Striving for a simple solution

Striving for simple solutions, a well thought through communication strategy and the right corporate culture: there are many reasons for the success of an employee share plan. More than 70 percent of eligible employees participated in OWN SAP – a SAP plan which was implemented with the support of Computershare, the share plan provider.​​​

​Seney Merkel​

Compensation & Benefits Senior Consultant, SAP​ ​

​Employee participation is a cornerstone at SAP and an inherent part of its corporate culture. After all, the success of the company is based on the activities and decisions taken by its employees. SAP introduced share based participation plans at a time when the company had less than 2,000 employees. Today more than 87,000 employees work for SAP and the company, with its headquarters in Germany, has evolved to be the global leader of company applications.

In the course of this evolution, existing employee share plans were put on trial. The result was the new plan OWN SAP which was set up in October 2016 for more than 73,000 eligible employees across 55 countries.​

Unique concept

One of the objectives of the plan was to make ​OWN SAP attractive for our employees, and to minimize the obstacles related to the investment risk" outlines Heike Neumann, Global Head of Executive Rewards and Equity at SAP. Each SAP employee can invest one to ten percent of their monthly income. SAP contributes an additional 40 percent of the employee investment and adds – for all plan participants with the exception of senior management – an additional purchase contribution of EUR 20. After the deduction of the employee investment via payroll, the shares are purchased directly from the market on a monthly basis, and immediately made available to the employees.

Clearly defined objectives

The administration of global share plans is getting more and more complex and cost-intensive. This is why one of the objectives was to design the plan to be as easy as possible from an administrative perspective. Special focus was placed on the automated checking of the eligible population of employees, as well as the automated processing of the plan in the payroll departments. At the same time, the enrolment process for employees should be as easy as possible. Due to the legal and technical complexities in the global context, this turned out to be one of the main challenges.

To what does OWN SAP owe its success?

As part of the digitalisation strategy of the company, SAP developed a user friendly application for its employees. This application allows employees to enrol for the plan quickly, at any time, and by using all devices. Shares can be sold without a vesting period. As a result, employees have their employee investment available immediately, according to their individual needs.

SAP is aware of the fact that high participation rates can only be achieved by using a well elaborated communication strategy. Local roadshows, where colleagues explained on-site in the local language how the plan works, were an important part of the communication campaign.

The common path of SAP and Computershare

SAP was supported by Computershare, one of the leading plan managers, during the implementation. The introduction of a share purchase plan in so many countries, with an average volume of more than 500,000 shares purchased per month, is a major challenge for both the administrator and the issuing company. Therefore, it is important to establish a high level of confidence. Jay Foley, Managing Director of Computershare Plans Europe adds: "Summarizing today the experience from the implementation of OWN SAP, we draw the conclusion that nothing is more rewarding than striving for absolute simplicity." The SAP slogan: "Equity. Run Simple" aligned both teams towards a common goal. 

We thoroughly analysed each aspect to ensure the implementation went as smoothly as possible, taking into consideration all the legal and tax requirements." The positive feedback and the unique employee participation rate show that the efforts paid off.

What is the status of the plan after one year?

One year after go-live, it is evident that the objectives have been met. Most of the 55,000 OWN SAP plan participants contribute the maximum employee investment possible. More than 90% of them keep their shares without selling them as soon as they are able to. Therefore, the plan demonstrates the strong shareholder culture within the employees of the organization. "Offering a plan without a vesting period was a courageous step," outlines Heike Neumann. "The success of OWN SAP is an expression of the confidence our employees have in the vision and strategy of the company. It shows that complex plan elements, such as vesting periods, are not inherently necessary."

Two awards from the Global Equity Organisation (most innovative and creative plan design, 2016; best plan effectiveness, 2017) are recognitions within the share plans industry. However, the best indicator of success is the positive reaction of the employees.​

​​​I am glad to be working in a company like SAP, which offers its employees the possibility to participate in its success.

Sargiz Betlazar, SAP Success Factors, USA