Although 2019 was a challenging year for Canopy Growth Corporation (WEED.TO) (CGC) that was highlighted by a more than 30% drop in share price, CEO David Klein’s total compensation for the 2020 fiscal year was $33.8 million.
Cannabis executives make a lot of money and CEO salary amounts typically do not surprise us. What did surprise us with this amount was that the ratio of Klein’s salary to the median annual salary of all other Canopy Growth employees was 1,042 to 1.
During the 2019 calendar year, Canopy Growth was a major under performer and fell more than 50% off its highs. During Klein’s tenure, the Canadian cannabis producer has undergone a major transformation. From the writing off of assets to the shutting down of facilities, he has been working to cut costs and maximize profits.
Going forward, the name of the game for Canopy Growth is execution. Earlier this week, the company released first quarter financial results and reported a much smaller net loss than expected. During the quarter, the company generated more than $100 million of revenue and are bullish on the growth profile that is associated with the operation.
From international markets to the US CBD market, Canopy Growth has attractive growth prospects and we will monitor how these verticals support growth on a going forward basis. Although we are favorable on the direction that the management team is taking the business from a profitability standpoint, we believe that the CEO is getting overcompensated. We are of the opinion that the company could use some of his salary to attract top talent and will monitor how the story continues to advance in the back half of the year.
If you are interested in learning more about how Canopy Growth is positioned to be a global cannabis leader, please send an email to email@example.com to be added to our distribution list.