the update issued on February 21, 2018).

 

Corporate Governance Statement

 

On February 19, 2019, the Executive Board published a Corporate Governance Statement for 2018 pursuant to Sections 315d and 289f of the German Commercial Code. The statement is on the SAP Web site. It comprises the current declaration pursuant to the German Stock Corporation Act, Section 161, certain details of our corporate governance practices, and an account of how the Executive Board and the Supervisory Board work, who serves on which Supervisory Board committees, and how those committees work. It also sets out the targets for the percentage of women on

the Executive Board and the two management levels below Executive Board level, as well as information on the implementation of the minimum quota of men and women on the Supervisory Board, and details about the Diversity Policy of SAP SE.

 

Executive Board

 

The Executive Board currently has ten members. It is solely responsible for managing the Company. It has a duty to exercise its management powers in the interest of the Company and in pursuit of the sustained growth of corporate value. It discusses and agrees its strategy for the Company with the Supervisory Board, ensures compliance with the requirements of the law throughout the Group, and maintains effective risk management structures and internal risk controls. The members of the Executive Board are appointed by the Supervisory Board which set a regular age limit of 65 years for the Executive Board. Information about each Executive Board member’s portfolio of responsibilities is available on the SAP Web site.

 

Supervisory Board

 

The size and composition of the Supervisory Board are governed not by the German Codetermination Act (which does not apply, because we are a European company) but by the Articles of Incorporation and the SAP SE Employee Involvement Agreement. Both documents are available on the SAP Web site.

The Supervisory Board has 18 members who, in equal numbers, represent the shareholders and the employees. It appoints, monitors, and advises the Executive Board. The Executive Board involves the Supervisory Board in decisions on matters of fundamental importance for the Company. The Supervisory Board has reserved to itself the approval of certain transactions of fundamental importance, as set out in the Articles of Incorporation and detailed in the Supervisory Board’s list of reserved categories of transactions. The Executive Board regularly provides the Supervisory Board with full and timely reports on all material matters of strategy, business planning, and performance, including any deviations of actual business performance from plan, risks, risk management, and corporate compliance. We provide our shareholders with in-depth information about how the Executive Board and the Supervisory Board work, how the committees are composed, and how these committees work, in our corporate governance statement. For more information about the joint work of the Executive Board and the Supervisory Board and about the work of the Supervisory Board and its committees in 2018, see the Report by the Supervisory Board.

 

Composition of the Supervisory Board

 

The Supervisory Board members as a group possess the knowledge, ability, and expert experience required to properly perform its duties in our global IT company. At least one independent member has financial reporting and auditing


 

 

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expertise. The Supervisory Board has defined the following objectives for its own composition:

 

         There should never be fewer than three persons of non-German origin on the shareholder representatives’ side of the Supervisory Board.

         No employee, consultant, or director of a significant SAP competitor should be a Supervisory Board member.

         At least five shareholder representatives on the Supervisory Board, and at least ten members of the entire Supervisory Board, should be independent members in the meaning of Section 5.4.2 of the Code; the Supervisory Board considers these numbers as appropriate.

         No member of the Supervisory Board should be older than 75 years.

         Length of service on the Supervisory Board generally shall not exceed a period of 12 years. For a transition period, the Supervisory Board may, notably to retain valuable experience of SAP Supervisory Board work, propose from the nine shareholder representatives up to three candidates who exceed this regular limit to the Supervisory Board members’ term of office. After financial year 2023, the regular limit may only be exceeded in justified individual cases. The eligibility of employee representatives remains unaffected.

 

In addition to these objectives, the Supervisory Board adopted a Profile of Skills and Expertise for the Supervisory Board which comprises general personal requirements applicable to each Supervisory Board member, as well as company-specific and professional requirements which must be fulfilled by the Supervisory Board as a whole. This means that the company-specific and professional requirements stated in the Profile of Skills and Expertise do not have to be met by each member of the Supervisory Board individually, but that it is sufficient if the knowledge, skills, and professional experience contributed by each of the Supervisory Board members combine to cover the totality of the company-specific and professional requirements stated in the Profile of Skills and Expertise. Proposals by the Supervisory Board to the General Meeting of Shareholders for the election of shareholders’ representatives to the Supervisory Board shall aim at fulfilling the Profile of Skills and Expertise. The Profile of Skills and Expertise for the Supervisory Board is available on the SAP Web site.

 

The Supervisory Board believes that the current composition of the Supervisory Board fulfills all of these objectives and the requirements contained in the Profile of Skills and Expertise. There is information about each member, the committees, and who serves on which committee, on the SAP Web site.

 

Independence of the Supervisory Board

 

SAP believes that a sufficient degree of independence of its Supervisory Board members is essential for effective and responsible corporate management and control. The Supervisory Board has a defined objective for its composition regarding the minimum number of independent members on the shareholder representative side, as recommended in the Code, Section 5.4.1, paragraph 2. The objective is five such members. At its meeting on October 25, 2018, the Supervisory Board determined that all of its shareholder representative members (that is, Hasso Plattner, Pekka Ala-Pietilä, Aicha Evans, Anja Feldmann, Diane Greene, Gesche Joost, Bernard Liautaud, Friederike Rotsch and Erhard

Schipporeit) are independent in the meaning of the Code, Section 5.4.2, based on the assumption that the duration of membership in the Supervisory Board does not per se exclude the relevant member from being considered as independent.

 

Furthermore, the Supervisory Board determined that, including the employee representatives and taking into account the shareholder structure of SAP SE, it has an appropriate number of independent members in the meaning of the Code, Section 5.4.2. This was based on the assumption that the employee representatives’ capacity as employees does not per se raise any concerns as to their independence in the meaning of the Code, Section 5.4.2.

 

The Audit Committee is chaired by Erhard Schipporeit, who for many years was the chief financial officer of a DAX company that is also listed on a U.S. stock exchange and therefore qualifies as an independent financial expert in the meaning of the Code, Section 5.3.2, and the German Stock Corporation Act, Section 100 (5).

 

Diversity in the Company

 

The Supervisory Board of SAP SE, which currently includes six women, meets the mandatory gender quota of 30%. For information on fulfillment of the gender quota obligation in financial year 2018, please see the Corporate Governance Statement. The Supervisory Board also aims for diversity with regard to the composition of the Executive Board, which currently has two female members.

 

The Supervisory Board adopted a Diversity Policy for the Executive Board and the Supervisory Board which meets the requirements of Section 289f para. (2) no. 6 of the German Commercial Code. The Diversity Policy as well as information on the targets for the numbers of women on the Executive Board and the first two management levels below the Executive Board are described in the Corporate Governance Statement which is available on the SAP SE Web site.

 

Generally, the Executive Board follows the recommendation in the Code that executive boards should have regard to diversity when appointing people to leadership positions, and in particular, aim to employ appropriate numbers of women in such positions. In support of this, the Executive Board maintains a policy to enhance diversity in company leadership appointments. This policy comprises a number of elements to increase the percentage of women in management and, in the long term, establish a diverse pool of female and male candidates for senior management positions.

 

In addition, SAP set itself a voluntary target of increasing the percentage of positions in leadership on a global level held by women to 27% by the end of 2019 and to 28% by the end of 2020. That percentage stood at 25.7% globally at the end of 2018. It goes without saying that ability is still the primary selection criterion for any position at SAP.

 

Code of Business Conduct

 

SAP’s corporate governance includes our Code of Business Conduct for employees and members of the Executive Board. The Code of Business Conduct expresses the high standards that we require from our employees and Executive Board members and sets out the main principles that guide our business conduct toward customers, business partners, and shareholders. We see our Code of Business Conduct as the standard for our dealings


 

 

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involving customers, business partners, vendors, shareholders, and competitors. By following our Code of Business Conduct, we demonstrate a commitment against all forms of unfair competitive practice, corruption, and misrepresentation. Our global compliance organization monitors worldwide compliance with the Code of Business Conduct and other policies applying within the Group. It regularly reviews these internal policies, revises them if necessary, and delivers related employee training.

 

Applying International Corporate Governance Standards

 

SAP is a NYSE-listed company and we are therefore subject to certain U.S. laws (including the Sarbanes-Oxley Act of 2002, among others) and to the applicable SEC and NYSE regulations. Besides implementing the requirements of the Sarbanes-Oxley Act, Section 404, and other Sarbanes-Oxley Act requirements, including conducting an annual audit of our internal control over financial reporting, we comply with the corporate governance standards of the NYSE Listed Company Manual, Section 303A, which bind foreign private issuers. The Section 303A standards that apply to SAP include the requirement to have an audit committee composed of members who are independent in the meaning of the Sarbanes-Oxley Act, and related reporting requirements. Erhard Schipporeit, the chairperson of the Audit Committee, is an audit committee financial expert in the meaning of the Sarbanes-Oxley Act.

 

Annual General Meeting of Shareholders

 

Our shareholders exercise their rights, such as the rights to put questions to the management and to vote, at the Annual General Meeting of Shareholders. Shareholders and the public are able to watch a live broadcast of the entire Annual General Meeting of Shareholders on the Internet. They can vote their shares at the Meeting or instruct a proxy of their choice or one of the proxies provided for that purpose by SAP. Alternatively, they can participate online or vote by mail. The invitation to the Annual General Meeting of Shareholders includes full details and instructions. Every shareholder can access all of the paperwork on the SAP Web site in good time for the meeting.

 

Transparency, Communication, and Service for Shareholders

 

Our shareholders can obtain full and timely information about SAP on our Web site and can access current and historical Company data. Among other information, we post all of our financial reports, all relevant news about the Company’s governing bodies and their corporate governance documentation, information requiring ad hoc (current) disclosure, press releases, and news of notifiable directors’ dealings.

 

Financial Accounting, Risk Management, and Internal Control

 

We prepare the SAP SE financial statements in accordance with the German Commercial Code and our consolidated financial statements in accordance with International Financial Reporting Standards (IFRSs). We prepare a combined management report and a separate combined non-financial report for SAP SE and the

SAP Group as required by the German Commercial Code, and the Form 20-F annual report in accordance with SEC requirements. The Executive Board is responsible for financial accounting. The Supervisory Board approves the SAP SE financial statements, the consolidated financial statements, as well as the combined management report and the separate combined non-financial report. The SAP SE financial statements, the consolidated financial statements, and the combined management report are audited by KPMG AG Wirtschaftsprüfungsgesellschaft, the auditor elected for that purpose by the Annual General Meeting of Shareholders.

 

In addition to our annual financial statements, we also prepare quarterly statements for all four quarters in accordance with the rules and regulations of the Frankfurt Stock Exchange, as well a half-year financial report on June 30 pursuant to the legal requirements of the German Securities Trading Act. Our quarterly statements and half-year financial report are submitted to the Audit Committee of the Supervisory Board before they are published.

 

In German stock corporation and commercial law, there are special requirements for internal risk management that apply to SAP. To meet them, our global risk management system supports risk planning, identification, analysis, handling, and minimization. We maintain standard documentation of all our internal control structures, especially those that affect financial reporting, and continually evaluate their effectiveness. As a company listed on the NYSE, we instruct our auditor, KPMG, to conduct an annual audit of our internal control over financial reporting in accordance with the requirements of the U.S. Sarbanes-Oxley Act of 2002, Section 404. The audit as of December 31, 2018, confirmed that our internal control is effective. In compliance with the reporting requirements in the German Commercial Code, Sections 289 (4) and 315 (4), the combined SAP SE and SAP Group management report contains full information about the principal features of the internal controls and risk management structure applying to SAP’s consolidated financial reporting.


 

 

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Report by the Supervisory Board

 

 

 


Dear Shareholders,

 

In the following, we would like to inform you about the work of the Supervisory Board in the past fiscal year.

 

Collaboration Between the Supervisory Board and the Executive Board

 

In 2018, the Supervisory Board advised the Executive Board on an ongoing basis with regard to the management of the Company and kept the Executive Board’s global management of the Company under observation and scrutiny for legal compliance, adherence to proper accounting principles, business focus, and efficiency. The Supervisory Board was always directly involved when the Executive Board made any decisions of fundamental importance to SAP.

We regularly received full and timely reports from the Executive Board, both from members in person and in written documents. This ensured that we were always kept up to date on the Company’s strategy, planning, business performance, risks, risk management, compliance (in other words, adherence to laws, to the Company’s Articles of Incorporation, and to internal policies), and on transactions of special significance for SAP. In its reports, the Executive Board also advised us in particular when business deviated from plan or target, and why. In addition, the Supervisory Board members can use the SAP Digital Boardroom solution to stay abreast of the Company’s performance whenever they wish, not just in their meetings. This digital decision and analysis cockpit is an analytical software solution that allows us to call up comprehensive metrics for all business areas in real time and generate evaluations and analyses as required. As such, SAP Digital Boardroom affords the Supervisory Board members an up-to-date view of SAP’s business processes, data, and key figures – and maximum transparency.

The content and scope of the Executive Board’s reports to us fully met our requirements for them, and the questions raised by

 

the Supervisory Board were always answered in detail. The Executive Board came to Supervisory Board meetings for discussion of the agenda items. We questioned and probed the Executive Board to satisfy ourselves that the information it gave us was plausible. All transactions requiring approval by the Supervisory Board whether by law, the Articles of Incorporation, or the Supervisory Board’s list of transactions requiring its consent were carefully examined and discussed with the Executive Board, focusing on the benefits, potential risks, and other effects of each transaction. The Supervisory Board agreed to all transactions for which its consent was sought by the Executive Board.

 

The Supervisory Board chairperson and the CEO were in continuous contact, which meant the Supervisory Board chairperson was always informed without delay of all important events that were significant for assessing SAP’s situation and progress or for the management and governance of the Company. Moreover, the chairperson of the Supervisory Board met regularly with the CEO to discuss SAP’s strategy, planning, business performance, risks, risk management, compliance, and other key topics and decisions. As such, the chairperson of the Supervisory Board was also kept fully informed between meetings of the Supervisory Board and its committees.

 

Supervisory Board Meetings and Resolutions

 

In 2018, the Supervisory Board of SAP SE held four ordinary meetings and four extraordinary meetings at which we deliberated and resolved on all matters of relevance to the Company. We also adopted six resolutions by correspondence vote. In the fiscal year, no Supervisory Board member attended only half or less of the meetings of the Supervisory Board and of the committees to which the member belonged. The following table provides an overview of the individual members’ attendance at the Supervisory Board’s plenary sessions and committee meetings in 2018:


 

Meeting Participation of SAP Supervisory Board Members During Fiscal Year 2018

 

Supervisory Board
Members

 

Meetings
(incl.
Committees)

 

 

Meetings
(Plenum)

 

Participation
(Plenum)

 

Meetings
(Committees)

 

Participation
(Committees)

 

Participation in %
(all Meetings)

Hasso Plattner

 

21

 

8

 

7

 

13

 

11

 

86%

Pekka Ala-Pietilä

 

24

 

8

 

6

 

16

 

14

 

83%

Panagiotis Bissiritsas

 

26

 

8

 

8

 

18

 

17

 

96%

Martin Duffek

 

20

 

8

 

8

 

12

 

12

 

100%

Aicha Evans

 

19

 

8

 

6

 

11

 

8

 

74%

Anja Feldmann

 

12

 

8

 

7

 

4

 

4

 

92%

Diane Greene
(Member as of May 2018)

 

6

 

5

 

3

 

1

 

1

 

67%

Wilhelm Haarmann
(Member until May 2018)

 

 

10

 

3

 

3

 

7

 

7

 

100%

 

 

18

 

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Supervisory Board
Members

 

Meetings
(incl.
Committees)

 

 

Meetings
(Plenum)

 

Participation
(Plenum)

 

Meetings
(Committees)

 

Participation
(Committees)

 

Participation in %
(all Meetings)

Andreas Hahn

 

18

 

8

 

8

 

10

 

10

 

100%

Gesche Joost

 

13

 

8

 

8

 

5

 

5

 

100%

Margret Klein-Magar

 

18

 

8

 

8

 

10

 

10

 

100%

Lars Lamade

 

15

 

8

 

8

 

7

 

7

 

100%

Bernard Liautaud

 

20

 

8

 

6

 

12

 

11

 

85%

Christine Regitz

 

13

 

8

 

8

 

5

 

5

 

100%

Friederike Rotsch
(Member as of May 2018)

 

 

12

 

5

 

5

 

7

 

7

 

100%

Erhard Schipporeit

 

22

 

8

 

7

 

14

 

14

 

95%

Robert Schuschnig-Fowler

 

16

 

8

 

8

 

8

 

8

 

100%

Sebastian Sick

 

21

 

8

 

8

 

13

 

13

 

100%

Pierre Thiollet

 

12

 

8

 

8

 

4

 

4

 

100%

Klaus Wucherer
(Member until May 2018)

 

 

6

 

3

 

3

 

3

 

2

 

83%

 

 


The Supervisory Board and its committees also convene wholly or partly without the Executive Board as necessary to deliberate on items that pertain to the Executive Board or require internal discussion among Supervisory Board members alone. In 2018, the Executive Board withdrew temporarily from six of the eight plenary sessions and from three of the five meetings of the General and Compensation Committee. In addition, the shareholder representatives and the employee representatives independently discussed individual agenda items as required prior to the adoption of resolutions in plenary sessions. The Supervisory Board addressed the following key topics during the year:

 

Intelligent Enterprise Strategy and Acquisitions

 

In the Technology and Strategy Committee meetings and in six meetings of the full Supervisory Board, the Supervisory Board continually discussed with the Executive Board the latter’s product strategy aimed at helping SAP customers evolve into “intelligent enterprises” (Intelligent Enterprise strategy). This strategy is based on the conviction that an integrated suite will enable companies and their customers to successfully seize the opportunities of the digital era by means of intelligent applications and platforms. One of the first milestones of the Intelligent Enterprise strategy in 2018 was the acquisition of Callidus Software Inc., a market leader in customer relationship management (CRM) applications. We discussed this acquisition particularly in our extraordinary Supervisory Board meeting on January 29, 2018. We examined all aspects of the acquisition, including the related opportunities and risks, in detail with the Executive Board. We firmly believe the acquisition of Callidus will represent an important addition to SAP’s new CRM offering (SAP C/4HANA), and therefore, on the recommendation of the Finance and Investment Committee, approved the acquisition and the financing thereof. In this extraordinary January meeting, we also discussed a number of critical measures to be taken in product development, as well as platform strategy, in connection with this acquisition.The

Executive Board agreed to present all planned strategy measures for realizing the integrated suite to us in detail in our February meeting. Then, on February 21, 2018, the Executive Board presented its planned concept for a new organizational structure. This structure is aimed at standardizing and simplify the organization, thus forming the operational basis for the intelligent suite, which runs on a joint platform comprising SAP Cloud Platform and SAP HANA Data Management. On April 12, 2018, we examined, as a next step, the Executive Board’s detailed plan for the product strategy and its technological implementation. We discussed with the Executive Board its road map for the further development of SAP solutions for the Intelligent Enterprise, particularly the intelligent suite and technologies in the areas of machine learning, artificial intelligence, and the Internet of Things. Experts from across SAP gave us detailed presentations in this regard. In the July 26, 2018, meeting, the Executive Board reported on the strategy’s progress. The CEO informed us that the Executive Board’s focus in the second half of the year was mainly on the continued development and marketing of the intelligent suite. We reviewed the individual priorities in this regard and asked the Executive Board to keep us up to date at all times. In our plenary session on October 25, 2018, the Executive Board announced its plans for a further key step in its strategy: the acquisition of Qualtrics International Inc., a U.S.-based market leader in Experience Management. The Supervisory Board was subsequently asked to examine and vote on the planned acquisition in an extraordinary meeting on November 11, 2018. In that meeting, the Finance and Investment Committee reported on the meeting it had held immediately beforehand to examine and discuss the acquisition. We then looked in depth at the different aspects of the acquisition, the associated opportunities and risks, and the valuation of Qualtrics. We also examined the fairness opinions of a U.S. bank and an international accounting firm on the appropriateness of the purchase price. Following consideration and


 

 

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review of all aspects, the Supervisory Board voted in favor of the acquisition of Qualtrics and the associated financing measures.

 

Expansion of the Executive Board and Reassignment of Portfolios

 

In our April meeting, we resolved to extend Stefan Ries’ appointment to the Executive Board to the end of March 2024.

 

One of our goals in 2018 was to make the Executive Board more effective for the tasks ahead and to clarify Executive Board succession planning at an early stage. We therefore introduced further changes to the Executive Board in our meeting on October 25, 2018: we appointed SAP’s Chief Innovation Officer Jürgen Müller to the Executive Board effective January 1, 2019. Since his appointment, Jürgen Müller has been responsible for the Technology & Innovation Board area, pursuant to the Executive Board’s revised portfolio concept. Simultaneously, Bernd Leukert took over the SAP Digital Business Services division effective January 1, 2019, in a co-lead capacity together with Michael Kleinemeier. We also discussed with the Executive Board a further change in portfolio assignments: Christian Klein, who had been responsible for global business processes since January 2018, would additionally be in charge of SAP S/4HANA as well as the global development and delivery of SAP’s core applications as of January 2019. The General and Compensation Committee and the Supervisory Board discussed the preparation of the Executive Board appointment contract for Jürgen Müller and the required changes to the Executive Board appointment contract of Christian Klein in the respective October meetings and subsequently approved both measures by circular correspondence vote in November 2018. We resolved each of the above resolutions on the recommendation of the General and Compensation Committee, which had extensively prepared these topics for us. We believe that by adopting these changes, the Executive Board is well positioned for the challenges ahead.

 

Other key topics addressed at our meetings in 2018 notably included the following:

 

Meeting in February (Meeting to Discuss the Financial Statements)

 

At our ordinary Supervisory Board meeting on February 21, 2018, we discussed Executive Board compensation for 2017. Exercising our discretionary powers under the terms of the short-term incentive (STI) 2017, we first determined performance against the defined target for the STI. We then decided on the total target achievement and the payouts for the individual Executive Board members under the STI 2017. We also deliberated on Executive Board compensation for 2018 at the February meeting. We defined the key performance indicators (KPIs) for the STI 2018 and set the target numbers for each KPI and their relative weightings. Prior to this, the Supervisory Board had, on recommendation of the General and Compensation Committee, resolved to remove the discretionary element from the STI 2018, which had long been a sore point among investors. In return, we resolved to increase the weighting of the individual KPIs to varying extents. This move served to further enhance the transparency of the Executive Board compensation system, which was again presented to the Annual General Meeting of Shareholders on

May 17, 2018, for approval. In addition, we resolved the individual allocation amounts for the 2018 tranche of the Long-Term Incentive (LTI) Plan 2016, and the basis of the allocation of the 2019 tranche. For more information about the LTI Plan 2016 and the other elements of the compensation package for Executive Board members, see the Compensation Report. The Supervisory Board, as required, evaluated the appropriateness of the Executive Board members’ compensation, and in each case found it to be appropriate in terms of amount, structure, objective criteria, and for each member’s responsibilities and tasks. We referred in this regard to an appropriateness certificate obtained from Ernst & Young GmbH. We then discussed the results of the 2017 employee survey and the Company’s 2017 financial results with the Executive Board. In addition, the Supervisory Board turned its attention to the SAP SE financial statements and the consolidated financial statements for 2017, the audits conducted by KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG), and the Executive Board’s proposed resolution on the appropriation of retained earnings for 2017. The auditor attended the meeting and reported in detail on the audit and its findings for each of the focus areas that had been agreed between the auditor and the Audit Committee. The auditor also related the discussions on those matters at the preceding meetings of the Audit Committee. The auditor then discussed the results of the audit with the Supervisory Board and answered our questions. The Audit Committee comprehensively prepared all topics in connection with the financial statements and the consolidated financial statements for 2017, and in particular reported on the form and scope of its examination of the documents relating to the financial statements, which it recommended we approve. The Supervisory Board approved the audit. There were no findings from our own examination, so we gave our consent to the SAP SE and consolidated financial statements for 2017. We checked and endorsed the Executive Board’s proposal to appropriate retained earnings in accordance with the Audit Committee’s recommendation. We then discussed in detail the annual budget for 2018 as presented to us by the Executive Board, and approved same. In addition, we decided on the (further) resolutions we would propose for the agenda of the May 2018 Annual General Meeting of Shareholders, particularly our recommendation to the Annual General Meeting of Shareholders concerning the auditor to elect for 2018, which followed the recommendation of the Audit Committee to us. We were also informed about SAP’s donation activities. Thereafter, we discussed corporate governance matters and the update to SAP’s annual declaration of implementation. This update was necessary because SAP’s last two deviations from the German Corporate Governance Code (the “Code”) were settled at the start of the fiscal year, meaning SAP complied with all recommendations in the Code since February 2018.

 

Meeting in April

 

In the plenary session on April 12, 2018, an analyst from Citibank gave a presentation on how analysts viewed SAP and the software market. Attendees discussed, among other things, SAP’s current valuation compared to its peers and SAP’s transformation to the cloud. We also resolved to adjust Executive Board compensation for acquisition effects from the Callidus acquisition, which had closed sooner than expected. In addition, the Executive Board gave


 

 

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us an overview of the first-quarter results for 2018 and SAP’s performance vis-à-vis its main competitors.

 

Extraordinary Meeting in May

 

The Supervisory Board held an extraordinary meeting immediately following the Annual General Meeting of Shareholders on May 17, 2018, to welcome the newly elected members and to decide membership on its committees.

 

Meeting in July

 

When the Supervisory Board met on July 26, 2018, we deliberated on the future terms and structure of Executive Board compensation. In addition, we looked at the investment activities of the SAP-financed venture capital funds, Sapphire Ventures. On recommendation from the Finance and Investment Committee, we approved the financing of two new Sapphire Ventures funds in the total amount of US$1.3 billion. Next, we discussed and approved the directors’ and officers’ (D&O) group liability insurance policies that we take out from year to year which, besides the statutory deductible, notably included an increase in the insurance coverage. We also reviewed and updated the list of transactions and business management measures for which the Executive Board must obtain the Supervisory Board’s consent. The Executive Board then gave us an account of business in the second quarter of 2018 and performance in the first half-year. Referring to the Executive Board’s reports, we discussed with the Executive Board our conclusions from the figures and the resulting measures.

 

Meeting in October

 

At our meeting in October, the Executive Board reported on business performance in the third quarter. In addition, we discussed the appointment of new members to the committees as of January 2019, and, in agreement with the Executive Board, adopted for regular publication in October 2018 the annual declaration of implementation of the Code, which states that SAP has been following all Code recommendations since February 2018. The Supervisory Board also assessed the independence of its members at regular intervals pursuant to Code specifications, using benchmarks we had set at our own discretion. We ascertained that the Supervisory Board has a sufficient number of independent members and, in accordance with the Code provisions, identified those shareholder representatives whom the Supervisory Board deems independent; these representatives are named in the Corporate Governance Report. In 2018, we also reviewed the efficiency of the work of the full Supervisory Board and its committees, as is regularly required pursuant to the recommendations of the Code: In this regard, we first sent an electronic survey to all the Supervisory Board members ahead of the meeting with questions addressing all aspects of our work. After evaluating the questionnaire, we discussed the survey responses and comments in the plenum, taking some of these as an opportunity to talk about improvements to Supervisory Board processes and meeting topics. Ultimately, we came to the conclusion that, on the whole, our work was efficient. Also in the October meeting, the Executive Board explained its strategy for the Cloud ERP and SAP Digital Business Services areas, reported on progress on the process side including cloud infrastructure, and updated us on matters related to cybersecurity and the mechanisms established by SAP in this area.

The Work of the Supervisory Board Committees

 

The committees made a key contribution to the work of the Supervisory Board in 2018 and reported on their work to us, including their preparatory work for and decisions made on the relevant agenda items of the subsequent Supervisory Board meetings. In connection with the retirement of Wilhelm Haarmann and Klaus Wucherer from the Supervisory Board at the conclusion of the Annual General Meeting of Shareholders, and the election of Aicha Evans, Diane Greene, and Friederike Rotsch to the Supervisory Board by the Annual General Meeting of Shareholders on May 17, 2018, we resolved a number of changes to the composition of the committees that same day. The following committees were in place in 2018, composed as follows:

 

         General and Compensation Committee: Hasso Plattner (chairperson), Pekka Ala-Pietilä (from May 17, 2018), Aicha Evans, Wilhelm Haarmann (until May 17, 2018), Andreas Hahn, Margret Klein-Magar, Lars Lamade, Bernard Liautaud, Sebastian Sick

 

         Audit Committee: Erhard Schipporeit (chairperson), Panagiotis Bissiritsas, Martin Duffek, Friederike Rotsch (from May 17, 2018), Klaus Wucherer (until May 17, 2018)

 

         Finance and Investment Committee: Wilhelm Haarmann (chairperson) (until May 17, 2018), Pekka Ala-Pietilä, Panagiotis Bissiritsas, Friederike Rotsch (from May 17, 2018), Erhard Schipporeit (until May 17, 2018), Robert Schuschnig-Fowler, Sebastian Sick

 

         Technology and Strategy Committee: Hasso Plattner (chairperson), Christine Regitz (deputy chairperson), Pekka Ala-Pietilä, Panagiotis Bissiritsas, Martin Duffek, Aicha Evans, Anja Feldmann (until September 30, 2018), Diane Greene (from October 1, 2018), Andreas Hahn, Gesche Joost, Margret Klein-Magar, Bernard Liautaud, Pierre Thiollet

 

         People and Organization Committee: Hasso Plattner (chairperson), Martin Duffek, Aicha Evans (from May 17, 2018), Anja Feldmann, Wilhelm Haarmann (until May 17, 2018), Gesche Joost, Lars Lamade, Christine Regitz, Robert Schuschnig-Fowler

 

         Nomination Committee: Hasso Plattner (chairperson), Pekka Ala-Pietilä, Bernard Liautaud

 

         Special Committee: Hasso Plattner (chairperson), Pekka Ala-Pietilä, Wilhelm Haarmann (until May 17, 2018), Lars Lamade, Friederike Rotsch (from May 17, 2018), Erhard Schipporeit, Sebastian Sick

 

Each of the committees was active in 2018 except the Special Committee. For more information about the Supervisory Board committees and their duties, see SAP’s corporate governance statement pursuant to the German Commercial Code, sections 315d and 289f, published on the SAP public Web site at www.sap.com/investor.

 

In 2018, the committees primarily focused on the following topics:

 

         The General and Compensation Committee held six regular meetings and one extraordinary meeting in 2018; outside these meetings it passed two resolutions by correspondence. In particular, the Committee extensively prepared and discussed


 

 

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in advance the deliberations of the Supervisory Board and its resolutions on Executive Board compensation and on the human resources (HR) decisions described above. The Committee members addressed compensation matters especially in the January and February meetings. The Committee also dealt with general questions concerning Executive Board compensation in its July meeting and, in its regular October meeting, discussed the expected changes to the recommendations on Executive Board compensation in connection with the forthcoming revision of the Code. In its meeting on April 11, 2018, the Committee prepared the Supervisory Board’s resolution to extend Stefan Ries’ appointment to the Executive Board to the end of March 2024. When it met in July, the Committee explored general questions regarding the term of Executive Board appointments and the succession planning concept for the Executive Board. The Supervisory Board’s decisions with respect to the submission of the declaration of implementation of the Code and ascertaining the independence of Supervisory Board members were prepared in October. In addition, the Committee undertook to follow up on the suggestions for improvement derived from the efficiency review of the Supervisory Board’s work. In the fiscal year ended, the Committee also approved the acceptance of two outside supervisory board seats by an Executive Board member.

 

         The Audit Committee held six physical meetings – two of which jointly with the Finance and Investment Committee – and five telephone conference meetings in 2018. At these meetings, the Committee deliberated on the course of business over the quarter concerned, the accounting processes, the preparation of quarterly financial reports, and the quarterly reports to be published. Other regular meeting topics included SAP’s risk management system, internal control system, and compliance system. The Committee dealt with current compliance issues at numerous meetings in the reporting year. Together with members of SAP’s compliance department, it discussed the existing compliance cases, the status of the respective internal SAP investigations, SAP’s case-related collaboration with authorities, and measures to further strengthen SAP’s compliance system. During its physical meeting in February, the Committee focused on the financial accounts of SAP SE and the Group for 2017, and prepared the Supervisory Board’s recommendations to the Annual General Meeting of Shareholders concerning the election of an auditor and the appropriation of retained earnings. The decision on the recommendation regarding the election of the auditor was preceded by a review of the auditor’s independence and qualifications. In addition, the internal audit department reported on the fiscal year 2017, the department’s organization and processes, and its audit plan for 2018. At mid-year, the internal audit department informed the Committee about its audit findings to date as well as its plans for the second half of 2018 and the first half of 2019. When the Committee met in April, it reviewed SAP’s data protection measures and came to the conclusion that the global initiative for implementing the General Data Protection Regulation (GDPR), which came into force in May 2018, was making good progress. Increasing cybersecurity threats in our business environment worldwide have made the IT security environment much more complex.

Therefore, the Committee turned its attention in the second half of the year to the resulting changes to its risk assessment for this area, and had SAP’s IT security officer apprise it of additional security measures. In the second half of 2018, the Executive Board also informed the Committee about planned structural changes to the consolidated financial statements, about the pending audit of the consolidated financial statements and the combined management report by the German Financial Reporting Enforcement Panel (Deutsche Prüfstelle für Rechnungslegung), and about SAP’s measures in response to the U.S. tax reform. The auditor attended all physical meetings and telephone conference meetings of the Audit Committee and reported in depth on its audit work and on its quarterly reviews of selected software agreements. The Committee discussed the audit focus with the auditor in July, and the audit fees with the auditor in October. As reported in more detail below, the Committee also held two joint meetings with the Finance and Investment Committee in February and December to discuss the Group annual plan for 2018 and the preliminary budget for 2019.

 

         The Finance and Investment Committee held five ordinary meetings and two extraordinary physical meetings in 2018. Two of its ordinary meetings were joint meetings with the Audit Committee. The focus of the Committee’s extraordinary meeting in January was the acquisition of Callidus Software Inc., which, after extensively examining all acquisition-related aspects, it recommended the Supervisory Board approve. When the Committee met in February, it concerned itself with SAP’s participation in a joint venture to develop software for the energy industry, received an overview of the Company’s results and growth in 2018, and was updated on SAP’s January 2018 acquisition of Recast.AI, a French startup. This company developed a platform for text-based dialog systems that enables users to chat with technical systems (“chatbots”). In addition, representatives from Sapphire Ventures presented detailed information about the European and U.S. market for venture capital in technology and a status report on the four active SAP venture capital funds. In the joint meeting with the Audit Committee that followed, Committee members discussed the annual plan for 2018 and voted in favor of recommending its approval to the Supervisory Board. In April, the Executive Board gave the Committee an overview of various investor relations activities. In July, the Committee was informed about the Company’s acquisition of Coresystems FSM AG, the developer of a leading platform for field service management. The Committee also recommended that the Supervisory Board approve the financing of two new Sapphire Ventures funds in the total amount of US$1.3 billion as had been presented beforehand. At its extraordinary meeting in November, held immediately prior to the Supervisory Board’s plenary session, the Committee examined the planned acquisition of U.S.-based Qualtrics International Inc. The focus of the joint meeting with the Audit Committee in December was the presentation of, and discussion on, the preliminary Group annual plan for 2019. This meeting was held in preparation for the Supervisory Board meeting in February 2019, at which the full Supervisory Board resolved to approve the 2019 Group annual plan.

 

         The Technology and Strategy Committee met four times in 2018. It discussed key technology trends in the software


 

 

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industry in the years to come and SAP’s corporate and product strategies. In February, the Executive Board informed the Committee about SAP Data Hub, a cloud solution that automates and coordinates data flows in complex landscapes, and about the Company’s CRM strategy. When it met in April, the Committee was updated by the Executive Board on the SAP Cloud Platform strategy as well as on SAP’s strategy with respect to blockchain technology. In July, the Committee and the Executive Board discussed the intelligent suite and how this flexible, integrated solution with additional functions for machine learning capabilities can best support customers in their business processes. At the October meeting, the Executive Board apprised the Committee of current developments in SAP S/4HANA Cloud and SAP C/4HANA.

 

         The People and Organization Committee held one meeting in 2018. This meeting took place in December 2018, with key topics being China as a growth market, the current challenges there, the talent situation inside and outside SAP, and the various business areas in China. In addition, the Committee inquired about SAP’s talent acquisition system, focusing particularly on SAP’s data-driven recruiting processes.

 

         The Nomination Committee is composed exclusively of shareholder representatives. It met three times in 2018, but members discussed succession planning for the Executive Board outside of these meetings as well. Looking ahead to the 2018 Annual General Meeting of Shareholders, the Committee met in January to deliberate on suitable successors for Wilhelm Haarmann, Klaus Wucherer, and Anja Feldmann, who had all announced their intention to retire from the Supervisory Board. Following personal interviews with potential candidates, the Committee members identified three suitable successors: Friederike Rotsch, Diane Greene, and Gerhard Oswald. Friederike Rotsch has a proven track record as a legal and corporate governance expert. Diane Greene is an outstanding IT expert from the United States whose many years of experience in the cloud domain will greatly benefit the Supervisory Board’s deliberations in this key field for SAP. As a former member of the Executive Board, Gerhard Oswald knows SAP, its business, and its customers like no other, and as such can contribute significantly to the Supervisory Board’s work going forward. The Committee held two further meetings in October and December to deliberate on the subject of succession planning for the Executive Board, and in particular, to find a candidate for the vital position of financial expert on the Supervisory Board, since Erhard Schipporeit would not be standing for reelection in the regular Supervisory Board elections in 2019. The Committee members are convinced that Gunnar Wiedenfels is a worthy and suitable candidate. As the former chief financial officer (CFO) of a then DAX-listed company, and as current CFO of a company that is listed on a U.S. stock exchange, he fulfills all of SAP’s requirements for the position and thus for being proposed – upon approval by the Supervisory Board – for election at the Annual General Meeting in 2019. In the Nomination Committee’s opinion, all the selected candidates are perfect fits for augmenting expertise and diversity on the Supervisory Board.

 

Regular reports from the committees ensured that the Supervisory Board was kept fully informed of all matters covered by the committees and were able to discuss them thoroughly.

Corporate Governance

 

SAP’s corporate governance and insider trading compliance officer monitored our compliance with those recommendations in the Code with which we claim to comply in SAP SE’s declaration, and reported in full to the General and Compensation Committee. For more information about compliance with the Code, see the Corporate Governance Report from the Executive Board and Supervisory Board. Members of the Executive Board and of the Supervisory Board had no conflicts of interest that were required to be disclosed to the Supervisory Board pursuant to sections 4.3.3 and 5.5.2 of the Code. Some Supervisory Board members currently have business dealings with SAP or hold senior positions or material equity in companies that currently have business dealings with SAP, or had done so in the course of the year. SAP’s business dealings with these persons or companies are at arm’s length. In the Supervisory Board’s view, especially given the limited scope and materiality of those dealings, they did not affect the independence of the Supervisory Board members concerned and do not give rise to any substantial and not merely temporary conflict of interest in the meaning of the Code. In its April meeting, the Supervisory Board confirmed the instruction of a law firm, in which a Supervisory Board member was a partner at the time, for legal and tax advice in connection with two court proceedings against the (German) tax authorities. Confirmation of the original engagement approved by the Supervisory Board in 2012 was necessary because the member had left the law firm to which it related to become partner in another firm, where the engagement was to continue. The member concerned did not take part in the deliberations or voting on the matter. There were a number of transactions involving members of the Executive Board in 2017 that were all consistent with industry standards and immaterial. These transactions were approved by the General and Compensation Committee during the year under review. The Company made no other contracts with members of the Executive Board or Supervisory Board that would have required a resolution of the Supervisory Board.

 

The Supervisory Board closely examined the Executive Board’s corporate governance statement. We approved the statement with the combined SAP SE and SAP Group management report.

 

SAP SE and Consolidated Financial Reports for 2018

 

KPMG audited the SAP SE and consolidated financial reports for 2018. The Annual General Meeting of Shareholders elected KPMG as the SAP SE and SAP Group auditor on May 17, 2018. The Supervisory Board proposed the appointment of KPMG on the recommendation of the Audit Committee. Before proposing KPMG to the Annual General Meeting of Shareholders as auditor for the year, the chairperson of the Supervisory Board and the Audit Committee obtained confirmation from KPMG that circumstances did not exist that might prejudice or raise any doubt concerning its independence as the Company’s auditor. In that connection, KPMG informed us of the volume of the services that were not part of the audit which it had either provided to the Group in the past year or was engaged to provide in the year to come. The Supervisory Board has agreed with KPMG that the auditor should report to the Supervisory Board and record in the auditor’s report any fact found during the audit that is inconsistent with the declaration given by


 

 

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the Executive Board and the Supervisory Board concerning implementation of the Code. KPMG examined the SAP SE financial statements prepared in accordance with the German Commercial Code, the consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRSs) as required by the German Commercial Code, section 315e, and the combined SAP Group and SAP SE management report prepared in accordance with the German Commercial Code, and certified them without qualification. The auditor thus confirmed that, in its opinion and based on its audit in accordance with the applicable accounting principles, the SAP SE and consolidated financial statements give a true and fair view of the net assets, financial position, and results of operations of SAP SE and the SAP Group. The auditor also confirmed that the combined SAP SE and SAP Group management report is consistent with the corresponding financial statements and as a whole gives a suitable view of the position of SAP SE and the SAP Group and of foreseeable opportunities and risks. KPMG had completed its audit of SAP’s internal control over financial reporting and certified without qualification that it complies with the applicable U.S. standards. The auditor stated in its opinion that it considers SAP’s internal controls with respect to the consolidated financial statements to be effective in all material respects. All Audit Committee and Supervisory Board members received – initially in the form of drafts that were identical to the final documents – the documents concerning the financial statements mentioned above, the audit reports prepared by KPMG, and the Executive Board’s proposal concerning the appropriation of retained earnings in good time.

 

On February 20, 2019, the Executive Board prepared the financial accounts of SAP SE and the Group for 2018, comprising the SAP SE financial statements, the consolidated financial statements, and the combined management report, as well as the combined non-financial report and submitted them without delay to the Supervisory Board.

 

The Executive Board explained the financial statements of SAP SE and the SAP Group and its proposal concerning the appropriation of retained earnings at the meeting of the Audit Committee on February 19, 2019 (based on the drafts identical to the final documents) and at the meeting of the Supervisory Board on February 20, 2019. Members of the Executive Board answered questions from the Audit Committee and the Supervisory Board. At the Audit Committee meeting, they also explained the Annual Report on Form 20-F prepared in accordance with the applicable U.S. standards.

 

After the Executive Board had explained them, the Audit Committee and the Supervisory Board reviewed the financial statement documents along with the combined non-financial report, taking KPMG’s audit reports (or the drafts identical to the final documents) into account. The representatives of the auditor who attended presented full reports on the audit and the results of the audit to the Audit Committee and Supervisory Board meetings and explained its audit reports (or final drafts thereof). The auditor also reported that it had not identified any material weaknesses in SAP’s internal control and risk management systems for financial reporting. Both the Audit Committee and the Supervisory Board asked detailed questions about the form, scope, and results of the audit. The Audit Committee reported to the Supervisory Board on its own review of the financial statements of SAP SE and the SAP

Group, its discussions with the Executive Board and with the auditor, and its supervision of the financial reporting process. It confirmed that as part of its supervisory work, it had addressed the SAP Group’s internal control, risk management, and internal auditing systems, and found the systems to be effective.

 

The Committee also reported that KPMG had told it that no circumstances had arisen that might give cause for concern about KPMG’s impartiality, and informed us about the services KPMG had provided that were not part of the audit. The Committee reported that it had examined the auditor’s independence, taking the non-audit services it had rendered into consideration, and stated that in the Committee’s opinion the auditor possessed the required degree of independence and expertise.

 

The Audit Committee and the Supervisory Board satisfied themselves that KPMG had conducted the audit properly. In particular, they concluded that both the audit reports and the audit itself fulfilled the legal requirements. On the basis of the report and the Audit Committee’s recommendation, the Supervisory Board approved the audit and, since there were no findings from our own examination, we gave consent to the SAP SE financial statements, the consolidated financial statements, and the combined management report (including the Executive Board’s corporate governance statement pursuant to the German Commercial Code, sections 315d and 289f), as well as the combined non-financial report pursuant to the German Commercial Code, sections 315b and 289b. The financial statements and combined management report were thus formally adopted upon approval by the Supervisory Board. The Supervisory Board’s opinion of the Company and the Group coincided with that of the Executive Board as set out in the combined management report. The Supervisory Board considered the proposal presented by the Executive Board concerning the appropriation of retained earnings especially with regard to the requirements of dividends policy, the effects on the liquidity of SAP SE and the Group, and the interests of the shareholders. We also discussed these matters with the auditor. We then endorsed the Executive Board’s proposal concerning the appropriation of retained earnings, in accordance with the Audit Committee’s recommendation. Finally, we approved this present report.

 

Changes on the Supervisory and Executive Boards

 

Wilhelm Haarmann and Klaus Wucherer resigned their seats on the Supervisory Board with effect from the conclusion of the Annual General Meeting of Shareholders on May 17, 2018. Anja Feldmann stepped down from the Supervisory Board effective December 31, 2018. To that end, the Annual General Meeting of Shareholders elected Diane Greene and Friederike Rotsch to the Supervisory Board with effect from the conclusion of the Annual General Meeting of Shareholders on May 17, 2018, and Gerhard Oswald to the Supervisory Board effective January 1, 2019. Aicha Evans was likewise elected to the Supervisory Board with effect from the conclusion of the Annual General Meeting of Shareholders on May 17, 2018. She had initially been appointed a Supervisory Board member by Mannheim municipal court on June 21, 2017, as a replacement for Jim Hagemann Snabe who had resigned, but only for a term ending at the conclusion of the Annual General Meeting of Shareholders in 2018.


 

 

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Christian Klein was appointed to the Executive Board as of January 1, 2018, as Chief Operating Officer (COO). Jürgen Müller has been an Executive Board member since January 1, 2019, and is responsible for the Technology & Innovation Board area. Bernd Leukert left the Executive Board effective February 20, 2019.

 

The Supervisory Board would like to sincerely thank Bernd Leukert, Wilhelm Haarmann, Klaus Wucherer, and Anja Feldmann for their invaluable contribution to the success of the Company.

 

The Supervisory Board also thanks the Executive Board, the managing directors of the Group companies, and all SAP employees for their great commitment and dedication in 2018.

 

For the Supervisory Board

 

Professor Hasso Plattner

(Chairperson)


 

 

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Compensation Report

 

 

 


Note: This compensation report is part of the audited management report.

 

Compensation for Executive and Supervisory Board Members

 

This compensation report describes the compensation system, outlines the criteria that apply to the compensation for Executive Board and Supervisory Board members for the year 2018, and discloses the amount of compensation.

 

Compensation for Executive Board Members

 

Compensation System for 2018

 

The compensation for Executive Board members is intended to reflect the demanding role of Executive Board members leading a global company in a quickly evolving sector. The compensation level is aimed to be competitive to support SAP in the worldwide market for highly skilled executives, especially in the context of the software industry. It is our goal that our Executive Board compensation provides sustainable incentive for committed, successful work in a dynamic business environment.

 

The Supervisory Board – supported by its General and Compensation Committee – determines the compensation for each Executive Board member based on their individual role and performance in its first regular meeting of each fiscal year. For more information about the work of the Supervisory Board and its committees, see the Report by the Supervisory Board. As pictured below, the compensation contains performance-based elements and non-performance-based elements:

 

 

The amount of performance-based compensation depends primarily on SAP’s performance against predefined financial target

values (Key Performance Indicators, KPIs) and on the SAP share price, and is subject to hurdles and caps. These KPIs and their target values as well as their weighting are set by the Supervisory Board each plan year and are aligned to the SAP budget for that year.

 

The Supervisory Board sets the individual total target compensation for each Executive Board member, comprised of the fixed compensation element and the two performance-based elements. This target compensation is benchmarked based on SAP’s global strategy, market position, business performance and future prospects of economy, and the compensation paid at comparable national and international companies. The Supervisory Board also considers the compensation systems applicable for the rest of the Company, comparing Executive Board pay with the pay of SAP executives and non-executive SAP employees. The performance-based elements each correspond to a target achievement of 100% of all KPIs. The Supervisory Board reviews, assesses, and if appropriate, revises these compensation targets, in its first meeting of each fiscal year (February 21, 2018, for 2018). The Supervisory Board is of the opinion that this approach ensures that the compensation is appropriate.

 

The compensation system is designed to support the growth in value for the Company over the long term. The long-term incentive element therefore has significant weighting, making up more than two-thirds of the CEO’s compensation target, and more than 50% of each Executive Board member’s compensation target.

 

In the case of any extraordinary, unforeseeable events, the Supervisory Board is entitled, at its reasonable discretion, to adjust the performance-based compensation before payout upwards or downwards in the interest of SAP. No corrections to the payout amounts paid in May 2018 were made.

 

The individual elements of SAP’s Executive Board compensation are described in more detail below.

 

Non-Performance-Based Compensation

 

Fixed Compensation

 

The fixed compensation is paid monthly in 12 equal installments in the Executive Board member’s home currency1).

 

Fringe Benefits

 

The contractually guaranteed fringe benefits mainly comprise additional benefits such as insurance contributions, benefits in kind, expenses for maintenance of two households, use of aircraft, and tax gross-ups according to local conditions.

 

 

 

 

 

 

 

1) Home currency is the currency of the Executive Board member’s primary place of residence.


 

 

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Performance-Based Compensation

 

Short-Term Incentive

 

 

The short-term, one-year performance-based compensation (Short-Term Incentive (STI)) is determined based on a set of financial targets (KPIs).

 

For the STI 2018, the financial KPIs are: Constant currency new cloud bookings in 2018, year-over-year growth in non-IFRS constant currency cloud and software revenue in 2018, and non-IFRS constant currency operating margin in 2018. The KPIs and their respective target values are derived from SAP’s budget for that year. For more information about financial KPIs, see the Performance Management System section.

 

If the weighted target achievement for the financial KPIs is below 75%, there is no STI payout for the financial KPIs. In this case, the target achievement for these KPIs is set to zero.

 

On February 20, 2019, the Supervisory Board assessed SAP’s performance against the agreed targets and determined the amount of the STI 2018 for the entire Executive Board. This resulted in a target achievement of 93.0% (cloud and software revenue growth of 125.8%, operating margin increase of 92.2%, and new cloud bookings of 64.9%).

 

The STI compensation for 2018 will be paid out after the Annual General Meeting of Shareholders in May 2019. It is paid in the Executive Board member’s home currency1). All Executive Board members are obliged to purchase SAP shares worth at least 5% of the actual payout amount according to appropriate trading period regulations. These shares are subject to a three-year holding period.

 

Long-Term Incentive

 

The purpose of the long-term, multi-year performance-based compensation (Long-Term Incentive, LTI) is to reward the annual achievement of the non-IFRS constant currency operating profit, to ensure long-term retention of our Executive Board members

(“Retention”), and to reward them for a long-term SAP share price performance (“Performance”) as compared to its main peer group (Peer Group).

 

The LTI 2016 plan came into effect on January 1, 2016. It is a virtual share program with a term of four years per tranche.

 

Under the plan, a new LTI tranche is granted annually. Each grant starts with determining a grant amount in euros. This grant amount is based on the Executive Board members’ contractual LTI target amount and the operating profit target achievement (non-IFRS, at constant currency) for the previous year. Taking this target achievement into account, the grant amount can be adjusted upwards or downwards in the range of 80% to 120% of the contractual LTI target amount. The 2017 operating profit target achievement was 95.4%. Considering this, the Supervisory Board set the grant amount of the 2018 tranche at 95.4% of the contractual LTI target amount.

 

This grant amount is converted into virtual shares (Share Units), so that Executive Board members participate in further share price developments. The grant price is the arithmetic mean of the XETRA closing prices of SAP stock on the 20 trading days following publication of SAP’s fourth-quarter results. The grant date of the 2018 tranche was February 21, 2018.

 

All Share Units granted in this way, comprising 60% Performance Share Units (PSUs) and 40% Retention Share Units (RSUs), have a vesting period of approximately four years, during which the Executive Board member must actively contribute to the Company’s operations. The value of the Share Units varies positively and negatively with the performance of SAP’s share price. At the end of the vesting period, the corresponding Share Units are non-forfeitable.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1) Home currency is the currency of the Executive Board member’s primary place of residence.


 

 

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LTI Grant Process

 

 

The payout price used for the settlement is the simple arithmetic mean of the XETRA closing prices of SAP stock on the 20 trading days following the publication of SAP’s fourth-quarter results subsequent to the end of the vesting period. The payout price is capped at 300% of the grant price. The LTI tranche is paid in euros after the Annual General Shareholders’ Meeting of the corresponding year. Any potential foreign currency exchange rate risk is borne by the Executive Board members themselves.

 

The number of Share Units that will finally result in payments to the Executive Board members can and will likely differ from the number originally granted. The number of PSUs ultimately paid out changes depending on the performance of the SAP share relative to the Peer Group Index at the end of the vesting period. This places more weight on SAP’s performance within the industry. In contrast, the final number of RSUs is fixed. However, both types of Share Units may expire during the entire term of a tranche under certain conditions (see the “LTI Forfeiture Rules” graphic below).

PSU Calculation

 


 

 

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SAP’s share price performance is measured by comparing the grant price against the payout price. We calculate the difference between SAP’s share price performance and the Peer Group Index performance. In case of an increased SAP share price and an outperformance against the Peer Group Index, the calculated difference is doubled to reward positive performance. The following examples of the PSU calculation illustrate possible outcomes assuming 1,000 PSUs granted:

 

SAP share price performs better than Peer Group Index

SAP share price performance

 

 

 

+18%

Peer Group Index performance

 

 

 

+10%

Difference

 

+18% – (+10%)

 

+8%

Performance factor with doubled difference

 

(+8% x 2) + 100%

 

116%

Final number of PSUs

 

116% x 1,000

 

1,160

 

 

SAP share price performs much higher than Peer Group Index;

cap is triggered

 

SAP share price performance

 

 

 

+30%

Peer Group Index performance

 

 

 

–5%

Difference

 

+30% – (–5%)

 

+35%

Performance factor with doubled difference

 

(+35% x 2) + 100%

 

170%

 

 

Capped at

 

150%

Final number of PSUs

 

150% x 1,000

 

1,500

 

Peer Group Index performs better than SAP share price

 

 

SAP share price performance

 

 

 

+5%

Peer Group Index performance

 

 

 

+10%

Difference

 

+5% – (+10%)

 

–5%

Performance factor

 

 –5% + 100%

 

95%

Final number of PSUs

 

95% x 1,000

 

950

 

 

Peer Group Index performs better than SAP share price;

low hurdle triggered

 

SAP share price performance

 

 

 

–10%

Peer Group Index performance

 

 

 

+50%

Difference

 

 –10% – (+50%)

 

–60%

Performance factor

 

 –60% + 100%

 

40%

 

 

Hurdle is 50%

 

0%

Final number of PSUs

 

0% x 1,000

 

0

The Peer Group Index currently includes the following major international competitors of SAP: Microsoft, IBM, Oracle, Salesforce, Adobe, VMWare, Workday, ServiceNow, Symantec, and Tableau. The Supervisory Board has defined this group based on internal and external recommendations and, if necessary, adjusts the group, for example, in case of a competitor’s delisting. The Peer Group Index is calculated as a price index based on weighted market capitalization. Each Peer Group competitor is applied at a maximum of 15%. Consequently, the weight of smaller, more volatile competitors is increased in relation to their size, resulting in a highly ambitious index. The index is calculated daily by Deutsche Börse Group and can be tracked under ISIN DE000A2BLEB9.

 

Composition and Weighting of Peer Group Index

 

 

 

LTI Forfeiture Rules

 

If an Executive Board member’s service contract is terminated before the end of the third year following the year in which the Share Units were granted, both the PSUs and RSUs are forfeited in whole or in part, depending on the circumstances of the relevant resignation from office or termination of the service contract. In case PSUs and RSUs are forfeited in part, the percentage of the forfeiture is proportional to the four-year vesting period of each grant. This means that 25% of the grant is earned each year of the vesting period. Unearned grants are forfeited.


 

 

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LTI Forfeiture Rules

 

 

1) Example calculation with four tranches (grant allocation of 100%, stable share price from grant to vest, and no consideration of performance condition);
Executive Board member’s contract terminates after year four (December 31, 2019)

 

2) For the definition, see the Early End-of-Service Undertakings section

 

 


The change from the previous RSU Milestone Plan to the LTI 2016 Plan required a transition rule in order to avoid unjustified disadvantages for Executive Board members. In the event an Executive Board member leaves the company, the disadvantage arises from the difference in the one-year vesting period in the RSU Milestone Plan in comparison to the four-year vesting period in the LTI 2016 Plan. In order to compensate for this disadvantage related to the vesting periods, an individual equalization amount was determined for Executive Board members who participated in the RSU Milestone Plan.

 

The equalization amount has been subject to:

 

         A target achievement of at least 60% of the non-IFRS constant currency operating profit target, and

 

         An ongoing employment relationship in 2016, 2017, and, in one case, in 2018.

 

In the event an Executive Board member leaves the company and PSUs would otherwise be forfeited on a pro rata basis, the Executive Board member is entitled to PSUs equal to the equalization amount. The following graphic gives an example of how the equalization amount was derived, assuming a grant of 1,000 for the RSU Milestone Plan, a grant of 1,500 for the LTI 2016 Plan, and a forfeiture of the grants on a pro rata temporis basis on December 31, 2019:


 

 

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Clawback Provisions

 

SAP has the contractual right to request that the Executive Board member returns any payments made from STI or LTI if it subsequently emerges that the payment was not justified in whole or in part because targets were not achieved at all or not achieved in the scope assumed when calculating the payment amount due on account of false information having been provided. In such case, the Executive Board member is obliged to repay to SAP the amount by which the payment actually made exceeds the payment amount due on the basis of the targets actually achieved. Such contractually agreed claim to repayment supplements the claim for restitution of unjustified enrichment pursuant to section 812 of the German Civil Code (BGB).

 

Minimum and Maximum Compensation

 

The minimum compensation amount reflects the fixed compensation amount and an LTI and STI payout of zero.

 

The maximum compensation amount is capped at 362% (CEO) and 317% (Executive Board member other than CEO) of the total target compensation. This would be achieved in the event of the maximum possible payout amount of the STI and the LTI, as follows:

 

         The maximum possible payout amount of the STI is reached when the target achievement of all financial KPIs is 140%.

         The maximum possible payout amount for the LTI tranche is 468% of the contractual target amount.

 

The maximum possible payout amount of the LTI is reached if all of the following conditions are cumulatively met:

 

         The grant amount for the LTI tranche has been set at its capped maximum of 120% of the contractual target amount.

         SAP’s share price outperforms the Peer Group Index by at least 25 percentage points (reaching the capped maximum 150% of the initial PSU allocation for that year).

         The SAP share price has at least tripled (corresponding to an average annual increase of approximately 32%) compared to the grant price (cap on share price development).

 

In the event of the maximum LTI payout for the entire Executive Board of 123 million in 2022, the shareholders would also benefit through the strong increase in market capitalization, which would be at least 200 billion from 2018 to 2022.

The following graphic illustrates the relation of the fixed and performance-based compensation elements in the Executive Board members’ target compensation for 2018 based on € amounts, as well as the minimum and maximum possible compensation. The height of the bars is not indicative of the absolute compensation amount.

 

Compensation Scheme 2018

 

 

 

 

Overview of the Relations Between Target and Payout for Performance-Based Compensation

 

The total target achievements of STI reflect the relation between the target amount and the payout amount. The STIs for the years 2014 to 2017 were already paid out.

 

STI Total Target Achievement

 

Percentage

 

2018

 

2017

 

2016

 

2015

 

2014

 

 

93.0

 

88.2

 

104.4

 

147.5

 

109.5


 

 

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The relation between the LTI target amounts for the 2016 to 2018 tranches and the theoretical payout amounts are based on SAP’s share price at year end. The 2014 tranche discloses the relation between the respective target amount and the actual payout amount in May 2018. The 2015 tranche discloses the relation between the respective target amount and the payout amount scheduled for May 2019.

 

Relation Between Target Amount and Payout Amount of the LTI

 

Percentage

 

LTI 2016 Plan

 

RSU Milestone Plan
2015

 

 

 

 

2018
Tranche
1)

 

2017
Tranche
1)

 

2016
Tranche
1)

 

2015
Tranche
2)

 

2014
Tranch
e

 

 

12/31/2018

 

90.87

 

82.65

 

55.50

 

233.77

 

119.61

 

 

12/31/2017

 

NA

 

107.76

 

126.97

 

240.73

 

119.61

 

1) Consideration of theoretical payout amounts based on SAP’s share price at year end

2) Consideration of individual adjustment factor in addition to target achievement 2015 ranging between 31.62% and 37.38%

 

Amount of Compensation for 2018

 

We present the Executive Board compensation disclosures in accordance with the recommendations of the German Corporate Governance Code (“GCGC”). Furthermore, the tables below provide a reconciliation statement following the requirements of sections 314 and 315 of the German Commercial Code (Handelsgesetzbuch, or “HGB”) as specified in the German Accounting Standards (“GAS 17”). Pursuant to the recommendations of the GCGC, the value of benefits granted for the year under review as well as the benefits received, that is, the amounts disbursed for the year under review, are disclosed below based on the reference tables recommended in the GCGC. In contrast to the disclosure rules stipulated in the German HGB and GAS 17, the GCGC includes the pension expense, that is, the service cost according to IAS 19, in the Executive Board compensation and requires the additional disclosure of the target value for the one-year variable compensation and the maximum and minimum compensation amounts achievable for the variable compensation elements.


 

Executive Board Members’ Compensation

 

German Corporate Governance Code

 

 

 

€ thousands

 

Bill McDermott
CEO

 

Robert Enslin
Member of the Executive Board

 

 

 

 

Benefits Granted

 

 

Benefits Received

 

 

Benefits Granted

 

 

Benefits Received

 

 

 

 

20181)

 

2018
(Min)

 

 

2018
(Max)

 

 

20171)

 

20181)

 

20171)

 

20181)

 

2018
(Min)

 

 

2018
(Max)

 

 

20171)

 

20181)

 

20171)

 

Fixed compensation

 

1,314.7

 

1,314.7

 

1,314.7

 

1,374.3

 

1,314.7

 

1,374.3

 

800.2

 

800.2

 

800.2

 

836.5

 

800.2

 

836.5

 

Fringe benefits2)

 

794.7

 

794.7

 

794.7

 

1,271.9

 

794.7

 

1,271.9

 

105.1

 

105.1

 

105.1

 

368.1

 

105.1

 

368.1

 

Total

 

2,109.4

 

2,109.4

 

2,109.4

 

2,646.2

 

2,109.4

 

2,646.2

 

905.3

 

905.3

 

905.3

 

1,204.6

 

905.3

 

1,204.6

 

One-year variable compensation

 

2,193.0

 

0

 

3,070.2

 

2,093.7

 

1,846.7

 

2,486.9

 

1,327.3

 

0

 

1,858.2

 

1,267.2

 

1,117.7

 

1,505.2

 

Multi-year variable compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LTI 2016 Plan

 

6,876.6

 

0

 

28,535.4

 

7,741.2

 

 

 

 

 

2,270.3

 

0

 

9,420.8

 

2,555.7

 

 

 

 

 

RSU Milestone Plan 2015

 

 

 

 

 

 

 

 

 

5,251.0

 

5,787.6

 

 

 

 

 

 

 

 

 

1,248.8

 

 

 

SAP SOP 2010 and 2011

 

 

 

 

 

 

 

 

 

 

 

10,178.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

11,179.0

 

2,109.4

 

33,715.0

 

12,481.1

 

9,207.1

 

21,099.0

 

4,502.9

 

905.3

 

12,184.3

 

5,027.5

 

3,271.8

 

2,709.8

 

Service cost

 

568.3

 

568.3

 

568.3

 

686.2

 

568.3

 

686.2

 

235.8

 

235.8

 

235.8

 

194.1

 

235.8

 

194.1

 

Total according to GCGC

 

11,747.3

 

2,677.7

 

34,283.3

 

13,167.3

 

9,775.4

 

21,785.2

 

4,738.7

 

1,141.1

 

12,420.1

 

5,221.6

 

3,507.6

 

2,903.9

 

 

 

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German Corporate Governance Code

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

€ thousands

 

Adaire Fox-Martin
Member of the Executive Board

 

Christian Klein
Member of the Executive Board
(from 1/1/2018)

 

 

 

 

Benefits Granted

 

 

Benefits Received

 

 

Benefits Granted

 

 

Benefits Received

 

 

 

 

2018

 

2018
(Min)

 

 

2018
(Max)

 

 

2017

 

2018

 

2017

 

2018

 

2018
(Min)

 

 

2018
(Max)

 

 

2017

 

2018

 

2017

 

Fixed compensation

 

700.0

 

700.0

 

700.0

 

466.7

 

700.0

 

466.7

 

700.0

 

700.0

 

700.0

 

 

 

700.0

 

 

 

Fringe benefits2)

 

54.6

 

54.6

 

54.6

 

82.4

 

54.6

 

82.4

 

13.1

 

13.1

 

13.1

 

 

 

13.1

 

 

 

Total

 

754.6

 

754.6

 

754.6

 

549.1

 

754.6

 

549.1

 

713.1

 

713.1

 

713.1

 

0

 

713.1

 

0

 

One-year variable compensation

 

1,125.8

 

0

 

1,576.1

 

755.6

 

666.5

 

 

 

1,125.8

 

0

 

1,576.1

 

 

 

 

 

 

 

Multi-year variable compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LTI 2016 Plan

 

2,128.8

 

0

 

8,833.7

 

1,680.0

 

 

 

 

 

1,793.2

 

0

 

7,441.2

 

 

 

 

 

 

 

RSU Milestone Plan 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SAP SOP 2010 and 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

4,009.2

 

754.6

 

11,164.4

 

2,984.7

 

1,421.1

 

549.1

 

3,632.1

 

713.1

 

9,730.4

 

0

 

713.1

 

0

 

Service cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total according to GCGC

 

 

4,009.2

 

754.6

 

11,164.4

 

2,984.7

 

1,421.1

 

549.1

 

3,632.1

 

713.1

 

9,730.4

 

0

 

713.1

 

0

 

 

€ thousands

 

Michael Kleinemeier
Member of the Executive Board

 

 

Bernd Leukert
Member of the Executive Board

 

 

 

 

Benefits Granted

 

 

Benefits Received

 

 

Benefits Granted

 

 

Benefits Received

 

 

 

 

2018

 

2018
(Min)

 

 

2018
(Max)

 

 

2017

 

2018

 

2017

 

2018

 

2018
(Min)

 

 

2018
(Max)

 

 

2017

 

2018

 

2017

 

Fixed compensation

 

700.0

 

700.0

 

700.0

 

700.0

 

700.0

 

700.0

 

700.0

 

700.0

 

700.0

 

700.0

 

700.0

 

700.0

 

Fringe benefits2)

 

29.1

 

29.1

 

29.1

 

29.0

 

29.1

 

29.0

 

10.3

 

10.3

 

10.3

 

30.3

 

10.3

 

30.3

 

Total

 

729.1

 

729.1

 

729.1

 

729.0

 

729.1

 

729.0

 

710.3

 

710.3

 

710.3

 

730.3

 

710.3

 

730.3

 

One-year variable compensation

 

1,125.8

 

0

 

1,576.1

 

1,125.8

 

992.9

 

1,175.3

 

1,125.8

 

0

 

1,576.1

 

1,125.8

 

992.9

 

1,175.3

 

Multi-year variable compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LTI 2016 Plan

 

2,128.8

 

0

 

8,833.7

 

2,396.4

 

 

 

 

 

2,397.7

 

0

 

9,949.7

 

2,699.3

 

 

 

 

 

RSU Milestone Plan 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,248.8

 

 

 

SAP SOP 2010 and 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

3,983.7

 

729.1

 

11,138.9

 

4,251.2

 

1,722.0

 

1,904.3

 

4,233.8

 

710.3

 

12,236.1

 

4,555.4

 

2,952.0

 

1,905.6

 

Service cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total according to GCGC

 

 

3,983.7

 

729.1

 

11,138.9

 

4,251.2

 

1,722.0

 

1,904.3

 

4,233.8

 

710.3

 

12,236.1

 

4,555.4

 

2,952.0

 

1,905.6

 

 

 

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€ thousands

 

Jennifer Morgan
Member of the Executive Board

 

 

Luka Mucic
Member of the Executive Board

 

 

 

 

Benefits Granted

 

 

Benefits Received

 

 

Benefits Granted

 

 

Benefits Received

 

 

 

 

20181)

 

2018
(Min)

 

2018
(Max)

 

20171)

 

20181)