SAP's New Bonus System Sparks Internal Conflict Amid Restructuring
SAP employees have reportedly raised significant concerns over a newly introduced bonus system within the company. According to a Bloomberg report, citing sources familiar with the matter, staff at the German software giant are troubled by a compensation framework that appears to favor underperforming managers while imposing stricter performance expectations on lower-ranking employees.
The controversial bonus payout system has reportedly led to internal conflicts within teams, with both employees and some management members questioning its fairness. This unrest emerges at a critical time as SAP undergoes extensive restructuring and layoffs, adding to the company's operational challenges.
Financial and Leadership Implications
SAP has reportedly allocated millions of euros to address these employee concerns, following the payment of bonuses to certain senior employees who failed to meet performance targets. This move comes amid declining trust in the company's executive leadership, as indicated by recent employee surveys. The pressure on management is intensifying as shifting enterprise software demand and the growing influence of artificial intelligence continue to reshape SAP's business landscape.
In a related development, SAP's shares have lost approximately 135 billion euros in market value over the past year, after experiencing significant gains earlier. Additionally, CEO Christian Klein earned 16.2 million euros in 2025, a decrease of about 14% from the previous year, highlighting broader financial adjustments within the company.
Revisions and Internal Structure
An SAP spokesperson informed Bloomberg that the company has implemented a new performance-linked compensation framework. During the rollout, SAP identified areas for refinement, particularly concerning stock-based compensation for non-executive employees. The spokesperson emphasized that these issues were reviewed and addressed prior to finalization, stating that "fair and competitive compensation for performance is a priority for SAP."
In 2023, Klein announced plans to revise the employee reward structure to enhance performance outcomes. Chief People Officer Gina Vargiu-Breuer was tasked with developing the new stock incentive plan, which was rolled out this month. However, following complaints from employees and managers about perceived unfairness, Klein directed Vargiu-Breuer's team to revise the framework. Reports suggest this situation could impact her position when her contract expires in early 2027.
Employee Levels and Bonus Disparities
Internal documents reviewed by Bloomberg reveal that SAP categorizes employees into five levels, from T1 (entry-level) to T5 (managers and senior staff). Under the new system, employees at T1 through T3 must exceed performance expectations to qualify for stock-based bonuses. In contrast, those at T4 and T5 can still receive bonuses even if they do not meet their targets, a disparity that has fueled discontent among lower-ranking staff.
Leadership Turnover and Trust Issues
SAP has experienced numerous leadership changes over the past six years, with several executive contracts ending prematurely, resulting in significant payout costs for the company. Notable departures include co-CEO Jennifer Morgan in 2020, and since 2023, CFO Luka Mucic along with executive board members Sabine Bendiek, Scott Russell, Julia White, and Jurgen Muller. Additionally, Muhammad Alam, head of product engineering, does not plan to renew his contract when it expires next year.
An internal employee survey from November 2025 showed that only 59% of staff trust the executive board, a decline of 6 percentage points from six months earlier. For context, over 80% of employees expressed trust in executive leadership in April 2021, indicating a significant erosion of confidence.
AI Integration and Business Strategy
These leadership changes coincide with SAP's strategic adjustments in response to AI advancements. Some early users of SAP's AI assistant, Joule, designed to facilitate tasks within SAP systems, have expressed dissatisfaction, according to anonymous feedback from customers and partners. This highlights the challenges SAP faces in integrating AI tools while maintaining employee and customer satisfaction during a period of transformation.
