With calls increasing for the company to name a new chief financial officer and its stock trading at less than half its value of three months ago, Red Hat named a new CFO Thursday morning.
The press release was issued at 4 AM.
The news did help bolster Red Hat stock during the day. It closed at $13.32, up 77 cents.
Charles Peters, the CFO for Burlington Industries, assumes the CFO post at the Linux software developer and services provider “effective immediately,” Red Hat said.
The news that a CFO with little experience in working with technology firms surprised a CFO who talked with Local Tech Wire about the hire. The executive wondered how quickly Peters could transition to the new role and also was somewhat awed by the details of Peters’ attractive incentive package.
In a statement issued by Credit Suisse First Boston, the analyst firm said the hiring of Peters was “not what we expected” even though he is “an experienced CFO.”
The firm stuck to its “outperform” rating for the stock.
The statement, as quoted by Forbes.com, read: “While we had not expected a known software player, we had expected the new CFO to have experience in scaling a global technology company.”
The decision comes more than two months after Kevin Thompson announced his decision to step down as CFO as Red Hat moved to restate earnings for the past three years.
Thompson’s departure and the review of Red Hat’s books triggered a rash of class-action lawsuits as well as a run on the company’s stock. Red Hat (Nasdaq: RHAT) traded at $29.06 on June 2, a 52-week high.
On Tuesday, Banc of America Securities issued a report on Red Hat saying that the stock would not rebound until a new CFO was in place. The firm also cut its expectations for the stock to $16 from $21.
“We believe that Red Hat remains well positioned to show strong revenue and cash flow growth,” its statement said but added that “valuation is likely to remain in check” until the CFO question was resolved.
In a statement, Red Hat CEO Matthew Szulik praised the new hire.
“Charlie is a seasoned professional with a unique depth and breadth of experience in international finance and publicly traded companies that will help lead Red Hat’s next phase of growth,” Szulik said.
Peters has worked with Price Waterhouse, GenRad and Boston Edison.
“Red Hat and open source will continue to make a global impact on how enterprises consume software,” Peters said. “This is an outstanding opportunity. I am pleased to be part of the Red Hat management team and look forward to helping to lead the organization in realizing its market potential.”
In an SEC filing, Red Hat said Peters would receive an initial salary of $275,000 per year with a “target bonus” of $200,000 a year plus a relocation bonus of “at least $50,000”.
Peters also received an incentive stock option to purchase 32,624 shares at a price of .0001 cents per share plus additional options of 317,376 shares at $12.26. Twenty-five percent of the shares vest after his first year of employment. He also can receive an additional 140,000 shares on an annual basis.
Red Hat: www.redhat.com