Dive Brief:
- Moderna said it has the right to recoup and terminate payments to its ex-CFO Jorge Gomez if it determines Gomez engaged in any wrongdoing or is required to pay a fine as a result of any investigation by his previous employer Dentsply Sirona or the Securities and Exchange Commission (SEC), according to an SEC filing made Friday by Moderna.
- The disclosure amends an earlier filing made Wednesday that stated the departed Gomez would be provided 12 months salary totaling $700,000 and COBRA coverage for 12 months.
- It appears Moderna “took swift and decisive action in removing [Gomez] from the position and subsequently, when they analyzed it and more information came to light, filed the amendment,” after determining they may be entitled to claw back the money, said Peter Glennon, a business and employment litigator with the Glennon Law Firm, who focuses on executive and professional employment agreements.
Dive Insight:
After just one day on the job, Moderna’s then brand new finance chief Jorge Gomez left the Cambridge, Mass.-based COVID-19 vaccine maker on May 10, the same day his former employer, Dentsply Sirona, publicly disclosed an ongoing internal investigation into certain matters, including financial reporting, at the manufacturer of dental techologies and products.
Because Gomez has only been with the company for such a short period, Moderna’s entitlement to a clawback would likely be related to a breach of an employment agreement rather than a violation of financial rules at the company, according to Glennon, who is not involved in the matter. For example, a company might be entitled to recoup money from a new executive who did not represent himself accurately or who puts the company in a bad light, he said.
A Moderna spokesperson declined to comment on the Friday filing and whether it was conducting its own investigation.
But the spokesperson provided an emailed statement that detailed its response to the matter to date. Moderna said it not aware of the ongoing probe at Dentsply until it was publicly disclosed by the manufacturer of dental products and technologies on May 10. It also stated that the company exercised appropriate due diligence prior to hiring Gomez based on “available information” and noted that Dentsply’s statements when Gomez left that company were “consistent with the departure of an employee leaving in good standing, as were diligence checks with former employers and individuals who knew him well.”
Moderna also described the pace of its response. Moderna’s chief legal officer, CEO and chairman of the board met with external counsel within one hour of learning of the matter on May 10 and then decided “it was appropriate to separate Mr. Gomez from Moderna." The company then informed Gomez of the decision and issued a press release announcing his exit before the market opened on May 11. "The May 11, 2022 announcement and departure of Jorge Gomez from Moderna strongly reflects the seriousness with which Moderna takes corporate governance,” the statement said.
Last week Dentsply disclosed the company’s audit and finance committee began an internal investigation into allegations of certain financial reporting matters submitted by current and former employees. The probe is focused on the company’s use of incentives to sell products to distributors and is also looking into allegations that certain former and current members of senior management directed the company’s use of the incentives and other actions to achieve executive compensation targets last year.
