SAP employees have reportedly raised concerns over a newly introduced bonus system in the company. A Bloomberg report, citing people familiar with the matter, said employees at the German software company have raised concerns about the new bonus payout system that favours underperforming managers while placing stricter performance expectations on lower-ranking staff.The compensation package has been reported to have caused internal conflicts within the teams, with employees and some members of management questioning its basis at a time when the company is undergoing restructuring and layoffs. SAP has reportedly set aside millions of euros to address employee concerns following the payment of bonuses to some senior employees who had not met expectations in their roles.The controversy comes as employee surveys indicate declining trust in the company’s executive leadership, adding to pressure on management at a time when shifting enterprise software demand and the growing role of artificial intelligence (AI) continue to reshape SAP’s business environment, the Bloomberg report added.This comes as AI tools challenge traditional enterprise software models, and SAP’s shares have shed about 135 billion euros (S$201.7 billion) in market value over the past year after rising sharply a year earlier. Recently, SAP announced that Christian Klein, the company’s chief executive officer, earned 16.2 million euros in 2025, roughly 14% less than in 2024.

Why did SAP have to revise its new bonus system after rollout

An SAP spokesperson told Bloomberg that it has introduced a new performance-linked compensation framework. The company spokesperson added that during the rollout, the company “identified additional areas for refinement related to stock-based compensation for non-executives.” The issues were reviewed and addressed “to the extent possible prior to the process finalisation,” he said, adding that “fair and competitive compensation for performance is a priority for SAP.”In 2023, Klein announced plans to revise the employee reward structure to encourage stronger performance outcomes. Responsibility for developing the new stock incentive plan was assigned to Chief People Officer Gina Vargiu-Breuer, and the programme was rolled out to employees this month, according to people familiar with the matter.Following complaints from employees and managers who said the system was unfair, Klein asked Vargiu-Breuer’s team to revise the framework, the report added. As per the report, the situation may even affect her position at the company after her contract expires in early 2027.“As is standard practice, SAP does not comment on individual personnel or contractual matters,” a company spokesperson said in an emailed response to Bloomberg.According to internal documents analysed by Bloomberg, SAP had five employee levels, ranging from T1, the entry level, to T5, for managers and senior employees. The three lower-level employees had to perform better than expected to qualify for stock-based bonuses. However, employees at T4 and T5 could still qualify for bonuses even if they did not meet the performance targets.SAP has experienced several leadership changes over the past six years, with multiple executive contracts ending earlier than planned and resulting in payout costs for the company. Klein’s co-CEO, Jennifer Morgan, left the company in 2020 after a brief tenure. Since 2023, chief financial officer Luka Mucic and executive board members Sabine Bendiek, Scott Russell, Julia White and Jurgen Muller have also left.Separately, Muhammad Alam, head of product engineering, does not intend to renew his contract when it ends next year, the report highlighted. An internal employee survey conducted in November 2025 also showed that 59% of staff said they trusted the executive board, which was down 6 percentage points from six months earlier, according to an internal email sent by Vargiu-Breuer and reviewed by Bloomberg. For comparison, more than 80% of employees expressed trust in executive leadership in April 2021.The leadership changes come as SAP adjusts its business strategy in response to developments linked to AI. Some early users of the company’s AI assistant, Joule, which was designed to help users work through SAP systems and assist with tasks such as coding, have expressed dissatisfaction, the report noted, citing customers and partners who spoke on condition of anonymity while discussing their relationship with the company.