CEOs of cannabis companies are among Canada’s highest-paid executives

Four cannabis-industry executives made the top 100. Leading the charge was Aphria Inc. CEO Irwin D. Simon

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In a report released last week by the Canadian Centre for Policy Alternatives, economist David Macdonald lists the 100 top-paid CEOs at Canadian companies across all industries.

Macdonald’s report, titled “The Golden Cushion”, looks at CEO compensation in 2019.

Four cannabis-industry executives made the top 100. Leading the charge was Aphria Inc. CEO Irwin D. Simon. Earning more than $18.4 million in 2019, Simon took the seventh spot. To put that in perspective, the overall highest earner was José Cil of Restaurant Brands International, which owns Burger King and Tim Hortons. Cil’s total compensation in 2019 was over $27.4 million.

The 14th-highest-paid executive on the list was former Cronos Group CEO Michael Gorenstein, who earned about $15 million in 2019.

Former Canopy Growth CEO Bruce Linton, came in 50th with earnings of about $9.3 million, while Hexo Corp. CEO Sebastien St. Louis was 62nd, having earned about $8.8 million.

Of course, CEOs’ personal compensation isn’t always a reflection of a company’s performance. For example, in fiscal 2019, Aphria reported a net loss of $16.5 million. In the same year, Cronos reported a $121 million operating loss. Canopy and Hexo, meanwhile, reported respective losses of $670 million and $81.6 million.

Changes in the industry

Of the four cannabis CEOs named, only two remain in that position. Linton was ousted from Canopy Growth in the summer of 2019. At Cronos Group, Gorenstein’s current title is Executive Director, with Kurt Schmidt stepping in as President and CEO in September of 2020. (Incidentally, the Motley Fool listed Cronos as one of three pot stocks to avoid in 2021. Aurora and Organigram were the others.)

There have been other major changes in the Canadian cannabis industry, as well. This past December 15, Aphria merged with Tilray to create the largest multinational cannabis company by revenue.

In his report, Macdonald noted that companies won’t report their 2020 CEO pay data until the spring of 2021. In spite of the havoc wreaked on many parts of the economy by the COVID-19 pandemic, Macdonald does not expect the upper echelon of Canadian executives to have felt much of a pinch:

Despite the continuing struggles of low-paid workers, roughly half of Canada’s highest paid CEOs will get similar or even better pay in 2020
compared to 2019. By my rough calculation, 14 of the top paid CEOs in 2019 will likely see their pay increase, 36 will likely see similar pay in 2020, and 50 will likely see their pay fall as the change in their company’s stock price in 2020 was at least 15% smaller than the change in 2019.

David Macdonald, “The Golden Cushion: CEO compensation in Canada”

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