WageWorks said its financial earnings from 2016 and 2017 were inaccurate and "should also no longer be relied upon."
- Top executives are out at WageWorks, an employee benefits company, following an audit of the company's financials.
- CEO Joe Jackson will step down and take on the role of executive chairman. He's replaced as CEO by the current COO Edgar Montes.
- WageWork's CFO and corporate counsel have both resigned.
Two top executives including the head of finance have lost their jobs at the employee benefits company WageWorks following an internal investigation that found the company inflated some of its revenue and profit figures.
The board's audit committee estimates that WageWorks overstated the $364.7 million it reported in 2016 revenue by $6.5 million to $9.5 million, according to a public filing from the company on Thursday.
The company's 2017 figures are still under review.
WageWorks, which makes software to help companies administer their benefits programs, said the investigation "related to the accounting for a government contract during fiscal 2016 and associated issues with whether there was an open flow of information and appropriate tone at the top for an effective control environment."
On Thursday, WageWorks CEO Joe Jackson stepped down from his role. He will transition to the role of executive chairman.
Jackson is replaced by WageWorks president and chief operating officer Edgar Montes, who first joined the company in 2006. A replacement COO hasn't been announced.
WageWork's chief financial officer and its general counsel are resigning from the company.
Colm Callan, CFO, resigned on Thursday. Callan will stay in his role for 90 days "to effect a seamless transition" with his replacement.
Kimberly Wilford also resigned from her role as general counsel and corporate secretary of WageWorks. She'll similarly stay for 90 days.
WageWorks's first disclosed on March 2 that the company had "a material weakness in its internal control over financial reporting," which it said was related to "managing change and assessing risk in the areas of non-routine and complex transactions."
On Tuesday, the law firm Lieff Cabraser Heimann and Bernstein announced a class action against WageWorks on behalf of investors, related to its financial reporting.
The company will disclose more information about this material weakness, as well as a plan moving forward, in its upcoming 2017 10-K annual report. WageWorks said it hopes to file the report, which was delayed from March 1, "as soon as possible."