A number of executives in the cannabis industry are among the highest-compensated CEOs in Canada, according to a new analysis of 2019 pay by the Ottawa think tank Centre for Policy Alternatives.
Executive compensation in the marijuana industry has attracted scrutiny of late as some of the largest producers have lost billions of dollars and shed thousands of jobs.
The Centre for Policy Alternatives’ report, “The Golden Cushion: CEO compensation in Canada,” by senior economist David Macdonald analyzed Canada’s 100 highest-compensated CEOs across all industries for 2019.
Macdonald found the ratio of average CEO compensation to average worker compensation in 2019 was 202-to-1.
Aphria CEO Irwin Simon’s total compensation of 18.4 million Canadian dollars ($14.2 million) in 2019 made him the highest-paid cannabis executive in Canada that year, according to Macdonald’s list.
Overall, Simon was the seventh-highest-paid executive.
Share-based awards (CA$12 million) accounted for most of the compensation, followed by nonequity incentives (CA$3.9 million) and salary (CA$2.6 million).
It is the second year in a row Simon has appeared on the top-100 list. His 2018 compensation amounted to CA$9.5 million.
Aphria, based in Leamington, Ontario, didn’t respond to a request for comment from Marijuana Business Daily.
Other cannabis industry executives on the 2019 list include:
- Michael Gorenstein, former CEO of Toronto-based Cronos Group (CA$15 million).
- Bruce Linton, former CEO of Smiths Falls, Ontario-headquartered Canopy Growth Corp. (CA$9.3 million).
- Sebastien St. Louis, CEO of Kanata, Ontario-based Hexo Corp. (CA$8.5 million).
None of the businesses reported a profit for fiscal 2019.
In 2020, some of the companies received a government-backed wage subsidy designed for Canadian employers that experienced a drop in revenue because of the COVID-19 pandemic.
Canopy and Aphria tapped Canada’s Emergency Wage Subsidy (CEWS) in 2020, according to the CEWS Registry, while Alberta-headquartered Aurora Cannabis has applied but has yet to receive funding.
Hexo and Cronos were not listed on the CEWS portal.
“Aurora fulfilled all application criteria in accordance with set guidelines and at such time we receive funding we commit to applying the funds to maintaining our business operations in Canada and the continued employment of Canadians,” Aurora said in a statement to Marijuana Business Daily.
Jennifer White, Canopy’s director of corporate communications, said the company met the requirements for CEWS because of a decline in revenue.
Canopy’s quarterly net revenue declined from CA$123.8 million in the period ended Dec. 31, 2019 to CA$107.9 million for the quarter ended March 31, 2020.
White said Canopy did not make any claims beyond July 2020.
Cannabis producer Aphria is also found in the CEWS registry.
Aphria’s net revenue was CA$120.6 million for the quarter ended Nov. 30, 2019, rising in subsequent quarters to CA$144 million and CA$152.2 million before dipping to $145.7 million for the quarter ended Aug. 31, 2020.
Other cannabis firms not on Macdonald’s list have garnered attention for generous executive compensation.
Aurora Cannabis executives, for example, saw hefty bonuses and raises in 2020, even though the company reported a loss exceeding CA$3 billion and laid off more than 1,000 employees – some days before Christmas.
Also not on Macdonald’s list is Canopy’s David Klein, whose compensation amounted to CA$45 million for fiscal 2020, which covered approximately his first three months as CEO. That included salary, bonus, stock options and other compensation.
Klein’s compensation was 1,042 times more than the cannabis producer’s median pay for its employees, according to the company’s annual proxy statement.
Matt Lamers is Marijuana Business Daily’s international editor, based near Toronto. He can be reached at [email protected].