Red Hat Finance Chief Loses Bonus After Ouster -- WSJ
14 Octobre 2019 - 9:02AM
Dow Jones News
By Nina Trentmann
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (October 14, 2019).
Red Hat Inc.'s finance chief Eric Shander has been dismissed
from the company, forfeiting a $4 million retention award that was
agreed to ahead of Red Hat's acquisition by International Business
Machines Corp.
The Raleigh, N.C.-based software company confirmed late Thursday
that Mr. Shander was no longer working at Red Hat. "Eric was
dismissed without pay in connection with Red Hat's workplace
standards," a company spokeswoman said in a statement.
The company, which said that its accounting and control
functions remain healthy, on Friday declined to provide specifics
about what led to Mr. Shander's dismissal.
Mr. Shander didn't immediately respond to a request for
comment.
Mr. Shander was named Red Hat's permanent chief financial
officer in April 2017 after a stint as acting CFO, according to the
spokeswoman. He had served in various finance roles at IBM and
Lenovo Group Ltd. before joining Red Hat in 2015.
Mr. Shander's ouster comes about three months after IBM
completed its $34 billion purchase of Red Hat, a move aimed at
capturing growth opportunities in the cloud space.
His departure puts Red Hat in a difficult spot, said Ivan
Feinseth, director of research at Tigress Financial Partners LLC,
an investment banking firm.
"The fallout for companies in these situations is not only the
dismissal of an executive but also the litigation risk," Mr.
Feinseth said. "Companies could be held responsible for not
creating and maintaining a proper workplace environment."
IBM said it supports Red Hat's decision to dismiss Mr. Shander.
"Our values are fully aligned in this area," a spokesman said.
Red Hat and Mr. Shander on May 31 agreed to a cash retention
award of $4 million that would vest in two installments, six months
and 12 months after the closing date of the transaction with IBM.
The retention award, and others like it, were intended to keep key
employees in place during the transition period, the company said
in a filing.
Mr. Shander was dismissed without pay, the company said. To
receive a retention payment installment, Mr. Shander would have had
to remain continuously employed by the company or an affiliate
through the vesting date, according to the agreement.
Laurie Krebs, Red Hat's senior vice president for finance, has
taken over as CFO, the company said. "We have confidence that
Laurie will help continue and drive Red Hat's strong momentum,
including that resulting from the acquisition by IBM," the Red Hat
spokeswoman said in an emailed statement.
IBM is scheduled to report quarterly earnings on Oct. 16, with
analysts and investors expecting insights into the current state of
the business.
"We need to see some sort of recovery in top-line growth," said
Moshe Katri, an analyst at Wedbush Securities Inc., pointing to
successive quarters of revenue declines at IBM.
The company said in July that revenue fell for its fourth
straight quarter.
Write to Nina Trentmann at Nina.Trentmann@wsj.com
(END) Dow Jones Newswires
October 14, 2019 02:47 ET (06:47 GMT)
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