Canopy Growth CEO’s partial-year compensation tops CA$45 million

David Klein

Canopy Growth’s chief executive earned 1,042 times more than the median compensation for the cannabis producer’s other employees in fiscal 2020.

The partial-year compensation for CEO David Klein was about $33.8 million (CA$45 million), including salary, bonus, stock options and other compensation, the Smiths Falls, Ontario-based company disclosed in its proxy statement released after the fiscal year ended March 31.

That likely puts Klein – who began his job in mid-January – among the top CEO earners in Canada across all industries.

It also makes him the highest-paid cannabis CEO for a single fiscal year of compensation in Canada, edging out Tilray CEO Brendan Kennedy’s 2018 total compensation of CA$42.6 million. 

Klein’s disclosed compensation also reflects a salary and bonus that cover only the portion of the fiscal year he was CEO – roughly 2½ months – between mid-January and March.

Canopy’s median employee earned CA$43,000 – or slightly more than the company’s planned contribution to Klein’s retirement plan, per his disclosed offer of full-time employment with the U.S. Securities and Exchange Commission.

David Macdonald, senior economist at the Canadian Centre for Policy Alternatives in Ottawa, said Klein’s compensation is quite high, “even within the rarified world of CEOs in Canada.”

“In that sense, it exemplifies the issue with CEO pay, which is that the explosion in CEO pay is due to the bonus side, not the salary side per se,” Macdonald said.

“And while the bonuses are hypothetically connected to stock price, in the real world, they have little relation to the stock price.”

Pay is equitable, Canopy says

Jordan Sinclair, Canopy’s vice president of communications, said Klein’s compensation is fair for Canopy.

“The Cannabis industry is heavily regulated industry. It’s in growth mode. It’s also under the spotlight. That dynamic requires a mix of strategy and creativity from its leadership and people with that skill set mix deserve to be paid very well,” Sinclair wrote in an email to Marijuana Business Daily, adding that “David’s (compensation) is very closely aligned with shareholders’ interests.”

“Both the board and our executive team look at compensation very carefully to ensure we’re attracting and retaining the best talent, this applies to all positions including the CEO job.”

Sinclair said Canopy has not asked any workers to accept reduced pay during the COVID-19 crisis, “and our retail and ops teams received an increase in pay to acknowledge the fact that it took extra dedication to come into work at the height of the pandemic.”

Klein has a big job ahead of him.

He inherited a company that lost CA$1.39 billion in fiscal year 2020.

Klein moved decisively after taking the helm at Canopy in mid-January, announcing a new vision for the company, closing some facilities and eliminating more than 800 jobs.

Canopy is paying Klein significantly more than his predecessors in terms of salary and total compensation.

Klein’s total compensation is about four times higher than former CEO Bruce Linton’s in 2019 (CA$9.3 million) – the same year he was fired.

Total compensation for Canopy’s eight named executive officers was CA$68 million in the fiscal year.

That is higher than Canopy’s stated employee compensation of CA$41 million as of June 30, according to the latest financial statement. The company reported revenue of CA$110.4 million for the quarter ended June 30 on a loss of CA$128 million.

How the ‘CEO world works’

“Canopy’s stock in 2020 has been relatively flat with coronavirus and down substantially from where it stood in 2018 and 2019, so you might conclude from that that executives are paid less,” Macdonald said. “But they really aren’t, as with other companies.”

“This is the way the CEO world works. It’s disconnected from regular workers and the company.”

Norton Singhavon, founder and CEO of GTEC Cannabis in Vancouver, British Columbia, noted that many Canadian cannabis companies have not delivered for their investors in recent years, resulting in significant losses.

“Accordingly, I do not see any reasonable justification at this stage for multimillion-dollar salaries within the sector,” he said.

Klein’s fiscal 2020 compensation (in U.S. dollars) consisted of:

  • A partial-year salary of $210,000.
  • A partial bonus of $304,688.
  • Stock awards worth $7.5 million.
  • Option awards worth $24.8 million (the value on the date the option is granted).
  • “Other compensation” worth $949,135.

Canopy’s shares trade as CGC on the New York Stock Exchange and WEED on the Toronto Stock Exchange.

10 comments on “Canopy Growth CEO’s partial-year compensation tops CA$45 million
  1. Tony Davis on

    That is insane, and egregious, and greedy. Who deserves that sort of money and who needs it. Hope to hell he donates to some good charities trying to save the planet like Sea Shepherd. I know an entire Caribbean reef where, if the organization had a fund set up for just $3 or 4 million, they could could continue to protect this significant patch of reef for an eternity. But they can not raise this money.

    Maybe this CEO can help. I mean, he gets a vast some of money in one year for managing a company that has lost vast sums of investor cash. Yes, he is new to it. But even if he turns it around, really, should any human get this kind of grotesque salary for coming up with a new, as yet untested plan, when Linton, also overpaid and over hyped, failed so miserably with his supposedly genius strategy.

    When I see this sort of corporate executive malfeasance and Trumpian mentality, I get out of that stock and look for one run by good human beings.

    So prove me wrong David Klein and help the Roatan Marine Park conservation group and do the planet and the oceans a small favor, compared to your mega-salary.

    Reply
  2. Diane Reilly on

    no wonder they’re so far in the ditch. These big companies continue to blow investors’ money.
    The small companies are the ones that make the real profits.

    Reply
  3. Erika Valentina Doria on

    Maybe these guys failed math class? Must have flunked Ethics??
    “The company reported revenue of CA$110.4 million for the quarter ended June 30 on a loss of CA$128 million.” And the white man’s “partial-year compensation… was about $33.8 million (CA$45 million) and the “Total compensation for Canopy’s eight named executive officers was CA$68 million in the fiscal year.” HELLO? No product was sold because no product was made- the money went straight to people’s bank accounts. God help these investors who fall for this.

    Reply
  4. Otto on

    HAHAHAHAHAHAAA

    You are all fools for believing this article.
    If you read the document about Klein’s compensation if explains everything!
    He gets nearly ZERO of that stock and option today!
    He salary and bonus is only a few hundred million!
    YOU ARE ALL FOOLS!!!!!!!!!!

    Reply
  5. Tom M. on

    I’m a -tiny- shareholder of this company. I made a small, speculative investment in CGC when it was riding high in February 2019 — I invested $375 when the stock was trading at around $46 per share.

    It is -absurd- to me that a company that has lost so much shareholder value and has failed to turn a profit, even after the absolute -gift- they got from the Ontario government deciding not to handle retail marijuana sales directly after all, would pay its top executive so much. CEO compensation has no basis in reality — no individual leader provides that much value to a company.

    CEOs should receive a minimal cash salary and be paid primarily in stock options!

    Reply
  6. J Burnside on

    Well if it’s any consolation, his stock options are the largest part of his compensation and Canopy stock is crap.

    Reply
  7. John Gill on

    This compensation is more like a ransom fee than reasonable job compensation – OBSCENE!
    Calls into question the quality, integrity, judgement, and reputation of the major stockholder.

    Reply

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