SAP top exec retires as Q2 2022 earnings come out
As Q2 earnings send enterprise giant SAP’s stock down, President of SAP North America DJ Paoni is leaving the enterprise company, TechCrunch has learned from sources. SAP confirmed the news, saying that Paoni is retiring from the company after 26 years.
“We truly believe the momentum we’re seeing in North America can be attributed to strong leadership, so the search for his successor is underway,” the company said. “An announcement will be made when confirmed. We thank DJ for his incredible contributions and wish him the best in this next chapter.”
As head of U.S. Sales Paoni had a prominent role in the company, running strategy and day to day operations for the region, SAP’s largest market. In many instances, he also acted as its public face in the U.S. As an example, he spoke about the importance of employee mental health during the pandemic in a 2021 event put on by The Washington Post.
While there has always been chatter about tension between SAP’s American and German headquarters, Constellation Research analyst Holger Muller says that he doesn’t necessarily see this coming into play here.
“There is always the rumor of tensions between the German and U.S. cultures when an executive leaves from the U.S. And while cultural challenges are common at global companies, they are not more prominent at SAP than other technology vendors,” he said.
He added that it will be intriguing to see who SAP chooses as Paoni’s successor. “It will be interesting to see who will succeed Paoni, a 26-year veteran of SAP. We may see the generational change that has happened at the board level now happening in the SAP regions.”
Executive turnover is actually not unusual at the company. Former CEO Bill McDermott stepped down in 2019 after 17 years with the organization and became CEO at ServiceNow not long after. The company replaced McDermott with a co-CEO setup that included Christian Klein based in German and Jennifer Morgan in the U.S. After six months, Morgan stepped down. More recently Rob Enslin left SAP after a 27 year run to join Google Cloud, and later moved to be CEO of UiPath.
Paoni’s departure was learned of yesterday, the same day that SAP announced Q2 2022 earnings. Per CNBC, the company reported overall revenue growth of 13%, with cloud revenue specifically growing 34%. However, the company did trim its profit expectations, a pullback attributed to the war in Ukraine.
Currently, SAP shares are down 38% from its 52-week high, but is up 3.71% from yesterday’s closing price.