Friday, October 15, 2021

Moderna shells out for CEO security as its COVID-19 vaccine grabs the spotlight

Moderna stepped onto the world stage last year when they pivoted the company’s mRNA research to target COVID-19, scaled-up manufacturing, staffed up a sales and marketing team and then launched a highly effective shot. 

Under that spotlight, CEO Stéphane Bancel and his team needed backup, Moderna decided. And the company brought in a security team to do just that.

In its annual proxy filing, the company disclosed that it shelled out more than $1 million on security for Bancel last year and spent smaller amounts on security services for other Moderna executives.

“In response to the increased profile of our company and our executives as we pursued the development of a vaccine against COVID-19, in 2020 the company authorized the provision of personal and home security services to certain” executives, the proxy filing says. 

Moderna’s profile has indisputably been elevated during the pandemic. The mRNA biotech had no authorized products and no sales at the start of 2020, and thanks to its success in developing an mRNA coronavirus shot, the company will never look the same again. 

In fact, it could join the ranks of the world’s top vaccine players this year, Bancel has said.

RELATED: Moderna could join top vaccine players by sales this year, CEO says 

Moderna didn’t go into details about its exec security plan, but in an interview, Matt Dumpert, associate managing director in Kroll’s Security Risk Management practice, said companies often start to think hard about their security protocols when they develop valuable intellectual property or when execs gain an elevated public profile.

Security programs can range from small intelligence-gathering efforts to around-the-clock protection at the office, at home, and even on vacation, he said. Advanced programs feature private aircraft, medically trained security forces and experts trained at detecting surveillance. 

For the biotech industry, protecting execs from physical threats, plus protecting intellectual property and defending against “commercial espionage” are top priorities, Dumpert said. Cybersecurity “runs in parallel” with those efforts, he said, noting that hackers are becoming “more and more sophisticated.”

As for Moderna’s $1 million in security spending, that’s “not a tremendous amount of money” in the exec security world, Dumpert said, especially when dedicated staff are on board detecting and responding to potential threats around the clock. 

RELATED: The 22 most influential people in the fight against COVID-19 — Stéphane Bancel  

For personal and home security services, Moderna spent just over $1 million on Bancel, plus $143,719 for R&D chief Tal Zaks, who has since said he will leave the company. Two other executives also received protection in the low five-figure range.

“The company began to provide such services to address increased security concerns as we pursued the development of a COVID-19 vaccine during 2020,” the proxy stated.

As for other large biotech players, exec security expenditures appear sporadically in SEC filings. Vertex, Biogen and Alexion don’t disclose security as a portion of executive pay, while Regeneron discusses its plan at length.  

Regeneron’s board in 2015 approved the company’s security policy, which calls for CEO Len Schleifer and CSO George Yancopoulos to use company-provided aircraft “as much as practicable” for business and personal use, Regeneron said in its 2020 proxy. The policy was the result of a “recommendation of an independent, third-party security study,” Regeneron said in the filing. 

Regeneron’s policy also covers car transportation and residential security at Schleifer and Yancopoulos’ primary homes.  

As for Amgen, the company says CEO Robert Bradway is encouraged to travel via company plane because the “safety, security, accessibility, and efficiency” benefits outweigh incremental costs.

In Big Pharma proxy filings, private aircraft, car service and home security are common.

Bancel’s $1 million security expenditure came as part of the CEO’s nearly $13 million overall pay package for last year. After the company’s successful 2018 public offering, the helmsman collected a whopping $59 million pay package in what was biopharma’s highest CEO compensation figure for the year. 

But the company has never been in the public sphere as much as it is now. Amid its COVID-19 vaccine launch, Moderna is working to produce at least 700 million doses this year—and up to 1 billion doses. The company expects revenues of $11 billion or more from the shot this year. 

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