Canadian cannabis producer Cronos Group paid CEO Kurt Schmidt more than $10 million (12.2 million Canadian dollars) in salary and other compensation in 2020, according to the Toronto-based company’s recently disclosed proxy circular, even as the operation continued to lose money.
Schmidt’s compensation reflects a salary and bonus that covers only the part of the year he was chief executive in 2020 – roughly four months – between early September through December.
The 64-year-old executive’s total pay was 217 times more than the median compensation for the cannabis producer’s other employees that year, the regulatory filing states.
Executive compensation is a growing area of interest in the cannabis industry, which has seen executive pay at certain large Canadian companies skyrocket – even for publicly traded businesses reporting significant losses.
For instance, Smiths Falls, Ontario-based Canopy Growth paid CEO David Klein about $33.8 million, including salary, bonus, stock options and other compensation, for his first three months with the company last year. Canopy reported a CA$1.3 billion loss in the same period.
Executives at rival producer Aurora Cannabis, meanwhile, were rewarded with millions in bonuses and raises last year, despite mass layoffs and a loss exceeding $3.3 billion.
Cronos appointed Schmidt as CEO in September 2020, succeeding Mike Gorenstein.
Cronos reported an operating loss of $58.4 million and a net loss of $111.2 million in Schmidt’s first full quarter at the helm, from October through December 2020, in addition to adjusted EBITDA of negative $53.1 million.
However, Cronos exceeded analyst expectations on sales, with net revenue of $17 million.
For the company’s January-March 2021 quarter, Cronos experienced another net loss of $161 million and adjusted EBITDA of minus $37.1 million.
Schmidt’s 2020 compensation consisted of:
- A salary of $520,000, prorated for the number of days worked ($146,000).
- Stock awards worth $2.38 million.
- Option awards worth $7.35 million.
- Incentive plan compensation of $243,616.
Schmidt’s employment agreement comes with severance package consisting of:
- A lump sum equal to his annual base salary of $520,000.
- Benefits for up to a year after termination.
- A prorated annual bonus for the year of termination.
Schmidt’s employment agreement also comes with a mutual nondisparagement provision and noncompetition clause after his termination.
Before joining Cronos, Schmidt was CEO of pet food provider Blue Buffalo Co. from 2012 through 2016. In 2017, he served as senior adviser to Blue Buffalo.
The Cronos proxy does not say what Schmidt did between 2017 and 2020.
Schmidt currently serves on the board of Campbell Soup Co.
The company trades as CRON on the Toronto Stock Exchange and the Nasdaq.
Matt Lamers is Marijuana Business Daily’s international editor, based near Toronto. He can be reached at email@example.com.