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Red Hat CFO violated workplace standards before his dismissal, company says

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

Eric Shander, Red Hat’s former chief financial officer, was dismissed from his role without pay, Red Hat confirmed Friday.

Shander’s departure from the company was related to the company’s workplace standards, Stephanie Wonderlick, vice president of corporate communications at Red Hat, told The News & Observer.

Wonderlick said she was not able to provide any additional details about how Shander broke the company’s workplace standards.

Eric_Shander_1_CU (1)
Eric Shander

The News & Observer first reported Shander’s departure on Thursday.

Shander had been with the open-source software company since 2015, becoming the head of finance for the company in 2017.

He presided over the company’s finances as IBM bought it for $34 billion, helping navigate one of the largest tech mergers ever.

Red Hat has named Laurie Krebs, the company’s senior vice president of finance, as Shander’s replacement. The Wall Street Journal first reported that Shander had been dismissed without pay in its CFO Journal newsletter.

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.

Before his dismissal, Shander had been in line for 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 expected to be paid out over two installments, one six months after the official close of the IBM merger and the other on the one-year anniversary.

The only way Shander could receive that grant without staying at Red Hat the entire term was if he was “involuntarily terminated without cause” before those milestones, the filing with the SEC said.

A voicemail left with a phone number associated with Shander was not returned.

Red Hat said Thursday it is confident that Shander’s replacement, Krebs, will continue Red Hat’s momentum post-IBM merger.

Shander’s departure comes about three months after IBM closed on its bid to buy Red Hat — a move that IBM made to become more competitive in the hybrid-cloud software space, where IBM competes with other tech giants such as Microsoft, Google and Amazon.

While it is now a subsidiary of IBM, Red Hat still maintains an independent presence in Raleigh, where it has more than 2,000 employees at its downtown tower.

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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