SAP shareholders OK new stock plan to keep execs

German software giant SAP's shareholders today approved a new stock program intended to provide its top executives American-style options.

The plan will make 6.25 million shares, or 6 percent of the company's capital, available to about 120,000 "top performers" and high-level executives, SAP said. A four-year vesting period is planned.

Shareholders approved SAP's stock plan changes by a 99 percent majority vote today at a general meeting held in Mannheim, Germany. The new program, previously reported by CNET News.com, will go into effect during the first quarter of the year, SAP said.

The stock issue has been a long-standing disadvantage for SAP, contributing to both hiring and retention problems within the German company's American headquarters in Philadelphia. More than 50 executives have left the company's American division in recent months, lured by SAP's U.S.-based rivals, start-ups and other firms that can offer lucrative stock packages.

Just last week, John Milana, chief financial officer at SAP America, resigned, joining a list of senior executives who have left the company over the past year, including former SAP America president Jeremy Coote. SAP is also now suing 27 ex-employees who left the company for rival Siebel Systems, claiming Siebel attempted to "injure SAP's business."

Over the past several years, SAP, under a program called Star, had awarded its top executives bonuses based on the company's stock performance. But for many, the bonuses were not enough. Today's vote is a coup for SAP, as it has not been common practice among European companies to grant stock options to employees due to certain regulatory issues.

The new option and convertible bond program, called the SAP AG 2000 Long-term Incentive Plan, will be launched alongside the Star bonus plan "to attract, retain and motivate senior managers and top performers," SAP said in a statement.