SAP's U.S. Chief Is Latest In Series of Resignations
By MATTHEW ROSE
Staff Reporter of THE WALL STREET JOURNAL
March 4, 1999
SAP AG said the president of its U.S. unit, Jeremy Coote, has resigned, the latest in a series of high-level defections.
Mr. Coote, who had been with the German software giant for more than 10 years, left to join rival Siebel Systems Inc., based in San Mateo, Calif., according to people familiar with the situation.
His responsibilities will be assumed by the current chief executive of SAP in the U.S., Kevin McKay. Mr. Coote couldn't be reached for comment. A Siebel spokeswoman said the company won't discuss new executive appointments.
In recent months, several senior executives -- including a chief executive and sales and marketing chiefs -- have left SAP's U.S. operations to join rival companies or start-ups. Analysts and executives cite SAP's uncompetitive compensation program as well as a slowdown in its core market for enterprise software. SAP, based in Walldorf, Germany, is the world leader in products that automate companies' basic internal operations.
Mr. McKay said the company is considering ways to sweeten its stock incentive program. SAP can't offer a traditional stock-option program because of restrictions in German law. "If you add up the total benefits package, it won't measure up" to some other companies, Mr. McKay conceded. "But I am keeping track of departures and I just don't see a huge flood."
Mr. McKay said Mr. Coote was "presented with a unique opportunity to strike out and take a chance with something else."
Charles Phillips, an analyst with Morgan Stanley Dean Witter in New York, said he wasn't surprised to see increasing turnover at the company given the depressed state of the market, but said it was a "concern to see that many people leave any organization." In Frankfurt trading Wednesday, SAP's stock fell 6.7% to 316.40 euros ($345.98), down 22.60 euros, mostly because of Tuesday's poor financial results from Dutch rival Baan, analysts said.
SAP's U.S. unit has grown to become the company's most important revenue source, contributing 46% of its 8.47 billion marks ($4.74 billion) in 1998 revenue. It was also the company's fastest-growing region last year, posting a 52% jump in sales.
Mr. Coote joined SAP in Switzerland in 1988 and rose through the ranks to become president of U.S. operations in 1996, with responsibility for the company's sales and service operations there. Although a key figure in SAP's U.S. success, he was passed over for the job of chief executive last year in favor of Mr. McKay.
The company also announced on Wednesday a reorganization of its U.S. unit into six industry sectors to better target customer needs.
--Don Clark in San Francisco contributed to this report. |
