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Red Hat CFO departs company three months after IBM merger

This story has been updated to include additional compensation Eric Shander received in fiscal year 2019.

Eric Shander, Red Hat’s chief financial officer, is no longer at the company, Red Hat confirmed in a statement on Thursday.

His departure comes three months after IBM completed its $34 billion purchase of the Raleigh-based company, one of the biggest tech mergers ever completed.

“I can confirm that Eric Shander is no longer at Red Hat,” Stephanie Wonderlick, vice president of corporate communications at Red Hat, said in an email.

Eric_Shander_1_CU (1)
Eric Shander

Wonderlick said Red Hat has named Laurie Krebs, the company’s senior vice president of finance, as his replacement. Krebs previously served in senior roles at Cree and Nortel Networks

“We have confidence that Laurie will help continue and drive Red Hat’s strong momentum, including that resulting from the acquisition by IBM,” Wonderlick said. “Red Hat’s accounting and control functions remain healthy.”

Shander joined Red Hat in November 2015. He became chief financial officer in 2017, taking over the position from Frank Calderoni.

Prior to working at Red Hat, Shander worked at IBM and Lenovo in financial roles.

In fiscal year 2019, the last that it reported as a publicly traded company, Red Hat said it paid Shander about $3.8 million in total compensation, according to a filing with the U.S. Securities and Exchange Commission.

Shander was also in line for a big payday, if he stayed with Red Hat until the one-year anniversary of its merger with IBM.

In June, Red Hat reported to the SEC that it would give Shander a “cash retention award” of $4 million if he stayed with the company for 12 months past the official close of the merger with IBM. The grant was part of an effort to keep top executives from leaving the company because of the merger.

The grant would have been paid in two installments, with Shander receiving 50% of the grant on the six-month anniversary of the closing date and 50% on the one-year anniversary, if he was still employed by the company.

If he was “involuntarily terminated without cause” before those milestones, Shander was to receive any unpaid portion of the grant, the filing said.

It is unclear whether his departure makes him ineligible for the grant.

“We do not discuss associate relations matters, so I am unable to provide further details,” Wonderlick said.

IBM declined to comment.

IBM is banking that buying Red Hat will give the company an advantage in the cloud technology space. CEO Ginni Rometty has said the deal is crucial to stay competitive in hybrid cloud software, where IBM is competing with tech giants, such as Microsoft, Google and Amazon.

The hybrid cloud — where companies use a mix of on-site, private and third-party cloud services, such as Amazon’s AWS and Microsoft’s Azure — is an emerging $1 trillion opportunity that the companies want to be prepared for, Rometty noted last year.

When the merger was announced, the two companies stressed that Red Hat will remain largely independent as part of the deal, but many in the Raleigh area have worried about a potential culture clash between IBM and the open-source ethos of Red Hat.

IBM has maintained that Red Hat’s headquarters will stay in downtown Raleigh, where it has more than 2,000 employees at its tower, making it one of the city’s largest employers. The company has been downtown since 2013, when it moved from N.C. State University’s Centennial Campus, bringing around 600 employees at the time. Worldwide, the company had approximately 12,600 employees as of August 2018.

IBM also has a large office in Research Triangle Park, where it employs thousands.

This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate

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Zachery Eanes is the Innovate Raleigh reporter for The News & Observer and The Herald-Sun. He covers technology, startups and main street businesses, biotechnology, and education issues related to those areas.
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