SAP's top executive retires with Q2 2022 earnings release

As ​​second-quarter results drag shares of enterprise giant SAP down, SAP North America president DJ Paoni is leaving the company, TechCrunch sources have learned. SAP has confirmed the news, stating that Paoni is retiring from the company after 26 years.

“We sincerely believe that the momentum we are seeing in North America can be attributed to strong leadership, so the search for his successor is ongoing,” the company said. “An announcement will be made once confirmed. We thank DJ for his incredible contributions and wish him the best in this next chapter."

As head of US sales, Paoni played a leadership role in the business, leading strategy and day-to-day operations for the region, SAP's largest market. In many cases, he also acted as her public face in the United States. As an example, he spoke about the importance of employee mental health during the pandemic at a 2021 event hosted by The Washington Post.

While there have always been discussions about tensions between SAP's US and German headquarters, Constellation Research analyst Holger Muller says he doesn't necessarily see that coming into play here.

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“There are always rumors of tensions between German and American cultures when a leader leaves the United States. And while cultural challenges are common in global companies, they are no more important at SAP than among other technology providers," he said.

He added that it would be interesting to see who SAP chooses as Paoni's successor. “It will be interesting to see who succeeds Paoni, a 26-year SAP veteran. We can see the generational change that happened at the board level happening now in the SAP regions. »

Executive turnover is actually not unusual in the business. Former CEO Bill McDermott stepped down in 2019 after 17 years with the organization and became CEO of ServiceNow shortly thereafter. The company replaced McDermott with a co-CEO setup that included Germany-based Christian Klein and US-based Jennifer Morgan. After six months, Morgan resigned. Most recently, Rob Enslin left SAP after 27 years to join Google Cloud, before becoming CEO of UiPath.

Paoni's departure was announced yesterday, the same day SAP announced its second quarter 2022 results. According to CNBC, the company reported overall revenue growth of 13%, with cloud revenue specifically increasing by 34 %. However, the company cut its profit forecast, a setback attributed to the war in Ukraine.

Currently, SAP shares are down 38% from their 52-week high, but up 3.71% from yesterday's closing price.