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Executive Reputation

2nd April
2007
written by Dr. Leslie Gaines-Ross

If there was any doubt that executive reputation matters, take a look at what happened to SAP when Shai Agassi surprisedly resigned. SAP’s stock declined 24 percent upon the news.

Apparently Agassi, head of SAP’s software products, did not want to wait for current CEO Kagermann to retire sometime in 2009. Supervisory board chairman and founder Hasso Plattner said, “It became apparent that Shai was not comfortable committing to a 10 to 15 year period which was not in keeping with his personal career timeline.” Agassi is 38 years old and was looking at the “possibility” of becoming CEO when he neared 50. Reports say that Agassi is going to pursue interests in global climate change and environmentalism. Good for him.

It is not surprising that the young SAP executive does not want to wait til his hair turns gray to become CEO or co-CEO with Leo Apotheker. Many executives who are promised the CEO job never make it to day one. Either the CEO delays their leave date or the tension of waiting creates an unpleasant working environment for all those involved. Agassi probably made the right decision since 10 to 15 years is a long time to be on hold for an ambitious talented individual.

Despite the drama over Agassi’s resignation, it is clear that the reputation of an individual executive can make a significant impact on company reputation and carry a premium on the share price that is hard to overlook.

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3 Comments

  1. Cmreddy
    04/04/2007

    Apparently, you dont know how to calculate the percentages.. Share price fell from 34.5 euros to 33.3 euros and with in a week it rebounded back to 34.5 euros.. indicating there is absolutely no impact of Shai leaving SAP. You might have calculated from 3 months back.. but the share price fell due to not meeting the expectations of the market.

    Not only this, the other content is mostly with questionable merit. And true to your job you are selling the key words reputation and not sticking to the facts.. Too bad..

  2. LGR
    04/04/2007

    You are right that the reference re the share price was faulty. I believe I picked it up incorrectly and should have checked. Apologies to my readers.

    I do stand by my argument about the importance of executive reputation and use of the tag word.

    Thanks.

  3. Cmreddy
    04/04/2007

    So what is left in this particular blog for you to prove that the reputation of SAP being affected by the resignation of Shai Agassi?

    It is business as usual for everyone both inside SAP and at least for the share markets.

    May be you need to rework and come up with new arguments to prove your point..

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