SAP AG (SAP) announced that the SAP Supervisory Board has reached an agreement with CEO Leo Apotheker not to extend his contract as a member of the SAP Executive Board. Leo Apotheker has resigned as CEO and member of the SAP Executive Board effective immediately.

The company said that it would split the leadership between two co-chief executives, naming Bill McDermott, head of field organization, and Jim Hagemann Snabe, head of product development, to those posts.

In addition, Vishal Sikka, Chief Technology Officer, has been appointed to the SAP Executive Board. At the request of the Supervisory Board, Hasso Plattner, Co-Founder of SAP and Chairman of the SAP Supervisory Board, will continue to play a strong role in advising the new leaders on technology and product development.

SAP’s sales fell sharply in September 2008 as companies reduced technology spending during the worldwide economic and  financial crisis. But SAP staged a smart recovery on the back of cost rationalization and reported a strong fourth quarter in Jan 2010.

The new setup of the SAP Executive Board will allow SAP to better integrate product innovation with customer needs. SAP AG, together with its subsidiaries, develops, markets, and sells enterprise application software products to corporations, government agencies, and educational institutions in Europe, the Middle East, Africa, North America and Latin

America, and the Asia Pacific-Japan region. Major competitors include International Business Machines Corp (IBM), Microsoft Corporation (MSFT) and Oracle Corporation (ORCL).

We currently have a Neutral recommendation on SAP.

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