Moderna CFO’s departure reignites debate over company’s culture

Moderna became a $50 billion success story by developing a Covid-19 vaccine at an unprecedented pace. But the biotech may have broken a less illustrious speed record this week when it fired its chief financial officer after just a day on the job.

The Boston-based biotech said Jorge Gomez would leave the company after revealing an investigation at his former employer, dental equipment manufacturer Dentsply Sirona, which it said was linked to financial reporting issues.

Gomez’s sudden departure just a month after he was announced as a new hire marks the latest in a series of executive departures at Moderna – a company that has grown at breakneck speed during the pandemic as a result of its highly effective Covid vaccine. .

In December, Moderna fired chief commercial officer Corinne Le Goff, after less than a year of service. This followed the departures of chief medical officer Tal Zaks last year and former chief financial officer Lorence Kim in 2020.

The sequence of executive departures and the way Gomez left has reignited debate over the culture and governance at Moderna, which has previously denied claims by former employees that it oversees a “corrosive” work environment.

A former Moderna executive, who spoke to the FT on condition of anonymity, said the company culture was defined by CEO Stéphane Bancel, who was driven by success and could be relentlessly critical of people who fell short of his expectations.

“I think this episode gives us a rare glimpse of a company that has historically had a problematic culture and needs to use this for self-learning to become a truly successful company.”

Moderna said that in 2019 the company had evolved from an R&D organization to one that had a commercial product by 2020. statement.

Critics warn that the inability of Moderna’s board of directors to detect potential issues at Dentsply during due diligence on Gomez — a process commonly performed on all new C-suites hires — points to weaknesses in corporate governance systems.

Cindy Schipani, a corporate law professor and corporate governance expert at the University of Michigan, said there was a lack of governance.

“The dedication Moderna would have delivered should have caught this,” she said. “Every board would want to do due diligence to ensure they get an individual who has both the right fit, high ethical standards and high competence,” she said.

ValueEdge Advisors, a firm that advises investors on corporate governance, said the episode represented an “outrageous” failure of governance. It pointed to Moderna’s payout of $700,000 — an annual salary — to Gomez as a flaw in the design of its executive compensation package.

Moderna rejects this criticism. The company told the Financial Times that Dentsply’s statement regarding Gomez’s departure was consistent with the departure of an employee in good standing, and due diligence checks on former employers and individuals revealed no issues.

On Friday, Moderna said it would recover the salary payment if any findings of misconduct were made.

Moderna said it first learned of the investigation on May 10, and within an hour the chief executive, chairman and chief legal officer had met and arranged a special board meeting for the same day to discuss the matter.

“During the meeting, the Board of Directors decided that it was appropriate to separate Mr. Gomez from Moderna. Mr. Gomez was immediately notified of that decision,” Moderna said.

Some current and former investors in Moderna told the FT that the company had shown decisiveness in acting so quickly to remove Gomez.

Moderna first announced that Gomez would join the company on April 11 as CFO in a statement, praising him as an “accompaniment” to the team. On April 19, Dentsply fired its CEO Don Casey without reason. Both Gomez and Casey did not immediately respond to requests for comment.

Gomez joined Moderna on May 9 and left on May 10 when Dentsply announced it had launched an investigation in March into allegations that former senior management had directed the use of incentives to meet executive compensation targets by 2021. .

Moderna issued a formal statement on Wednesday 11 regarding Gomez’s departure.

“It wasn’t a problem for me, it was actually an example where the company made a decision very quickly,” said Julia Angeles, investment manager at Baillie Gifford, an early investor in Moderna, which owns 11.3 percent of the company’s stock. . †

She said Moderna’s management couldn’t have done anything else because they had no idea about the Dentsply investigation.

“The clear signal is that they want people they can trust 110 percent. † † for me it was a manifestation of the values ​​they [Moderna management] and that they cannot waste time on small mistakes.”

Brad Loncar, a biotech investor who doesn’t own Moderna stock, said it was “bad luck” rather than a sign of a bigger problem at Moderna.

“Who the search firm that helped with this – I assume they used one – is who really has an egg on their face. You never want to create a negative headline for a customer,” he said.

Moderna declined to comment on whether it had used a search agency in this case.

“The sad truth is that executive searches are often poorly executed and little to no attention is paid to succession planning outside of the CEO,” said Shawn Cole, founder and president of Cowen Partners, an executive search firm.

He said more C-suite-level due diligence was often needed because the risks of failure were too great. “We treat reference checks like the FBI,” he said.

Most analysts said Gomez’s loss was a temporary setback rather than a major blow to the company, as Moderna’s former CFO David Meline has agreed to remain on an interim basis while a new search is underway. Of more concern was the rapid turnover of senior executives at a time when the company had to deliver on its promises to use messenger RNA technology to revolutionize medicine, they said.

Moderna said it was committed to advancing mRNA science and continued to attract top talent. “Our commitment to a science-driven and innovative culture is widely recognized; we are routinely considered one of the best places to work and a top employer,” the company said.

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