Bedford Consulting Group published the first-ever report of Executive and Board compensation in the North American Cannabis industry. The report analyzes nearly 100 Cannabis industry companies and includes information about the compensation for 449 Board Members and 437 Cannabis industry executives based on data from 2019.
The data says that the market cap of the company–under $100 million for the lowest category and over $1 billion for the highest–usually determines how much compensation is received. In general, the higher the market cap, the higher the compensation.
The report separates the data for each different role: the Board of Directors, CEO, CFO, and COO.
Compensation packages for board members can include retainer fees, meeting attendance fees, and equity-related compensation. Totals for annual compensation range from around $26,000 per year at the low end, all the way up to $355,000 at the high end.
All of the fees seem to add up. Over 60% of companies pay their directors an annual retainer fee that could be as much as $150,000 each, which is what Canopy Growth is paying, according to Bedford. On top of that, 20% of companies pay “Meeting Attendance Fees” each time a Director shows up to a meeting, usually an average of $1500 each time.
Just under half of the companies also paid equity-based compensation, which often makes up the majority of the cash that Directors receive. Former-PM Brian Mulroney made $13,913,873 from his place on the Acreage Holdings, Inc. board of directors, which was the highest overall.
As an Executive Director or Chairman of the Board, the paycheques get even bigger. Over 85% of companies paid a retainer fee ranging anywhere between $10,000 at the lowest, to $244,000 at the highest. Total compensation for this role ends up ranging from $44,000 to $332,000 on average, however, Todd R. Patrick, of Sunniva, Inc., collected over $1.8 million, most of it in equity-based compensation.
For executives of cannabis companies, their total compensation comes from their base salary, annual bonuses, equity-based compensation, and pension and other benefits. On average, CEOs make much more than CFOs or COOs, their total compensation ranging from around $200,000 to $1.7 million. Not only that, but CEOs can receive a bonus of anywhere from 5% to 200% of their yearly salary for reaching their targets. Tilray’s Brendan Kennedy received the most compensation of any CEO, making just over $31.8 million in 2019, mostly from equity compensation.
In terms of other executives, COOs and CFOs make anywhere from $100,000 to $430,000 per year total with similar compensation packages.
The complete report is available on Bedford Consulting Group’s website.
Can they Afford it?
Six-figure compensation packages tend to stack up, adding up to millions of dollars in board and executive compensation alone. With many major players reporting massive losses last year, can they afford it?
When looking at the numbers, it’s easy to ask yourself if Kennedy’s $31.8 million paycheque could have made a difference by being reallocated elsewhere, or if Canopy Growth could have avoided part of their $1.3 billion loss by paying Directors the average retainer fee of around $60,000 instead of $150,000.
Kennedy’s, Patrick’s, and Mulroney’s paydays, all in the millions, were almost entirely accrued from equity compensation, which the majority of companies pay out to their board and executives. Judging by the data, major players in the cannabis industry might have to crunch some numbers and decide if million-dollar compensation packages are worth it in the long run.