Top Aurora Cannabis executives were rewarded with millions of dollars in bonuses and raises for the fiscal year ended June 30, the company disclosed, despite mass layoffs and a loss exceeding 3 billion Canadian dollars ($2.3 billion).
The Alberta-based company disclosed the figures for the fiscal year in a proxy circular sent ahead of its annual general meeting, scheduled for Nov. 12 via webcast.
Share and option-based awards for the six executive officers listed in the circular rose 58% compared to the year earlier, to CA$9.8 million. Those awards account for most of the executive compensation.
Cash bonuses awarded to the executives, meanwhile, amounted to nearly CA$700,000.
The circular shows that no increases to salaries will be awarded at the executive level for the current fiscal year, which began July 1 and extends through the end of June 2021.
The disclosure also shows that founder Terry Booth was awarded a compensation package worth almost CA$5 million, consisting of a CA$458,911 salary, almost CA$2 million in shares and option-based awards, a CA$350,000 bonus plus another CA$2.1 million.
Booth retired from the CEO position three-quarters into the recently concluded fiscal year.
Michelle Lefler, Aurora’s vice president of communications, told Marijuana Business Daily that executive compensation was determined by the company’s board in accordance with good corporate governance practices.
“Executive bonuses are administered in line with company performance,” she wrote in an email.
Booth and other executives received millions of dollars in restricted share-based awards, option-based awards and bonuses, according to the filing – all in the same fiscal year the company posted a CA$3.3 billion net loss.
Over the same 12-month period, the company slashed about one-third of its workforce as part of a “corporate reset.”
As of Sept. 22, Aurora employed 2,380 people. Those employees are eligible to participate in Aurora’s share-purchase plan, where the company matches worker contributions to a maximum of 3% of base salary.
Substantial pay increases
All the executives listed in the disclosure received raises for the financial year ended June 30, 2020.
- Chief Legal Officer Jillian Swainson’s salary rose 16% to CA$286,538.
- Chief Operating Officer Allan Cleiren saw his salary increase 9% to C$318,269.
- Former President Steve Dobler‘s annual pay rose 11% to CA$368,750.
- Chief Financial Officer Glen Ibbott saw his salary increase 11% to CA$368,750.
- Chair Michael Singer received a raise, but he filled in as interim CEO for part of the fiscal year.
The company also published the corporate objectives and key performance indicators (KPIs) used to guide bonus payouts for executives, which range from 0% to 150% of salary.
“The Management Bonus Plan is a cash bonus designed to reward executives for achieving pre-determined annual corporate and individual performance objectives that are tied directly to the company’s strategy,” according to the circular.
While the CEO, president and CFO are measured against corporate performance, the chief operating officer and chief legal officer’s bonuses are also tied to individual performance.
Raises tied to KPIs
The company uses nine key performance indicators related to its corporate objectives.
The KPIs are categorized by Aurora’s European Union strategy (20%), partnership strategy (20%) and its United States strategy (25%). The company’s growth strategy for Latin America and Australia accounts for 10% of the weighted objectives. Another 12% was for revenue and medical market share.
The remainder covers adult-use market share and earnings before interest, taxes, deduction and amortization (EBITDA).
The company failed to meet corporate objectives for six of the 11 KPIs, according to the circular, and exceeded expectations for one metric.
A corporate objectives score of 49.17% was used to calculate the cash bonuses.
Had Aurora achieved a higher score on its corporate objectives, the bonuses could have been much higher.
Booth was awarded an additional CA$350,000.
Cash bonuses were to be paid on or around Oct. 30, 2020, according to the document.
Matt Lamers is Marijuana Business Daily’s international editor, based near Toronto. He can be reached at [email protected].