DENTAL PROBLEMS: Two top executives who helped move a big public company to North Carolina face questions over stock incentives.

• Author: Reed, Ted
• Position: NCTREND: Corporate governance

Dentsply Sirona moved its main U.S. hub to Charlotte in 2018 and 2019 from York, Pennsylvania, adding to the large public companies based in the Queen City. Plans called for adding more than 300 jobs, aided by $4 million in state incentives.

But recent news about the world's biggest dental equipment supplier, with $4.2 billion in annual revenue, has been about as satisfying as a toothache.

On April 11, Chief Financial Officer Jorge Gomez left Dentsply for a similar post at biotech company Moderna. In a prepared statement, CEO Don Casey praised Gomez for "his many contributions."

Eight days later, Dentsply said Casey was also departing. No other information was shared. His interim successor was John Groetelaars, an industry veteran who had joined the company's board in early April.

Then, on May 10, the company shared a Securities and Exchange Commission filing that said an internal committee was investigating if unnamed current and former senior managers improperly directed incentives be paid to distributors to stimulate sales. Dentsply also released unaudited first-quarter results that disappointed investors, with profit declining 44% and sales decreasing 6% from a year earlier.

Final audited results, which could change based on the investigation, are scheduled to be released in August.

News of the probe prompted Gomez's quick removal at Moderna. At a May 11 meeting, "the board made the determination that it was appropriate to separate Mr. Gomez from Moderna," a company spokesperson told EndPoint News, a biotech industry newsletter.

Dentsply officials won't comment. Efforts to reach Gomez and Casey were unsuccessful. During a May earnings call with analysts, Groetelaars said the investigation is studying "the use of incentives with dealers, and the implications of those incentives" during the last half of 2021.

Meanwhile, a series of shareholder lawsuits suggest Casey and Gomez were motivated by incentive compensation plans. Such lawsuits are common in cases where corporate probes trigger share price declines.

On April 18, the day that Casey departed, Dentsply shares tumbled 13%, from $48.55 to $42.05, on April 18. On May 10, the date of the SEC filing, shares declined 7% to $36.25. The stock was trading for $35 in late July, having traded between $34 and $67 over the last year.

In a prepared statement, the law firm representing the city of Miami's retirement fund notes Casey and Gomez were eligible for "significant cash- and stock-based...