It's been a year of shake-ups for orthopedic device company Wright Medical Group ($WMGI), which has announced that another executive is leaving. Lisa Michels, VP and chief compliance officer (CCO) has resigned, effective immediately. But unlike some of the other execs who have left this year "without good reason," Michels is eligible for severance benefits. A committee has named John Knighton, director of compliance since last year, as interim CCO, according to an SEC filing.
Wright Medical has been under the federal microscope for a while; it agreed last September to pay $7.9 million to settle a probe. The feds alleged the company had conspired to violate anti-kickback laws by paying consulting fees to convince orthopedic surgeons to use certain Wright products from 2002 through 2007. As part of the settlement, the U.S. Attorney in New Jersey agreed to defer criminal prosecution for 12 months as long as the company met certain obligations.
However, back in May, the company announced the receipt of a letter from the U.S. Attorney stating the company "has knowingly and willfully committed at least two breaches of material provisions" of a deferred prosecution agreement. At the same time, the company reported that Raymond Kolls, senior VP, general counsel and secretary; Cary Hagan, senior VP, EMEA commercial operations; and Alicia Napoli, VP, clinical & regulatory affairs, were no longer with the company. They were replaced by Thomas McAllister, Aurelio Sahagun and Max Mortensen, respectively.
A month before that, the company announced that both CEO Gary Henley and CTO Frank Bono were no longer with the company. Henley tendered his resignation prior to a board meeting held to address management's oversight of Wright's ongoing compliance program. The board accepted his resignation, but because the company has determined it is without "good reason" under the terms of his employment agreement, he will not receive a severance package.
- see the SEC filing