SAP faces internal backlash over new bonus system favoring managers
SAP SE, Europe's most valuable software company, is facing widespread frustration among staff after a newly introduced bonus system appeared to reward underperforming managers while setting higher performance standards for lower-level employees.
According to a Bloomberg report citing internal documents and staff familiar with the situation, the changes have led to a sharp internal backlash. The company reportedly allocated millions of euros to resolve complaints and adjust the incentive structure, which had been part of a broader effort to link compensation more closely to performance.
The program, first rolled out in February 2026, was designed by Chief People Officer Gina Vargiu-Breuer at the request of CEO Christian Klein. It divided employees into five pay tiers, from entry-level (T1) to senior management (T5). Staff in the three lower tiers had to exceed expectations to qualify for stock-based bonuses, while managers in T4 and T5 could still earn incentives despite missing targets.
The controversy prompted Klein to instruct Vargiu-Breuer’s team to revise the framework. An SAP spokesperson told Bloomberg that the company had “identified additional areas for refinement related to stock-based compensation for non-executives” and said that ensuring fair and competitive pay “remains a priority.”
The dispute comes at a challenging time for SAP, which has lost about €135 billion in market value since peaking a year ago. Internal confidence in the executive board has also dropped to 59%, down from more than 80% in 2021. The issue could further strain leadership continuity, as Vargiu-Breuer’s contract expires in early 2027 amid a series of high-profile executive departures.
Over the past few years, SAP has seen the exits of former co-CEO Jennifer Morgan, CFO Luka Mucic, and several board members including Sabine Bendiek, Scott Russell, Julia White, and Jürgen Müller. Product engineering head Muhammad Alam has also said he will not renew his contract next year.
Klein’s own compensation totaled €16.2 million in 2025, about 14% less than the prior year. The company is also under pressure to strengthen its position in artificial intelligence after early users reported mixed experiences with Joule, SAP’s new AI assistant.
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