The departure of Moderna’s CFO revives the debate on corporate culture

Moderna has become a $50 billion success story by developing a Covid-19 vaccine at an unprecedented rate. But biotech may have broken a less illustrious speed record this week by firing its chief financial officer after just one day on the job.

The Boston-based biotech said Jorge Gomez was leaving the company following the disclosure of an investigation into his former employer, dental equipment maker Dentsply Sirona, which it said was linked to health issues. financial information.

Gomez’s sudden departure, just a month after being announced as a new hire, marks the latest in a string of executive departures at Moderna – a company that has grown at breakneck speed during the pandemic thanks to its vaccine Very effective covid.

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

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

A former Moderna executive, who spoke to the FT on condition of anonymity, said the corporate culture was defined by chief executive Stephane Bancel, who was driven by success and could ruthlessly criticize people which did not meet his expectations.

“I think this episode gives us a rare insight into a company that has always had a problematic culture and needs to use it for self-learning in order to become a truly successful company.”

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

Critics warn that Moderna’s board’s failure to spot potential problems at Dentsply during due diligence on Gomez — a process routinely undertaken for all new C-suite hires — points to weaknesses in systems of corporate governance.

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

“The diligence that Moderna would have put in place should have understood that,” she said. “Any board would want to do their due diligence to make sure they have someone who is both the right person, 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. He identified Moderna’s exit payment of $700,000 — a one-year salary — to Gomez as a mistake in the design of its executive compensation package.

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

On Friday, Moderna said it would claw back the salary payment if wrongdoing is found.

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

“At its meeting, the board decided that it was appropriate to separate Mr. Gomez from Moderna. Mr. Gomez was immediately informed of this decision,” Moderna said.

Some current and former Moderna investors have told the FT that the company has shown resolve in moving so quickly to remove Gomez.

Moderna first announced that Gomez would join the company as chief financial officer on April 11 in a statement, which praised him as an “asset” to the team. On April 19, Dentsply fired its chief executive Don Casey without specifying the reason. Gomez and Casey did not immediately respond to requests for comment.

Gomez started working at Moderna on May 9 and left on May 10 when Dentsply announced it had launched an investigation in March into allegations that former senior executives ordered the use of inducements. to achieve executive compensation targets in 2021.

Moderna released an official statement on Gomez’s departure on Wednesday the 11th.

“It wasn’t a setback, to me, it was actually an example where the company made a decision very quickly,” said Julia Angeles, chief investment officer at Baillie Gifford, one of Moderna’s early investors. which owns 11.3% of the shares of the company. .

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

“The clear signal is that they want people they can trust 110%. . . for me it was a manifestation of the values ​​they [Moderna management] have and that they cannot waste time with small errors.

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.

“Whoever is the research company that helped with this – I assume they used one – is the one that really has an egg on its face. You never want to create a negative headline for a client,” a he declared.

Moderna declined to say whether it used a staffing firm in the matter.

“The sad truth is that executive searches are often poorly executed and succession planning beyond the CEO is given little or no consideration,” said Shawn Cole, founding partner and chairman of Cowen Partners. , an executive search firm.

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

Most analysts said the loss of Gomez was a temporary setback rather than a blow to the company, as former Moderna chief financial officer David Meline agreed to stay on on an interim basis while new research is conducted. More concerning was the rapid turnover of senior executives at a time when the company needed to deliver on its promise to use messenger RNA technology to revolutionize medicine, they said.

Moderna said it is dedicated to advancing mRNA science and continues to attract top talent. “Our commitment to a science-driven and innovative culture is well recognized; we consistently rank as one of the best places to work and one of the best employers,” the company said.