Despite stagnant revenue, layoffs, facility closures and major losses, top executives at some of Canada’s largest cannabis companies were awarded millions in bonuses and performance stock grants on top of their sizable salaries in their most recent fiscal years, Company filings show.
Canopy Growth Corp., Tilray Inc. (formerly Aphria Inc.) and Aurora Cannabis Inc. The U.S. salary decisions show that companies are rewarding executives for bridging cash losses and surviving in Canada’s weed industry.
Canopy Growth Chief Executive Officer David Klein received a cash bonus of US$1.72 million in addition to his base salary of US$975,000 for the fiscal year ending March 31, even as the company declined during that time period. The net loss increased to $1.7 billion. The result of restructuring fees and the cost of closing and selling many cannabis production facilities across the country.
Canopy’s proxy statement for fiscal year 2021 shows that 50 percent of Mr Klein’s bonus was based on a free cash flow target – a loss of no more than US$850 million. Partly because Canopy reported a small cash loss – negative US$478 million – he deemed Mr. Klein worthy of 140 percent of his target, even though Canopy missed targets on other measures of revenue and profit.
The Smiths Falls, Ont.-based company, which is still one of the top two largest cannabis producers in the country, saw its quarterly revenue increase between March and December, 2020, but revenue declined for two consecutive quarters since then Is.
Mr. Klein’s net salary was US$2.79 million, significantly lower than the previous year, which included the initial grant of Canopy stock options worth US$24.8 million to the company. Mr. Klein became CEO in January 2020.
Mr. Klein declined a request for an interview to discuss his compensation. A statement from company spokesman Niklaus Schwenker said its executive compensation supports the company’s strategy of “attracting and retaining top talent” and is essential to Canopy’s “ambitious growth plans.” At the company’s annual meeting last month, 97.5 percent of shareholders voted to approve the company’s approach to executive compensation.
Tilray CEO Irwin Simon, who served as Aphria’s CEO, received a US$10 million cash bonus for agreeing to become CEO of the combined company when the two merged in late April this year. Mr. Simon also received a performance bonus of US$3.19-million on top of a basic salary of US$1.7 million for the fiscal year ended 31 May. Mr Simon earned US$13.68 million in the first five months of 2021, the period in which Tilray disclosed Mr Simon’s compensation.
Mr. Simon earned $18.63 million in Aphria for the year ended May 31, 2020, including $10.9 million in cash and stock paid when he was transferred from the role of Executive Chairman in January, 2020.
Tilray also began a cost-cutting exercise after the merger with Aphria, closing two major facilities in British Columbia and Ontario. But the company’s revenue has grown more than 20 percent in the two quarters since the merger, and relative to its peers, only reported a net loss of US$34.6 million for the three months ended August 31.
Mr Simon told The Granthshala in a recent interview that he was proud of how he changed Aphria since he was appointed the company’s president after December 2019, the short seller’s report said, adding to the company’s stock. tanked. “You can go out there and criticize my compensation. But much of it is performance based and you saw the state of Aphria years ago, and where it is today,” he said.
Edmonton-based Aurora recently announced that 8 percent of its workforce would be laid off as a result of the closure of several facilities. Its revenue declined for three consecutive quarters between September 30, 2020 and June 30, 2021, while the loss for the year ending June 30 came in at nearly $700 million.
Aurora honored its CEO Miguel Martín, who joined the company in September, 2020, with a basic salary of $670,689 plus a bonus of $365,579 for the fiscal year ended June 30. Mr. Martin’s net salary was $4.35-million, including $2.2-million. In stock awards.
Aurora used revenue, cash flow, profit and employee-satisfaction measures as targets, which the company projected to lose money. The company capped the bonus-performance calculation at 50 percent, saying “overall performance was not meeting expectations.” However, the bonuses of the three officers were then added as “discretionary” amounts totaling more than $100,000, including $60,930 for Mr. Martin.
Aurora paid director Michael Singer $4.72 million, including $3.56 million in stock prizes. Mr Singer served as interim CEO for seven months until September 2020, and as executive chairman until May, when Arora decided to appoint an independent chairman of the board. The company gave Singer $600,000 in severance and a “retention award” worth $1.5 million in stock awards, explaining that Singer agreed to waive the portion of his employment agreement that allowed him to receive previous stock awards. and possibly to sell. that he was not yet entitled.
Aurora declined The Granthshala’s request for an interview with Mr Martin and instead referred to its proxy statement for clarification of its compensation policy.
During their respective fiscal years, Canopy stock outperformed Aurora and the S&P/TSX Composite Index, but underperformed the Horizons Marijuana Life Sciences Index ETF. Tilray/Aphria easily outperformed two cannabis peers, HMMJ and Composite. Aurora Cannabis underperformed its peers, HMMJ and Composite.
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