Cannabis Compensation #1

Fred WhittleseyConscious Compensation: The Impact Compensation Blog, Effective Equity: The Equity Compensation Blog, Pay and Performance: The Compensation Blog

From the
Cannabis Compensation Consultant

I did inhale.  I also held it in as long as I could to maximize the effects. Who would have thought that would ever intersect with my investing activity and commentary on executive compensation? (Full disclosure: I reside in the state of Washington where recreational cannabis is legal. We have a pot store just about a mile away, owned by a Grammy-winning drummer.  And yes I understand that the US Drug Enforcement Agency still considers THC a Schedule 1 drug).

Now, with that out of the way, let’s talk about pot. Pot executives.  Pot executive compensation.

I attempted to acquire the URL cannabiscompensation.com but someone already had it and I’m not going to pay extra for it.  So I took cannabiscompensationconsultant.com and cannabiscompensationconsultants.com . I wrote this blog just to start things off and have a page for them to land on while I do some coding.

This all started because I became an active investor in the cannabis industry and have known for a long time that scrutinizing executive compensation practices provides a good insight into potential investment returns. Yes, executive compensation is related to shareholder value but not in the way that we might think. More on that later.

Then, I was contacted by a writer from the Seattle Times asking a question about the compensation disclosed for the CEO of Tilray.  Tilray is a pot company.  To the writer, the pay seemed very high (there will be no end to cannabis puns in this and every other article for the next few years). The total pay number did sound high, so I of course went to the SEC filing.  Yes, $30 million in stock options and RSUs might be a little high for a company this size.  More on the details of that later.

But as is so often the case, the numbers in the Summary Compensation Table may be eye-catching, yet the footnotes and details are always more interesting.

Because of Tilray’s stock price gyrations, the company has generated quite a buzz (ha) in the investment world. After its IPO in July 2018 at $17 per share, the price went above $200 within two months, now settling back down at around $50.

What is interesting about Tilray’s CEO compensation?  All sorts of things! Those details will be in the next post here. Tilray will be the first featured company in this new series examining executive compensation in cannabis companies.