Moderna CFO’s departure reignites debate over company’s culture
Moderna became a $50bn 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 removed its chief financial officer after just a day in the job.
The Boston-based biotech said Jorge Gomez was leaving the company following the disclosure of an investigation at his former employer, the dental equipment maker Dentsply Sirona, which it said was linked to financial reporting issues.
The sudden departure of Gomez, 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 ousted chief commercial officer Corinne Le Goff after less than a year in the job. This followed the departures of Tal Zaks, chief medical officer, last year and former chief financial officer Lorence Kim in 2020.
The succession of executive exits and the manner of Gomez’s departure have reignited a debate about the culture and governance at Moderna, which has previously denied claims from former employees that it oversees a “caustic” work environment.
One former Moderna executive, who spoke to the Financial Times on condition of anonymity, said the corporate culture was defined by chief executive Stéphane Bancel, who was success driven and could be ruthlessly critical of people who did not meet 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 really successful company.”
Moderna said the company had evolved from an R&D organisation in 2019 into one that had a commercial product in 2020. “As such the expertise of our executive team has evolved to fit where we are today and where we are going,” it said in a statement.
Critics warn that the Moderna board of directors’ inability to detect potential problems at Dentsply during due diligence on Gomez — a process commonly undertaken on all new C-suite hires — points to weaknesses in corporate governance systems.
Cindy Schipani, professor of business law and an expert in corporate governance at the University of Michigan, said there was a failure of governance.
“The diligence that Moderna would have put in place should have caught this,” she said. “Any board would want to do due diligence to make sure that they’re getting a person that’s 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 pinpointed the exit payment by Moderna of $700,000 — a year’s salary — to Gomez as a mistake in the design of his executive pay package.
Moderna rejects this criticism. The company told the FT that Dentsply’s statement regarding the departure of Gomez was consistent with an employee leaving in good standing, and diligence checks with former employers and individuals did not raise any issues.
On Friday, Moderna said it would claw back the salary payment if any findings of wrongdoing were made.
Moderna said it first learnt of the investigation on May 10 and within an hour the chief executive, chair and chief legal officer had met and arranged a special board meeting for the same day to discuss the issue.
“Upon meeting, the board made the determination that it was appropriate to separate Mr Gomez from Moderna. Mr Gomez was immediately informed of that decision,” said Moderna.
Some current and former investors in Moderna told the FT the company had shown decisiveness by acting so swiftly to remove Gomez.
Moderna first announced Gomez was joining the company as CFO on April 11 in a statement, which lauded him as an “asset” to the team. On April 19 Dentsply sacked its chief executive Don Casey without specifying a reason. Both Gomez and Casey did not immediately respond to requests for comment.
Gomez began work at Moderna on May 9 and left on May 10 when Dentsply announced it had begun a probe in March into allegations that former members of senior management directed the use of incentives to achieve executive pay targets in 2021.
Moderna issued a formal statement on Gomez’s departure on Wednesday 11.
“It wasn’t a hiccup, 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 per cent of the company’s stock.
She said there was nothing Moderna management could have done differently because they had no idea about the Dentsply investigation.
“The clear signal is they want people they can trust 110 per cent . . . for me it was a manifestation of the values they [Moderna management] have and that they can’t waste time on any kind of small mistakes.”
Brad Loncar, a biotech investor who does not own Moderna shares, said it was “bad luck”, rather than a sign of any larger problem at Moderna.
“Whoever is the search firm that helped with this — I’m assuming they used one — is who really has egg on their face. You never want to create a negative headline for a client,” he said.
Moderna refused to comment on whether it had used a search firm in this case.
“The sad truth is that executive searches are often poorly executed and succession planning beyond the CEO is given little to no thought,” said Shawn Cole, founding partner and president of Cowen Partners, an executive search firm.
He said there often needed to be more due diligence at the C-suite level because the risks of failure were too high. “We treat reference checks like the FBI.”
Most analysts said the loss of Gomez was a temporary setback rather than a major blow to the company, as Moderna’s former CFO David Meline has agreed to stay on an interim basis while a new search is conducted. Of more concern was the speedy turnover of senior executives at a time when the company needed to deliver on its promises to use messenger RNA technology to revolutionise medicine, they said.
Moderna said it was dedicated to advancing mRNA science and continued to attract top talent. “Our commitment to a science-driven and innovative culture is well recognised; we routinely rank as one of the best places to work and a top employer.”