Executives for cannabis producer Canopy Growth received more than 4 million Canadian dollars ($3.2 million) in cash bonuses after making “solid progress in the year,” according to a regulatory filing, even as the company lost CA$1.7 billion and laid off hundreds of workers.
The Smiths Falls, Ontario-based company disclosed the executive compensation figures for fiscal year 2021 in a proxy statement sent ahead of its annual general meeting, scheduled for Sept. 14 via webcast.
The executives’ compensation packages consist of salary as well as bonuses awarded as part of the company’s short- and long-term incentive plans. For fiscal 2021, which ended March 31, the board approved short-term incentive plan bonuses totaling CA$4 million for five of the company’s top executives.
The company’s long-term incentive-plan (LTI) bonuses, typically granted annually in March, were awarded June 9, 2021. The LTI bonuses were not reported in the total compensation table because they were issued after the fiscal year ended.
“On a go forward basis, we have determined to fix the regular timing of our annual LTI grants to occur in June of each year, beginning in Fiscal 2022,” the proxy noted.
“As such, no LTI awards were granted in Fiscal 2021, with the prior LTI grants having been made in late March 2020 at the end of Fiscal 2020.”
In an emailed statement, a company spokesperson told MJBizDaily that “Canopy Growth’s executive compensation supports our strategy of attracting and retaining top talent that is necessary to support the company’s ambitious growth plans and is structured to ensure close alignment between the interest of shareholders and leadership.”
The company uses four performance measures related to corporate objectives to help guide short-term bonus payouts where executives earn an annual cash bonus.
Free cash flow has the heaviest weighting (50%) among the performance measures, followed by net revenue (20%), adjusted EBITDA (20%) and individualized objectives (10%).
The company failed to meet its fiscal 2021 goals for net revenue and adjusted EBITDA, but the goals for free cash flow and individualized objectives were achieved.
According to the proxy, Canopy aimed for net revenue of $455 million but came in at $414 million.
Free cash flow was negative $478 million, or half the shortfall the company anticipated.
Adjusted EBITDA, which serves as a measure of profitability, came in at negative $258 million, a slightly worse performance compared with the company’s objective of negative $246 million.
Canopy’s short-term cash bonuses amounted to:
- CA$2.2 million for David Klein, CEO.
- CA$579,000 for Mike Lee, chief financial officer.
- CA$659,000 for Rade Kovacevic, president and chief product officer.
- CA$360,000 for Julious Grant, chief commercial officer.
- CA$351,000 for Phil Shaer, chief legal officer.