DEF 14A of Tilray Brands, Inc.

Filed Sep 27, 2024 · FY20240001140361-24-042191

Open on EDGAR

ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
Summary
Summary Tilray’s Board is divided into three classes. Each class has a three-year term. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. The Board presently has seven members and is divided into three classes (I, II, and III) of directors. Each of our directors currently serves until either the 2024 (current), 2025 or 2026 annual meeting of our stockholders and until her or his successor has been duly elected and qualified, or, if sooner, until the director’s death, resignation or removal. It is the Company’s policy to invite directors and nominees for director to attend the Annual Meeting. All of our Board members, who were then-current members of Tilray’s Board, attended our 2023 Annual Meeting of stockholders. David Hopkinson and Thomas Looney are Class III directors and each of them is willing and able to stand for election at the Annual Meeting. Jodi Butts has determined not to stand for re-election as a Class III director, but will continue to serve as a Board member through the end of her current term expiring at the 2024 Annual Meeting. Any vacancies not filled at the Annual Meeting may be filled by the Board.
David Hopkinson and Thomas Looney, the Class III Director Nominees for Election for a Three-Year Term Expiring at the 2027 Annual Meeting
David Hopkinson and Thomas Looney, the Class III Director Nominees for Election for a Three-Year Term Expiring at the 2027 Annual Meeting The biography of each of Mr. Hopkinson and Mr. Looney as Class III director nominees is listed below and contains information regarding the person’s service as a director, business experience, public company director positions currently held or held at any time during the last five years, information regarding involvement in certain legal or administrative proceedings (if applicable), and the experiences, qualifications, attributes or skills that caused the Nominating Committee and the Board to determine that the person should serve as a director in light of our business and structure. Each Class III director nominee listed below exemplifies how our Board values professional experience in business, education, policy and governmental fields as well as strong moral character and diversity in terms of viewpoint as well as age, ethnicity and gender. Our Board believes that each of these director nominee’s strong background and sets of skills provide the Board, as a whole, with a strong foundation of technical expertise and diverse experience in a variety of areas.
David Hopkinson and Thomas Looney, the Class III Director Nominees for Election for a Three-Year Term Expiring at the 2027 Annual Meeting
| David Hopkinson | Independent Director | | Director Since: May 2021 Age: 53 Committees: Nominating and Governance Committee & Compensation Committee | Other Public Company Boards: Mr. Hopkinson is not a director of any other public company board. | | Executive Highlights: | | | Mr. Hopkinson is an accomplished executive with more than 25 years of diverse sports and entertainment industry experience. Most recently Mr. Hopkinson served as the President and Chief Operating Officer at Madison Square Garden Sports Corp. (MSG Sports) from 2020 to 2024, where he was responsible for setting the business strategy and overseeing all aspects of business operations across MSG Sports’ portfolio of assets, which includes the New York Knicks (NBA) and New York Rangers (NHL). Prior to MSG Sports, he served as Global Head of Partnerships for Real Madrid Club de Futbol, one of the world’s top revenue-generating football clubs, where he was responsible for all aspects of global partnerships. Before joining Real Madrid in 2018, Mr. Hopkinson spent over 20 years with Maple Leaf Sports and Entertainment (MLSE) in roles of increasing responsibility. In his last role with the Company, Mr. Hopkinson served as Chief Commercial Officer, where he was responsible for all revenue generation across MLSE’s portfolio of teams, which includes the Toronto Maple Leafs (NHL), Toronto Raptors (NBA) and Toronto FC (MLS). Mr. Hopkinson has served on the Chancellor’s Advisory Committee at McGill University in Montreal, in addition to the Boards of Canada Basketball, Canada’s Walk of Fame, and Women’s College Hospital Foundation in Toronto. In 2013, he was awarded the Queen Elizabeth II Diamond Jubilee Medal in recognition of Service to Canada. | | | Select Skills and Qualifications: | | | Extensive operational, management and revenue generation experience. | |
David Hopkinson and Thomas Looney, the Class III Director Nominees for Election for a Three-Year Term Expiring at the 2027 Annual Meeting
| Thomas Looney | Independent Director | | Director Since: May 2021 Age: 61 Committees: Audit Committee & Chair of the Compensation Committee | Other Public Company Boards: Mr. Looney is not a director of any other public company board. | | Executive Highlights: | | | Tom Looney is the former President of Diageo US Spirits & Canada. In this position Mr. Looney maintained full responsibility for the growth and development of the company’s spirits business in the United States & Canada including brands such as Smirnoff, Crown Royal, Baileys, Johnnie Walker, Captain Morgan, and Ketel One. Mr. Looney was also a member of Diageo’s North American Executive Team. Previously, Mr. Looney held the position of President, Diageo Beer Company overseeing US sales, finance, marketing, and innovation teams. | | | Select Skills and Qualifications: | | | Extensive innovation, sales, finance and marketing experience, especially in the beverage alcohol industry, and risk management. | |
OUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE
OUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF THESE TWO (2) NOMINEES FOR DIRECTOR.
Class I and Class II Directors Continuing in Office Until the 2025 and 2026 Annual Meetings, Respectively
Class I and Class II Directors Continuing in Office Until the 2025 and 2026 Annual Meetings, Respectively
Class I and Class II Directors Continuing in Office Until the 2025 and 2026 Annual Meetings, Respectively
| Irwin D. Simon | Chairman, President, and Chief Executive Officer | | Director Since: May 2021 Age: 66 Committees: None | Other Public Company Boards: Mr. Simon is currently a director of Stagwell Inc. | | Executive Highlights: | | | Irwin D. Simon is a Canadian American businessman and visionary leader who serves as Chairman and Chief Executive Officer at Tilray Brands, Inc, the world’s leading lifestyle consumer packaged goods company with a diversified portfolio of consumer brands across medical and adult-use cannabis, wellness foods, and beverages including craft beer, spirits, and cannabis drinks. Tilray’s unprecedented platform operates in over 20 countries and leads across markets as the #1 medical and adult-use cannabis company in Canada, the largest federally legal cannabis market in the world, the leader in medical cannabis across Europe, and 5th largest craft brewer in the United States. Mr. Simon was until August 2024, the Executive Chairman of Whole Earth Brands, Inc., a global industry-leading platform focused on the “better for you” consumer packaged goods and ingredients space. Mr. Simon continues to serve as Lead Director at Stagwell Inc., a digital-first global marketing network that delivers scalable, seamless solutions through a unique combination of culture-moving creativity and leading-edge technology. | | | A transformative entrepreneur for over four decades, Mr. Simon is recognized as a forefather of the organic and natural products industry. In 1993, he founded and served as the Chairman and CEO of The Hain Celestial Group, Inc., a leading organic and natural products company, providing consumers with A Healthier Way of Life™. During his 25 year tenure, he grew Hain Celestial to a $3 billion business with operations in North America, Europe, Asia and the Middle East. | | | Mr. Simon also serves on the board of directors at Tulane University and the Board of Trustees at Poly Prep Country Day School. | | | Select Skills and Qualifications: | | | Executive and public company board leadership, entrepreneurship, extensive global consumer-packaged goods business and brand development experience, as well as in-depth knowledge of our industry. | |
Class I and Class II Directors Continuing in Office Until the 2025 and 2026 Annual Meetings, Respectively
| Renah Persofsky | Independent Director | | Director Since: May 2021 Age: 66 Committees: Vice-Chair (Lead Director) and Chair of the Nominating and Governance Committee, Independent Director | Other Public Company Boards: Ms. Persofsky is currently a director of Hydrofarm Holdings Group, Inc. and GreenLane Holdings. | | Executive Highlights: | | | Renah Persofsky , ICD.D, Vice-Chair (Lead Director) and Chair of the Nominating and Governance Committee, Independent Director. With a remarkable career spanning over four decades, Renah Persofsky is a seasoned business leader and a trailblazer in various industries. Currently, she is the executive chairman of Green Gruff, a pioneering dog wellness company committed to producing organic and sustainable dog supplements and treats. In addition to her role at Green Gruff, Ms. Persofsky serves as a distinguished member of the board of Hydrofarm Holdings Group, America’s oldest and largest independent wholesaler and manufacturer of hydroponics equipment and grow lights. She also serves on the board of Oceansix, an Israeli founded forward-thinking technology and manufacturing company in the renewable plastic industry. Ms. Persofsky’s experience in the cannabis industry is further solidified through her role on the Board of Greenlane Holdings, one of the largest global sellers of cannabis accessories. Her extensive experience includes serving as an executive consultant to many brands, including Tim Hortons, Canadian Tire, CIBC, Canada Post, and Interac. She also held an executive officer position at the Bank of Montreal. Ms. Persofsky’s expertise in e-commerce is globally recognized. She has co-chaired the Canadian Minister’s Advisory Committee on Electronic Commerce and served as a special advisor to the Minister of Foreign Affairs and Trade. Her contributions to these roles underscore her commitment to innovation and her vision for a digitally connected world. | | | Select Skills and Qualifications: | | | Public company board experience, extensive governance and management experience. | |
Class I and Class II Directors Continuing in Office Until the 2025 and 2026 Annual Meetings, Respectively
| David Clanachan | Independent Director | | Director Since: May 2021 Age: 62 Committees: Audit Committee Member | Other Public Company Boards: Mr. Clanachan is not a director of any other public company board. | | Executive Highlights: | | | David F. Clanachan is the current Chair of the Board of Directors for SteamWhistle brewery in Canada, while serving as a consultant to a number of food service companies throughout Canada. He was the past Commissioner of the Canadian Premier League, a post he held from 2018 until 2021. Mr. Clanachan was also the Chairman of Restaurant Brands International, Canada until 2018. He was named President and Chief Operating Officer of Tim Hortons from 2014 to 2018, and had more than 35 years of service for that brand. Mr. Clanachan holds a Bachelor of Commerce degree from the University of Windsor. Mr. Clanachan brings to the Board significant experience in consumer products and services, as well as financial, international growth, and general management experience. | | | Select Skills and Qualifications: | | | Extensive consumer products and services, financial, international growth, and general management experience. | |
Class I and Class II Directors Continuing in Office Until the 2025 and 2026 Annual Meetings, Respectively
| John M. Herhalt | Independent Director | | Director Since: May 2021 Age: 67 Committees: Chair of the Audit Committee | Other Public Company Boards: Mr. Herhalt is not a director of any other public company board. | | Executive Highlights: | | | John M. Herhalt is a FCPA (FCA) and a retired partner from KPMG and has over 45 years of experience. He has worked across several industry sectors including automotive manufacturing, consumer products, infrastructure, power and utilities, and the public sector. During his time with KPMG, Mr. Herhalt served as Canada’s national advisory services business leader, national public sector leader, and KPMG International’s global head of infrastructure, government, and health care sectors providing subject matter advice and support to various KPMG member ﬁrms and their clients on a variety of projects in the Americas, Europe, Middle East, and Asia. After retiring from KPMG, Mr. Herhalt has continued to provide management consulting services on a part-time basis and serves as a director on several boards. | | | Select Skills and Qualifications: | | | Extensive accounting, financial, governance, risk management and information systems audits, and global business experience. | |
Class III Director, Continuing in Office Until the End of Current Term on November 21, 2024
Class III Director, Continuing in Office Until the End of Current Term on November 21, 2024
Class III Director, Continuing in Office Until the End of Current Term on November 21, 2024
| Jodi Butts | Independent Director | | Director Since: May 2021 Age: 52 Committees: Nominating & Governance Committee Member | Other Public Company Boards: Ms. Butts is currently a director of Canada Goose Holdings Inc. | | Executive Highlights: | | | Jodi Butts is a senior governance consultant at WATSON Advisors Inc., with more than 20 years’ experience in governance and law, working with public and private corporations, public sector entitles, member-based organizations, regulatory bodies, and not-for-proﬁt organizations. Ms. Butts brings deep governance expertise gained from her experience as a lawyer, CEO, senior executive, and as a director of public, private, and not-for-proﬁt corporations. Ms. Butts connects governance with people, strategy, and operations to bring a wealth of practical know-how to boards and executive teams. Ms. Butts currently serves as an independent director of Canada Goose Inc. and as chair of The Walrus Board of Directors. She also holds advisory roles with Bayshore Home Healthcare, and the Canadian Centre for the Purpose of the Corporation. Ms. Butts is a retired member of the University of Windsor Board of Governors. Previously, Ms. Butts served as CEO of Rise Asset Development, and Senior Vice-President Corporate Affairs and Operations for Mount Sinai Hospital. Ms. Butts holds a BA (English Literature and History) from the University of Windsor and a Bachelor of Laws from the University of Toronto where she also received her master’s degree in Canadian history. | | | Select Skills and Qualifications: | | | Executive and public company board experience, entrepreneurship, operations and extensive corporate governance experience, including with respect to environmental and social matters. | |
Overview of Board Skills and Qualifications
Overview of Board Skills and Qualifications The following table highlights our current director’s primary qualifications and tenure. This table is intended as a high-level summary and not an exhaustive list of each director’s skills or contributions to the Board.
Overview of Board Skills and Qualifications
| | Irwin D. Simon | Renah Persofsky | Jodi Butts | David Clanachan | John M. Herhalt | David Hopkinson | Tom Looney | | Knowledge, Skills & Experience | | | | | | | | | Accounting / Financial Reporting | | | | X | X | | | | Business Operations | X | X | X | X | X | X | X | | Corporate Governance | X | X | X | X | X | X | | | Environmental / Social /Governance | | | X | | X | | | | Financial Literacy / Expertise | X | X | | X | X | | X | | Government / Regulatory | X | | X | | X | | | | Human Capital Management | | | | | X | | | | Independence | | X | X | X | X | X | X | | Consumer Packaged Goods | X | X | | | | | | | International Business (outside North America) | X | X | | | X | X | | | Investor Relations Management | X | | | | | | | | Mergers & Acquisitions | X | X | | X | X | | X | | Public Company Executive Experience | X | X | X | X | X | X | X | | Recent Public Company Board Experience | X | X | X | X | | X | | | Risk Management | X | | X | X | X | | X | | Technology / Cybersecurity | | X | | X | X | | | | Board Tenure | | | | | | | | | Years | 3 | 3 | 3 | 3 | 3 | 3 | 3 |
INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE
INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE
Nominating and Corporate Governance Committee
| • | reviewing and recommending to our Board for approval the compensation of our directors; |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
NON-EMPLOYEE DIRECTOR COMPENSATION POLICY
NON-EMPLOYEE DIRECTOR COMPENSATION POLICY Our non-employee directors are entitled to receive compensation for their service consisting of annual cash retainers and equity awards, as described below. Our Board may revise the policy as it deems necessary or appropriate. Cash Compensation. All non-employee directors are entitled to receive the following annual cash compensation:
NON-EMPLOYEE DIRECTOR COMPENSATION POLICY
| Board of Directors | $140,000 | | Chair of committee: | | | Audit | $20,000 | | Compensation | $20,000 | | Nominating and Corporate Governance | $20,000 | | Lead Independent Director: | $90,000 |
NON-EMPLOYEE DIRECTOR COMPENSATION POLICY
Equity Compensation. On an annual basis, each director is granted an annual RSU grant for Common Stock with a total value of $250,000, subject to 100% “cliff” vesting on the earlier of the (i) one (1) year anniversary of such grant date or (ii) next annual stockholder meeting, assuming continued Board service for such period. The Fiscal Year 2024 annual award was granted to each non-employee director on July 26, 2023.
DIRECTOR COMPENSATION FOR FISCAL YEAR 2024
DIRECTOR COMPENSATION FOR FISCAL YEAR 2024 The following table sets forth information regarding compensation earned by or paid to our non-employee directors during fiscal year 2024.
DIRECTOR COMPENSATION FOR FISCAL YEAR 2024
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | | Jodi Butts | 140,000 | 250,000 | 390,000 | | David F. Clanachan | 140,000 | 250,000 | 390,000 | | John M. Herhalt | 160,000 | 250,000 | 410,000 | | David Hopkinson | 140,000 | 250,000 | 390,000 | | Thomas Looney | 160,000 | 250,000 | 410,000 | | Renah Persofsky | 250,000 | 0 | 250,000 |
DIRECTOR COMPENSATION FOR FISCAL YEAR 2024
| (1) This includes FY 2024 RSU equity grants. Ms. Persofsky voluntarily waived her right to an annual RSU equity grant in respect of FY 2024. |
DIRECTOR COMPENSATION FOR FISCAL YEAR 2024
| Name | Number of shares Subject to Outstanding Options as of May 31, 2024 | Number of shares Underlying RSUs as of May 31, 2024 | | Jodi Butts | — | 166,668 | | David F. Clanachan | — | 133,392 | | John M. Herhalt | — | 178,581 | | David Hopkinson | — | 176,143 | | Thomas Looney | — | 178,581 | | Renah Persofsky | 30,710 | 63,386 |
Executive Summary: Compensation Program and FY 2024 Awards
| • | enable us to attract, motivate and retain the people needed to support our long-term goal of being an industry leader; |
Executive Summary: Compensation Program and FY 2024 Awards
| • | reward the individual performance that contributes to our short-term and long-term successes. |
Partial Achievement of Fiscal Year 2024 Performance Targets; Transaction Bonus Payments
Partial Achievement of Fiscal Year 2024 Performance Targets; Transaction Bonus Payments
Partial Achievement of Fiscal Year 2024 Performance Targets; Transaction Bonus Payments
| • | Successfully identified, completed and integrated three (3) strategic acquisition targets, including HEXO Corp. in Canada (acquisition closed July 2023); eight (8) AB craft beverages in the U.S. (acquisition closed in October 2023); and Truss beverages in Canada (acquisition of controlling interest closed in September 2023 and subsequent sale closed in May 2024). Management effectively consolidated and integrated each of these acquired businesses and exceeded all applicable cost-saving targets and facility optimization goals. |
Partial Achievement of Fiscal Year 2024 Performance Targets; Transaction Bonus Payments
| • | Achieved a reduction of net leverage ratio at Fiscal Year-end 2024 equal to 1.73, significantly better than the applicable financial target of 2.50 net leverage ratio at Fiscal Year-end 2024. |
Partial Achievement of Fiscal Year 2024 Performance Targets; Transaction Bonus Payments
| • | Achieved 26% net revenue growth and net revenues of $789 million for Fiscal Year 2024, as compared to revenue target of $715 million. The applicable financial revenue target was not fully achieved if acquisitions were excluded from the applicable calculation. |
Partial Achievement of Fiscal Year 2024 Performance Targets; Transaction Bonus Payments
| • | Adjusted EBITDA(1) for Fiscal Year 2024 was equal to $60.5 million, as compared to the adjusted EBITDA target of $65 million and investor guidance of $60–63 million. Therefore, despite improved adjusted EBITDA performance in 2024 as compared to Fiscal Year 2023, and despite achieving revised investor guidance, this performance target was determined not to be fully achieved. |
Partial Achievement of Fiscal Year 2024 Performance Targets; Transaction Bonus Payments
In making incentive award determinations, the Committee also considered other impactful initiatives implemented by management, including operational improvements and improved facility utilization levels; expanded distribution opportunities; product innovations and improved production efficiencies; and successful resolution of litigation claims for significantly less than projected amounts. As a result of the Company’s partial achievement of the Company’s financial and operational targets, together with these other significant accomplishments, the Compensation Committee determined to pay annual cash bonus awards in an amount equal to 20-30% of the applicable bonus targets to the NEOs in respect of the Fiscal Year 2024. In addition to the annual bonus payments for partial achievement of financial performance targets in respect of Fiscal Year 2024, our NEOs received transaction bonus payments in August 2023 in recognition of their successful efforts in structuring and completing the acquisition of HEXO Corp., which closed in June 2023. This acquisition resulted in meaningful financial and operational benefits to Tilray. These HEXO transaction bonus payments are disclosed in the Summary Compensation Table in respect of Fiscal Year 2024.
Summary of Executive Compensation Philosophy and Objectives
| What We Do | | What We Don’t Do | | | ✔ | Pay for Performance – majority of compensation “at risk” | ✘ | Permit short sales by directors, officers or employees | | ✔ | Reasonable post-employment and change in control provisions | ✘ | Allow hedging or pledging of Company stock | | ✔ | Stock ownership guidelines | ✘ | Offer change in control tax gross-ups | | ✔ | Use of Multiple Performance Metrics | ✘ | Permit repricing of underwater options without stockholder approval | | ✔ | Clawback Policy for equity incentive awards and cash bonuses in the event of restatement of financial results | ✘ | Offer unreasonable perquisites | | | | ✘ | No single trigger cash severance based solely on a change in control of the Company |
Engagement of Independent Compensation Consultant
Engagement of Independent Compensation Consultant In respect of compensation amounts for Fiscal Year 2023, the Compensation Committee consulted with an independent compensation consultant, Korn Ferry that provided advisory services. During the Fiscal Year 2023 engagement, Korn Ferry conducted a peer group review along with a subsequent analysis of executive base salaries, bonuses, and equity awards. This comprehensive market review also included relevant compensation survey data. Director pay levels were among the items reviewed by Korn Ferry. The Compensation Committee assessed the independence of Korn Ferry prior to its engagement and determined that its work for the Compensation Committee would not raise any conflict of interest.
Peer Group Composition
Peer Group Composition The Compensation Committee’s review and determination of the applicable peer group appropriately balanced the following four relevant spectrums:
Peer Group Composition
| 1. | Industry: Focus was given to companies in the cannabis industry as this best represents the main customer, labor and capital markets in which Tilray competes; however, given Tilray is larger than other cannabis companies, it was important to assess other industries as well. |
Peer Group Composition
| • | Broader biotechnology / pharmaceuticals companies were included because they are similar to Tilray’s medical cannabis business in many respects. |
Peer Group Composition
| • | Companies in the consumer-packaged goods industry were also considered due to Tilray’s consumer-product based business model, and Tilray’s expansion of products and services in the brewery and distillery industry. |
Peer Group Composition
| • | Because the Company’s operations span multiple industries, the Committee also believes that a consistent approach across the breadth of the Company’s operations with respect to features of our overall executive compensation structure is best achieved by reference to a group of general industry peers that is broader than the cannabis, biotechnology, and consumer-packaged goods industry peers. |
Peer Group Composition
| 2. | Size: Company size is a strong indicator of organizational complexity and drives scope of accountability. |
Peer Group Composition
| • | Given the anticipated growth of Tilray following the Business Combination and the cannabis sector overall, a wider financial lens was applied by Korn Ferry, and revenue was the primary indicator of size. Total assets and market capitalization were used as secondary reference points. |
Peer Group Composition
| 3. | Operations: As Tilray is an established international operator in the cannabis industry, focus was given to companies that are based in North America and have international operations. |
Peer Group Composition
| 4. | Location: The regions or countries where Tilray competes for talent. Our approach proposes to focus the executive compensation analysis primarily to Canadian and U.S.-based companies. |
Peer Group Composition
| • | Since Tilray is U.S.-based with Canadian and U.S.-sourced executives, the Canadian and U.S. markets are both relevant sources of data. Should other markets become relevant in the future, consideration will be given to including companies from those geographies in Tilray’s peer group. |
Peer Group Composition
It was important to the Compensation Committee that the peer group reflect high revenue growth companies. In March 2021, the ultimate outcome of this peer group review was the creation of the following 18-company peer group for Fiscal Year 2022 and subsequent years, for purposes of determining the compensation arrangements for Tilray’s senior executive officers:
Peer Group Composition
| Cannabis Companies Canopy Growth Corporation Curaleaf Holdings, Inc. | Cresco Labs, Inc. Green Thumb Industries, Inc. | GW Pharmaceuticals plc Trulieve Cannabis Corp. | | Biotechnology/Pharmaceutical/Technology Companies Catalent, Inc. DocuSign, Inc. | Etsy, Inc. Incyte Corporation | Neurocrine Biosciences, Inc. Unity Software Inc. | | Consumer Packaged Goods/Alcohol Companies Beyond Meat Constellation Brands, Inc. | Monster Beverage National Beverage | The Boston Beer Company, Inc. The Simply Good Food Co. |
Peer Group Composition
Based on Korn Ferry’s guidance, no changes were made to this peer group for purposes of Fiscal Year 2024 compensation. As the cannabis industry and our business evolves and diversifies, the Compensation Committee will continue to evaluate the appropriateness of each peer annually and make any necessary changes for Fiscal Year 2025.
Key Components of Tilray Compensation Plan
| Compensation Element | Primary Purpose | | Performance Period | | Details | | | Cash Compensation | | | | | | | | Base Salary | • | Fixed annual compensation for ongoing services performed, executive tenure, and role | • | Ongoing | • | Provided in cash each pay period. Intended to be competitive in marketplace and to retain key employees | | | • | Continuity | | | | | | Annual Performance-based Bonus | • | Reinforce and drive short-term priorities and business results | • | 1 year | • | Target award based on a percentage of salary; limited to 100% of base salary for senior executives (except for the CEO whose percentages range from 200% to 350% of salary) | | | • | Recognize and reward corporate, and business, and individual performance, including for awards for material transactions | | | • | Incentivizes and rewards the achievement of predetermined corporate and business short-term objectives that are aligned with our strategic plan as well as individual performance | | Equity Award Compensation | | | | | | | | EBITDA PSU Awards (as described below) | • | Reinforce and drive long-term stockholder value | • | Generally, 3 years | • | The Compensation Committee issued at-risk grants to the NEOs in July 2023 and April 2024 that included both time and performance-based vesting terms and conditions | | | • | At risk equity awards based on achievement of Company’s financial performance and benefits | | | | | | Annual Long-term incentives (LTIP RSUs) | • | Reinforce and drive long-term stockholder value | • | 2 years | • | Annual grants of LTIP RSUs: The grant value is based on applicable market-driven metrics level and percentage of salary with 50% of the shares vesting one year from the vesting commencement date and the remaining 50% of the shares vesting on the second anniversary of the grant date. | | | • | Retention of key employees during applicable performance periods | | | | |
Shareholder Engagement in Response to Say-on-Pay Vote: Improvements to Compensation Practices and Governance Initiatives
Shareholder Engagement in Response to Say-on-Pay Vote: Improvements to Compensation Practices and Governance Initiatives In the Company’s most recent “say-on-pay” advisory vote under the Company’s 2023 Proxy Statement, approximately 75% of the shareholder votes cast were voted in favor of our executive compensation program. In response to these disappointing voting results, management and the Board engaged in shareholder outreach and solicitation of feedback, including through multiple “Ask Me Anything” (AMA) forums on Reddit. Following these discussions, and to ensure we understood shareholder concerns, management and the Board undertook the following initiatives to improve our compensation practices and corporate governance. First, the Compensation Committee engaged Korn Ferry as an independent consultant to provide an extensive competitive analysis and to advise it on new potential compensation arrangements that were implemented in July 2023. Second, the Compensation Committee structured at-risk equity incentive awards based on the achievement of specific financial performance metrics and targets. These equity awards included both time and performance-based vesting conditions to ensure alignment with shareholder interests and the retention of key employees. Third, the Board adopted and implemented a “clawback policy” in 2023, pursuant to which the Company will be entitled to recover erroneously awarded incentive-based compensation from its executive officers in the event the Company is required to prepare an accounting restatement to correct previously-issued financial statements. As a Large Accelerated Filer, the Nasdaq Global Select Market requires the Company to periodically hold a nonbinding advisory vote on our NEO compensation. Pursuant to an advisory vote at the Fiscal Year 2021 annual meeting, the Company adopted a frequency of every two years for solicitation of an advisory vote on our NEO compensation. Accordingly, the most recent vote occurred at the 2023 annual meeting, and the next such vote is expected to be solicited at our 2025 annual meeting. The Compensation Committee considers the results of our annual Say-on-Pay votes in determining our subsequent compensation policies and decisions and engages with our stockholders to obtain additional feedback on our executive compensation program and related pay decisions.
Risk Management Considerations
| • | Financial Performance Measures. The financial metrics used to determine the amount of an executive’s bonus are measures the Committee believes drive long-term stockholder value. The ranges set for these measures are intended to reward success without encouraging excessive risk-taking. |
Risk Management Considerations
| • | Clawback Policy. Pursuant to the terms of the Company’s 2018 Amended and Restated Tilray Brands, Inc. Equity Incentive Plan (the “2018 Equity Plan”), if the Company is required to restate its financial results due to material noncompliance with financial reporting requirements under the securities laws as a result of misconduct by an executive officer, applicable law permits the Company to recover equity incentive compensation from that executive officer (including profits realized from the sale of Company securities). In such a situation, the Board would exercise its business judgment to determine what action it believes is appropriate. Action may include recovery or cancellation of any equity incentive award made to an executive on the basis of having met or exceeded performance targets during a period of fraudulent activity or a material misstatement of financial results if the Board determines that such recovery or cancellation is appropriate due to intentional misconduct by the executive officer that resulted in performance targets being achieved that would not have been achieved absent such misconduct. |
Total Cash Compensation of NEOs
Total Cash Compensation of NEOs Overview The total cash compensation of our executive compensation program has served a two-fold purpose. Base salaries are intended to provide financial stability, and predictability and security of compensation for our NEOs for fulfilling their core job responsibilities, while the annual cash performance bonus is intended to incentivize and reward the achievement of predetermined corporate objectives that are aligned with our strategic plan as well as individual performance. Adjustments in total cash compensation targets may then be made based on factors such as an executive’s duties and responsibilities and his or her position in the Company, an executive’s individual contributions, as well as management’s financial forecasts for the upcoming year. Fiscal Year 2024 Base Salary and Total Cash Compensation Determinations The Compensation Committee generally establishes annual base salaries for our NEOs commensurate with the level of experience that the executive brings to the position, the nature of the responsibilities required of the executive, such as whether the executive is performing in multiple roles, how successful the executive is in achieving goals established by the Compensation Committee and the executive’s contributions to the Company and internal pay equity considerations, but does not assign any specific weights to these factors. As discussed in other parts of this CD&A, the Compensation Committee also gives significant consideration to the size of the Company and our budgeted operating expenses in setting annual base salaries and has not historically targeted base salaries for our NEOs to any specific level within the range of base salaries paid by our peer group. Base salaries are reviewed annually and may be adjusted to better match competitive market levels or to recognize an executive’s professional growth and development, increased responsibility or other discretionary factors. In determining the base salary levels for each of Mr. Simon, Mr. Merton and Ms. Faltischek in connection with their continued employment, the Compensation Committee considered the significant increase in responsibility of these executives post-business combination with Aphria Inc., their respective relevant experience and achievements and the level of compensation of our peer group companies and other survey data and individual negotiations with each executive. For each of Mr. Gendel and Mr. Savell, as a new NEO upon joining the Company, their respective base salaries were determined primarily based on market and competitive conditions applicable to their specific position. The following table sets forth, for each NEO, the annualized base salary for the 2024 Fiscal Year:
Annual Performance Bonus Plan
Annual Performance Bonus Plan We offer our NEOs the opportunity to earn annual cash bonuses that are intended to compensate them for achieving short-term company and individual performance goals. Our Compensation Committee establishes the target bonuses of our NEOs, which are evaluated from time to time. The Company’s compensation program is designed to reward performance relative to corporate financial performance criteria and individual performance. Specifically, the Company’s senior executives are eligible to receive an annual bonus each year in a target amount equal to a percentage of their base salary if the Company fully achieves the financial performance targets established by the Compensation Committee and the CEO and each NEO is determined to have satisfied his or her individual performance criteria. The Company does not apply a formula or use a pre-determined weighting when comparing overall performance against the various individual objectives, and no single objective is material in determining individual awards. In Fiscal Year 2024, management partially achieved the Company’s financial and operating performance targets. Specifically, management:
Annual Performance Bonus Plan
| • | Successfully identified, completed and integrated three (3) strategic acquisition targets, including HEXO Corp. in Canada (acquisition closed July 2023); eight (8) AB craft beverages in the U.S. (acquisition closed in October 2023); and Truss beverages in Canada (acquisition of controlling interest closed in September 2023 and subsequent sale closed in May 2024). Management effectively consolidated and integrated each of these acquired businesses and exceeded all applicable cost-saving targets and facility optimization goals. |
Annual Performance Bonus Plan
| • | Achieved reduction of net leverage ratio at Fiscal Year-end 2024 equal to 1.73, significantly better than the applicable financial target of 2.50 net leverage ratio at Fiscal Year-end 2024. |
Annual Performance Bonus Plan
| • | Achieved 26% net revenue growth and net revenues of $789 million for Fiscal Year 2024, as compared to revenue target of $715 million. The applicable financial revenue target was not fully achieved if acquisitions were excluded from the applicable calculation. |
Annual Performance Bonus Plan
| • | Adjusted EBITDA(2) for Fiscal Year 2024 was equal to $60.5 million, as compared to the adjusted EBITDA target of $65 million and investor guidance of $60–63 million. Therefore, despite improved adjusted EBITDA performance in 2024 as compared to Fiscal Year 2023, and despite achieving revised investor guidance, this performance target was determined not to be fully achieved. |
Annual Performance Bonus Plan
In making incentive award determinations, the Committee also considered other impactful initiatives implemented by management, including operational improvements and improved facility utilization levels; expanded distribution opportunities; product innovations and improved production efficiencies; and successful resolution of litigation claims for significantly less than projected amounts. As a result of the Company’s partial achievement of the Company’s financial and operational targets, together with these other significant accomplishments, the Compensation Committee determined to pay annual cash bonus awards in an amount equal to 20-30% of the applicable bonus targets to the NEOs in respect of the Fiscal Year 2024.
Annual Performance Bonus Plan
| 2 | Adjusted EBITDA is a non-GAAP financial measure. Please see “Reconciliation of Non-GAAP Financial Measures to GAAP Measures” in our Annual Report on Form 10-K for the fiscal year ended May 31, 2024 for a reconciliation of such non-GAAP Measures to the most directly comparable GAAP financial measures. |
Annual Performance Bonus Plan
| Name | Target Bonus Percentage of Base salary | Bonus Target Amount ($) | Bonus Amount ($) Paid for Fiscal Year 2024 | | Irwin Simon | 200% (up to a maximum of 350%) | $3,783,520 (maximum of $6,621,160) | $1,040,000 | | Carl Merton | 100% | $388,304 | $77,661 | | Denise Faltischek | 100% | $600,000 | $120,000 | | Mitchell Gendel | 100% | $560,000 | $112,000 | | Roger Savell | 100% | $525,000 | $155,000 |
Annual Performance Bonus Plan
Equity Incentive Compensation The Company grants long-term incentive awards to our NEOs in the form of restricted share units that may be subject to time-based and performance-based vesting requirements. We use long-term equity-based compensation to incentivize and retain our executive officers by linking their awards to our long-term financial performance. We believe that these long-term incentives motivate our executive officers to grow revenues and earnings, enhance stockholder value and align their interests with those of our stockholders. We award long-term equity-based compensation with restricted stock units that vest over time so long as the executive remains employed with the Company. Thus, the units are designed both to link executives’ interests with those of our stockholders (as the units’ value is based on the value of Tilray Brands, Inc. Common Stock) and to provide a long-term retention incentive for the vesting period, as they generally have value regardless of share price volatility. Awards of performance-based restricted share units cover multiple years, with a percentage of the units subject to the award becoming eligible to vest each year based on the Company’s and the individual’s performance during that year relative to performance goals reviewed by the Compensation Committee. Before any performance-based restricted share unit is paid, the Compensation Committee must certify that the performance target(s) were satisfied. The Compensation Committee has discretion to determine the performance target(s) and any other restrictions or other limitations of performance-based restricted share units and may reserve discretion to reduce payments below maximum award limits. Thus, the performance units are designed both to motivate executives to maximize the Company’s performance each year and provide a long-term retention incentive for the period covered by the award. The Compensation Committee determines the size of equity award grants after considering the following factors:
Annual Performance Bonus Plan
| • | the competitive equity compensation practices for comparable positions identified in the applicable market analysis; |
Annual Performance Bonus Plan
| • | the executive’s level of responsibility and duties; |
Annual Performance Bonus Plan
| • | a comparison to grant levels of other executive officers; |
Annual Performance Bonus Plan
| • | individual NEOs’ performance; |
Annual Performance Bonus Plan
| • | our corporate performance; |
Annual Performance Bonus Plan
| • | our total equity compensation costs relative to total expenses; |
Annual Performance Bonus Plan
| • | the executive’s prior experience, experience within his or her specific job and breadth of knowledge; and |
Annual Performance Bonus Plan
| • | our corporate objectives for share-based compensation charges and earnings dilution. |
Annual Performance Bonus Plan
The Compensation Committee does not take into consideration an executive’s aggregate equity holdings or equity carrying value in determining annual long-term equity incentive awards. 2024 EBITDA PSU Awards In July 2023 and April 2024, the Compensation Committee approved certain terms and conditions of performance-based grants to the NEOs and other key employees under the 2018 Equity Plan (the “2024 EBITDA PSU Awards”). A portion of the 2024 EBITDA PSU Awards were made in 2023 equal to 50% of these performance-based awards, and represent a contingent right to receive a fixed number of shares of Common Stock upon satisfaction of the underlying performance goals. The remaining 50% of the 2024 EBITDA PSU Awards were made in April 2024 and represent a contingent right to receive a cash payment or its equivalent in shares of Common Stock (as determined by the Compensation Committee). The 2024 EBITDA PSU Awards are subject to all the terms and conditions as set forth in the 2018 Equity Plan and the 2024 EBITDA PSU Award Agreement. The percentage of these 2024 EBITDA PSU Awards earned will be based on the Company’s financial performance as measured against target goals for annual and cumulative Adjusted EBITDA (the “Performance Goals”), as determined by the Compensation Committee for the period beginning on June 1, 2023, and ending on May 31, 2026 (the “Performance Period”). The annual goals will be determined at the start of each of the three (3) fiscal years during the three-year Performance Period and will be subject to cumulative goals. The 2024 EBITDA PSU Awards will vest as of the end of the Performance Period (May 31, 2026) subject to the NEO’s continuous service. However, the awards will not settle and payout until the percentage of the 2024 EBITDA PSU Awards earned is determined by the Compensation Committee in July 2026 based on satisfaction of the cumulative Performance Goals. The NEO may earn between 0% and 100% of the target award value based on the Company’s achievement of the Performance Goals. If the NEO’s Continuous Service terminates for any reason other than: (i) without Cause (as defined in the 2018 Plan) within 3 months of the end of the Performance Period; (ii) death; (iii) Disability (as defined in the 2018 Plan); or (iv) in connection with a Change in Control (as defined in the 2018 Plan), unless the Committee determines otherwise, the 2024 EBITDA PSU Award shall be forfeited and canceled immediately without consideration. If the executive officer’s Continuous Service terminates without Cause within 3 months before the end of the Performance Period, a pro rata portion of the 2024 EBITDA PSU Awards (calculated based on the days elapsed in a Performance Period prior to the termination of Continuous Service divided by the total days in the Performance Period) shall vest and become payable. If the executive officer’s Continuous Service terminates due to death or Disability prior to the end of the Performance Period, the 2024 EBITDA PSU Awards will vest at 100% of the target award value. If the executive officer’s Continuous Service is terminated without Cause following a Change in Control, the 2024 EBITDA PSU Awards will vest at 100% of the target award value. Mr. Simon, Mr. Merton, Ms. Faltischek, Mr. Savell, and Mr. Gendel were granted 2024 EBITDA PSU Awards in the following amounts, respectively.
Annual Performance Bonus Plan
| Name | Total Value of PSUs assuming Target Achievement (100%) | | Irwin D. Simon | $16,995,828 | | Carl Merton | $2,386,684 | | Denise Faltischek | $2,420,980 | | Roger Savell | $1,734,504 | | Mitchell Gendel | $2,102,824 |
Annual Performance Bonus Plan
Annual LTIP RSU Grants In addition to the 2024 EBITDA PSU Awards, the Compensation Committee awarded annual LTIP RSU grants to most of the Tilray senior executive officers in July 2023. These LTIP RSU awards, as well as new hire and annual RSU awards, vest in tranches over two years with 50% of the shares subject to the awards generally vesting one year from the vesting commencement date and the remaining 50% of shares vesting on the second anniversary of the vesting commencement date. Restricted stock units provide long-term incentive compensation that has greater retention value as compared to stock options in a flat or down market while minimizing earnings dilution.
Annual Performance Bonus Plan
| Name | Total Annual LTIP RSUs | Annual LTIP RSU Target Percentage of Base Salary | | Irwin Simon | 2,356,218 | 250% | | Carl Merton | 348,954 | 175% | | Denise Faltischek | 498,705 | 175% | | Mitchell Gendel | 462,435 | 175% | | Roger Savell | 453,368 | 175% |
Annual Performance Bonus Plan
Fiscal Year 2024 Compensation Awards Following Closing of Acquisition HEXO Corp. In addition to the annual bonus payments for partial achievement of financial performance targets in respect of Fiscal Year 2024, our NEOs received transaction bonus payments in August 2023 in recognition of their successful efforts in structuring and completing the acquisition of HEXO Corp., which closed in June 2023. This acquisition resulted in meaningful financial and operational benefits to Tilray. These HEXO transaction bonus payments are disclosed in the Summary Compensation Table in respect of Fiscal Year 2024.
Practices Related to the Grant of Equity Awards
Practices Related to the Grant of Equity Awards Under the Company’s practices, the approval of long-term equity incentive compensation for the Company’s regular annual equity awards (including stock options and RSU and PSU grants to our NEOs) is typically made on or about July 30th each year, after the filing of the company’s Annual Report on Form 10-K. Neither the Board nor the Compensation Committee take into account material non-public information when determining the timing or terms of equity awards, nor do we time disclosure of material non-public information for the purpose of affecting the value of executive compensation. During Fiscal Year 2024, the Company did not grant stock options (or similar awards) to any NEO during any period beginning four business days before and ending one business day after the filing of any company periodic report on Form 10-Q or Form 10-K, or the filing or furnishing of any company Form 8-K that disclosed any material non-public information.
Other Compensation and Benefits
Other Compensation and Benefits Severance and Change of Control Benefits. Our NEOs are entitled to certain severance and change of control payments and benefits pursuant to our executive agreements with our NEOs. The terms of executive agreements are described in more detail below in the sections entitled “Employment, Severance and Change of Control Benefits.” The Compensation Committee believes these agreements are an essential element of our executive compensation program and assist the Compensation Committee in recruiting and retaining talented executives. The Compensation Committee also believes these benefits serve to minimize the distractions to the executive, reduce the risk that the executive will depart the Company before an acquisition is consummated, and allow the executive to focus on continuing normal business operations and the success of a potential transaction, rather than worrying about how business decisions that may be in our best interest and the interests of our stockholders will impact his or her own financial security. Further, these agreements are in line with customary practices at an executive level at our peer companies. Other Benefits. We believe that establishing a competitive benefit package consistent with companies with which we compete for employees is an important factor in attracting and retaining talented employees. Thus, we provide our NEOs with employee benefits on the same basis as offered to our full time non-executive employees, including health and dental insurance, supplemental life insurance, short-term and long-term disability, and a 401(k) plan.
Summary Compensation Table
Summary Compensation Table The following table presents all of the compensation paid or awarded to or earned by our NEOs during Fiscal Years 2022 (June 1, 2021 to May 31, 2022), 2023 (June 1, 2022 to May 31, 2023) and 2024 (June 1, 2023 to May 31, 2024). In accordance with the rules promulgated by the SEC, certain columns relating to information that is not applicable have been omitted from this table.
Summary Compensation Table
| Name and Principal Position | Fiscal Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation(3) | Option Awards | All Other Compensation ($)(4) | Total ($) | | Irwin Simon President, Chief Executive Officer and Chairman of the Board | 2024 | 1,891,760 | 2,500,000(6) | 4,547,501 | 1,040,000 | — | 163,710 | 10,142,971 | | | 2023 | 1,819,000 | 2,500,000(5) | 9,249,999 | 1,909,950 | — | 177,635 | 15,656,584 | | | 2022 | 1,714,165 | — | 17,599,962 | — | — | 142,639 | 19,456,767 | | Carl Merton Chief Financial Officer | 2024 | 388,304(7) | 500,000(6) | 673,481 | 77,661 | — | 13,553 | 1,652,999 | | | 2023 | 373,358(7) | 475,000(5) | 1,321,687 | 112,026 | — | 11,049 | 2,293,120 | | | 2022 | 375,086(7) | — | 2,447,902 | — | — | 13,412 | 2,836,400 | | Denise Faltischek Chief Strategy Officer and Head of International | 2024 | 600,000 | 600,000(6) | 962,501 | 120,000 | — | 34,581 | 2,317,082 | | | 2023 | 550,000 | 600,000(5) | 1,539,999 | 165,000 | — | 107,681 | 2,962,680 | | | 2022 | 509,615 | — | 2,365,606 | — | — | 15,125 | 2,890,346 | | Roger Savell(8) Chief Administrative Officer | 2024 | 525,000 | 550,000(6) | 875,000 | 155,000 | — | 27,669 | 2,132,670 | | | 2023 | 500,000 | 75,000(5) | 810,833 | 150,000 | | 97,465 | 1,633,298 | | Mitchell Gendel(9) Global General Counsel and Corporate Secretary | 2024 | 560,000 | 550,000(6) | 892,500 | 112,000 | — | 29,967 | 2,144,466 | | | 2023 | 510,000 | 500,000(5) | 1,408,750 | 153,000 | — | 26,870 | 2,598,620 | | | 2022 | 370,512 | — | 1,999,995 | — | — | 16,297 | 2,386,804 |
Summary Compensation Table
| (1) Each of the named executive officers received a base salary increase effective as of June 1, 2024. |
Summary Compensation Table
| (2) These amounts reported do not reflect the amounts actually received by our NEOs. Instead, these amounts reflect the aggregate grant date fair value of each stock option or restricted stock unit award granted to our NEOs on each of July 26, 2021 (during Fiscal Year 2022); July 26, 2022 (during Fiscal Year 2023); and July 26, 2023 (during Fiscal Year 2024), as computed in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC 718. Assumptions used in the calculation of the grant date fair value of each equity award are included in Note 19 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended May 31, 2024. |
Summary Compensation Table
As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. RSU values in the Stock Awards column are based on performance achieved at 100% for the included RSUs, which was the probable outcome of performance conditions as of the grant date for the included RSUs. The awards described in the Compensation Discussion & Analysis section under “2024 EBITDA PSU Awards” represent a contingent right to receive its equivalent in shares of Common Stock (or cash) for which there was no grant date fair value for purposes of ASC 718 due to the three-year cumulative performance targets not having been set during Fiscal Year 2024. Therefore, there is no corresponding amount included in the Summary Compensation Table above for the 2024 EBITDA PSU Awards. For the 2024 EBITDA PSU Awards, the payout of each NEO’s included PSUs if earned at maximum levels would be $1.93 per PSU based on the value of a share of Company common stock as of the date of grant. The total payout of the 2024 EBITDA PSU Awards if earned at maximum levels based on the value of a share of Company common stock as of the date of grant would be $16,995,828 for Mr. Simon, $2,386,684 for Mr. Merton; $2,420,980 for Ms. Faltischek; $1,743,504 for Mr. Savell; and $2,102,824 for Mr. Gendel. For the 2022 HEXO PSU Awards, the grant date fair value of each NEO’s included PSUs if earned at maximum levels was $3.54 per PSU. The total value of the 2022 HEXO PSU Awards if earned at maximum levels was $5,000,000 for Mr. Simon; $665,000 for Mr. Merton, $665,000 for Ms. Faltischek; $665,000 for Mr. Savell; and $665,000 for Mr. Gendel.
Summary Compensation Table
| (3) Represents the cash performance bonus earned under our Annual Performance Bonus Plan described above. |
Summary Compensation Table
| (4) Further details for Fiscal Year 2024 are included in the “All Other Compensation” table below. |
Summary Compensation Table
| (5) These amounts include transaction bonuses paid to our NEOs in August 2022 (Fiscal Year 2023) in recognition of the HEXO convertible debt investment. |
Summary Compensation Table
| (6) These amounts include transaction bonuses paid to our NEOs in August 2023 (Fiscal Year 2024) in recognition of successful closing of the HEXO acquisition. |
Summary Compensation Table
| (7) The 2024 compensation of Mr. Merton is converted into USD with the exchange rate of May 31, 2024 of $0.7326 (USD) to $1.0000 (CAD). The 2023 compensation of Mr. Merton is converted into USD with the exchange rate of May 31, 2023 of $0.7346 (USD) to $1.0000 (CAD). The 2022 compensation of Mr. Merton is converted into USD with an exchange rate on May 31, 2022 of $0.7899 (USD) to $1.0000 (CAD). |
Summary Compensation Table
| (8) Mr. Savell was hired as Chief Administrative Officer on March 31, 2022. No information is reported for 2022; he was not an NEO for that fiscal year. |
Summary Compensation Table
| (9) Mr. Gendel was hired as Global General Counsel and Corporate Secretary on July 17, 2021. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table shows for Fiscal Year 2024, certain information regarding grants of plan-based awards, to the following named executive officers:
Grants of Plan-Based Awards
| | Estimated Possible Payouts Under Non-Equity Incentive Plan | | | Estimated Possible Payouts Under Equity Incentive Plan(1) | | Grant Date fair value of Equity Awards(2) | | | | Name | Grant date | Target | Maximum | Target | Maximum | Target | Maximum | Type | | Irwin Simon | 26-Jul-23 | | | 2,356,218 | 2,356,218 | $4,547,501 | $4,547,501 | Annual LTIP Incentive | | | 26-Jul-23 | | | 4,403,064 | 4,403,064 | — | — | 2024 EBITDA PSU Awards | | | 5-Apr-24 | | | 4,403,064 | 4,403,064 | — | — | 2024 EBITDA PSU Awards | | | | $3,783,520 | $6,621,160 | | | | | | | Carl Merton | 26-Jul-23 | | | 348,954 | 348,954 | $673,481 | $673,481 | Annual LTIP Incentive | | | 26-Jul-23 | | | 618,311 | 618,311 | — | — | 2024 EBITDA PSU Awards | | | 5-Apr-24 | | | 618,311 | 618,311 | — | — | 2024 EBITDA PSU Awards | | | | $388,304 | $388,304 | | | | | | | Denise Faltischek | 26-Jul-23 | | | 498,705 | 498,705 | $962,501 | $962,501 | Annual LTIP Incentive | | | 26-Jul-23 | | | 627,197 | 627,197 | — | — | 2024 EBITDA PSU Awards | | | 5-Apr-24 | | | 627,197 | 627,197 | — | — | 2024 EBITDA PSU Awards | | | | $600,000 | $600,000 | | | | | | | Roger Savell | 26-Jul-23 | | | 453,368 | 453,368 | $875,000 | $875,000 | Annual LTIP Incentive | | | 26-Jul-23 | | | 449,353 | 449,353 | — | — | 2024 EBITDA PSU Awards | | | 5-Apr-24 | | | 449,353 | 449,353 | — | — | 2024 EBITDA PSU Awards | | | | $525,000 | $525,000 | | | | | | | Mitchell Gendel | 26-Jul-23 | | | 462,435 | 462,435 | $892,500 | 892,500 | Annual LTIP Incentive | | | 26-Jul-23 | | | 544,773 | 544,773 | — | — | 2024 EBITDA PSU Awards | | | 5-Apr-24 | | | 544,773 | 544,773 | — | — | 2024 EBITDA PSU Awards | | | | $560,000 | $560,000 | | | | | |
Grants of Plan-Based Awards
| (1) The share amounts in this column for the awards labeled “2024 EBITDA PSU Awards” represent the number of shares granted on the grant date for 2024 EBITDA PSU Awards. These awards are described in the Compensation Discussion & Analysis section under “2024 EBITDA PSU Awards” granted during Fiscal Year 2024, and did not have a fair value for purposes of ASC 718 on the grant date due to the three-year cumulative performance targets not having been set during Fiscal Year 2024. Therefore, there is no corresponding dollar amount for the 2024 EBITDA PSU Awards included in the Grant of Plan-Based Awards table. In addition, the 2024 EBITDA PSU Awards that were made in April 2024 represent a contingent right to receive a cash payment or its equivalent in shares of Common Stock (as determined by the Compensation Committee). See footnote 2 to the Summary Compensation Table for a discussion of the value of the 2024 EBITDA PSU Awards based on the value of a share of Company common stock as of the date of grant. |
Grants of Plan-Based Awards
| (2) The dollar amounts in this column represent the grant date fair value of the product of the number of shares granted and the closing market price of our common stock on the grant date for time-based restricted stock units. These annual LTIP grants vest at the rate of 50% of the RSUs on the twelve (12) month anniversary of the grant date (the “Vesting Date”), and the remaining 50% RSUs on the 24 months anniversary of the Vesting Date. |
Narrative Disclosure To Grants Of Plan-Based Awards Table
Narrative Disclosure To Grants Of Plan-Based Awards Table Annual Performance Bonus Cash Awards The Company provides eligibility for annual cash bonus awards to reward named executive officers for performance in the fiscal year. For more information regarding our annual performance bonus cash awards, please see the section of the CD&A titled “Annual Performance Bonus Plan.” Equity Compensation Awards Consistent with its practices for awarding restricted stock units described in the CD&A above, the Compensation Committee approved equity compensation awards in the form restricted stock units to each of the named executive officers listed in the table above that are eligible to vest both based on continued service and achievement of performance goals. For more information regarding our equity compensation awards, please refer the section of the CD&A titled “Equity Incentive Compensation.” In addition, the named executive officers’ equity compensation awards may, under certain circumstances, be subject to accelerated vesting in the event of a change of control and termination. For more information regarding the accelerated vesting provisions and treatment of the equity compensation awards in the event of a change of control, refer to the sections titled “Severance and Change of Control Benefits” and “Potential Payments Upon Termination or Change of Control.”
Outstanding Equity Awards At Fiscal Year 2024 End
Outstanding Equity Awards At Fiscal Year 2024 End
Outstanding Equity Awards At Fiscal Year 2024 End
| | | | | Option Awards | | | | Stock Awards | | | Name | Grant Date | Type of Award | Vesting Commencement date | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Operation exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares of units of stock that have not vested ($) | | Irwin Simon | 8/7/2019(1) | APH Ex | 8/7/2019 | 31,887 | — | 8.95 | 8/7/2024 | — | — | | | 7/27/2021(2) | EIP 2018 | 6/1/2021 | — | — | — | — | 130,951 | 235,712 | | | 7/27/2021(3) | EIP 2018 | 7/27/2021 | — | — | — | — | 392,772 | 706,990 | | | 7/27/2021(4) | EIP 2018 | 7/27/2021 | — | — | — | — | 49,097 | 88,375 | | | 7/27/2021(4) | EIP 2018 | 7/27/2021 | — | — | — | — | 49,097 | 88,375 | | | 7/26/2022(5) | EIP 2018 | 6/1/2022 | — | — | — | — | 600,283 | 1,080,509 | | | 7/26/2022(6) | EIP 2018 | 7/26/2022 | — | — | — | — | 1,412,430 | 2,542,374 | | | 7/26/2023(5) | EIP 2018 | 6/1/2023 | — | — | — | — | 2,356,218 | 4,241,192 | | | 7/26/2023(8) | EIP 2018 | 7/26/2023 | — | — | — | — | 4,403,064 | 7,925,515 | | | 4/5/2024(8) | EIP 2018 | 6/1/2024 | | | | | 4,403,064 | 7,925,515 | | Carl Merton | 7/26/2021(3) | EIP 2018 | 7/26/2021 | — | — | — | — | 48,662 | 87,592 | | | 7/26/2021(4) | EIP 2018 | 7/26/2021 | — | — | — | — | 6,083 | 10,949 | | | 7/26/2021(4) | EIP 2018 | 7/26/2021 | — | — | — | — | 6,083 | 10,949 | | | 7/26/2021(2) | EIP 2018 | 6/1/2021 | — | — | — | — | 16,224 | 29,203 | | | 7/26/2022(5) | EIP 2018 | 6/1/2022 | — | — | — | — | 92,753 | 166,955 | | | 7/26/2022(6) | EIP 2018 | 7/26/2022 | — | — | — | — | 187,854 | 338,137 | | | 7/26/2023(5) | EIP 2018 | 6/1/2023 | — | — | — | — | 348,954 | 628,117 | | | 7/26/2023(8) | EIP 2018 | 7/26/2023 | — | — | — | — | 618,311 | 1,112,960 | | | 4/5/2024(8) | EIP2018 | 6/1/2024 | | | | | 618,311 | 1,112,960 |
Outstanding Equity Awards At Fiscal Year 2024 End
| | | | | Option Awards | | | | Stock Awards | | | Name | Grant Date | Type of Award | Vesting Commencement date | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Operation exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares of units of stock that have not vested ($) | | Denise Faltischek | 10/17/2019(7) | APH Ex | 10/17/2019 | 249,000 | — | 6.50 | 10/17/2024 | — | — | | | 7/26/2021(2) | EIP 2018 | 6/1/2021 | — | — | — | — | 16,224 | 29,203 | | | 7/26/2021(3) | EIP 2018 | 7/26/2021 | — | — | — | — | 48,662 | 87,592 | | | 7/26/2021(4) | EIP 2018 | 7/26/2021 | — | — | — | — | 6,083 | 10,949 | | | 7/26/2021(4) | EIP 2018 | 7/26/2021 | — | — | — | — | 6,083 | 10,949 | | | 7/26/2022(5) | EIP 2018 | 6/1/2022 | — | — | — | — | 123,588 | 222,458 | | | 7/26/2022(6) | EIP 2018 | 7/31/2022 | — | — | — | — | 187,854 | 338,137 | | | 7/26/2023(5) | EIP 2018 | 6/1/2023 | — | — | — | — | 498,705 | 897,669 | | | 7/26/2023(8) | EIP 2018 | 7/26/2023 | — | — | — | — | 627,197 | 1,128,955 | | | 4/5/2024(8) | EIP2018 | 6/1/2024 | | | | | 627,197 | 1,128,955 | | Roger Savell | 4/5/2022(2) | EIP 2018 | 4/5/2022 | | — | — | — | 29,830 | 53,694 | | | 4/5/2022(4) | EIP 2018 | 4/5/2022 | — | — | — | — | 11,186 | 20,135 | | | 4/5/2022(4) | EIP 2018 | 4/5/2022 | — | — | — | — | 11,186 | 20,135 | | | 4/5/2022(3) | EIP 2018 | 4/5/2022 | — | — | — | — | 89,485 | 161,073 | | | 7/26/2022(6) | EIP 2018 | 7/26/2022 | — | — | — | — | 187,854 | 338,137 | | | 7/26/2022(5) | EIP 2018 | 6/1/2022 | — | — | — | — | 20,598 | 37,076 | | | 7/26/2023(5) | EIP 2018 | 6/1/2023 | — | — | — | — | 453,368 | 816,062 | | | 7/26/2023(8) | EIP 2028 | 7/26/2023 | — | — | — | — | 449,353 | 808,8358 | | | 4/5/2024(8) | EIP2018 | 6/1/2024 | | | | | 449,353 | 08,835 | | Mitchell Gendel | 7/26/2021(4) | EIP 2018 | 7/26/2021 | — | — | — | — | 6,083 | 10,049 | | | 7/26/2021(4) | EIP 2018 | 7/26/2021 | — | — | — | — | 6,083 | 10,049 | | | 7/26/2021(2) | EIP 2018 | 6/1/2021 | — | — | — | — | 16,224 | 29,203 | | | 7/26/2021(3) | EIP 2018 | 7/26/2021 | — | — | — | — | 48,662 | 87,592 | | | 7/26/2022(5) | EIP 2018 | 6/1/2022 | — | — | — | — | 105,050 | 189,090 | | | 7/26/2022(6) | EIP 2018 | 7/26/2022 | — | — | — | — | 187,854 | 338,137 | | | 7/26/2023(5) | EIP 2018 | 6/1/2023 | — | — | — | — | 462,435 | 832,383 | | | 7/26/2023(8) | EIP 2028 | 7/26/2023 | — | — | — | — | 544,773 | 980,5919 | | | 4/5/2024(8) | EIP 2018 | 6/1/2024 | | | | | 544,773 | 80,591 |
Outstanding Equity Awards At Fiscal Year 2024 End
The market value for each NEOs was based on the closing price $1.80 per share on May 31, 2024.
Outstanding Equity Awards At Fiscal Year 2024 End
| (1) The options vest in three years with 1/3 of the options vesting on each anniversary of the vesting commencement date through the third anniversary of the vesting commencement date. |
Outstanding Equity Awards At Fiscal Year 2024 End
| (2) The award vests in three years with 1/3 of the award vesting on each anniversary of the vesting commencement date through the third anniversary of the vesting commencement date. |
Outstanding Equity Awards At Fiscal Year 2024 End
| (3) 100% of the award vests on December 31, 2025. |
Outstanding Equity Awards At Fiscal Year 2024 End
| (4) The award vests in three years with 50% of the award vesting on the first anniversary of the vesting commencement date and 25% of the award vesting on each of the second and third anniversary of the vesting commencement date. |
Outstanding Equity Awards At Fiscal Year 2024 End
| (5) The award vests in tranches over two years with 50% of the shares subject to the awards vesting one year from the vesting commencement date and the remaining 50% of shares vesting on the second anniversary of the vesting commencement date. |
Outstanding Equity Awards At Fiscal Year 2024 End
| (6) The award vests in three years with 50% of the award vesting on July 31, 2023, 25% of the award vesting on July 31, 2024, and 25% of the award vesting on July 31, 2025. |
Outstanding Equity Awards At Fiscal Year 2024 End
| (7) The options vested on the grant date and will expire on October 17, 2024. |
Outstanding Equity Awards At Fiscal Year 2024 End
| (8) The award has a three-year performance period beginning on June 1, 2023, and ending on May 31, 2026. The awards will vest as of the end of the performance period (May 31, 2026) subject to the NEO’s continuous service, but will not settle and payout until the percentage of the awards earned is determined by the Compensation Committee in July 2026 subject to the satisfaction of the cumulative performance goals. |
Option Exercises And Stock Vested
Option Exercises And Stock Vested The following table shows for the Fiscal Year 2024, certain information regarding option exercises and stock vested during the last fiscal year with respect to the NEOs.
Option Exercises And Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Irwin Simon | — | — | 1,064,119 | $5,209,741 | | Carl Merton | — | — | 162,144 | $715,546 | | Denise Faltischek | — | — | 172,872 | $762,170 | | Roger Savell | — | — | 126,146 | $617,818 | | Mitchell Gendel | — | — | 157,267 | $704,902 |
Pension Benefits
Pension Benefits Our NEOs did not participate in, or otherwise receive any benefits under, any pension or defined benefit retirement plan sponsored by us in Fiscal Year 2024.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation Our NEOs did not participate in, or earn any benefits under, a nonqualified deferred compensation plan sponsored by us during Fiscal Year 2024.
CEO Pay Ratio
CEO Pay Ratio Under SEC regulations, we are required to calculate and disclose the total annual compensation paid to our median employee, as well as the ratio of the total compensation paid to the median employee as compared to the total compensation paid to our CEO (the “CEO Pay Ratio”). Set forth below is a description of the methodology, including material assumptions, adjustments and estimates we used to identify the median employee for purposes of calculating the CEO Pay Ratio:
CEO Pay Ratio
| • | We identified our median employee from all employees, including full-time and part-time employees who were on our payroll records as of a determination date of May 31, 2024. |
CEO Pay Ratio
| • | Compensation for international employees was converted to U.S. dollar equivalents based on the applicable exchange rate. |
CEO Pay Ratio
| • | In determining compensation for purposes of the median calculation, we used each employee’s annual base pay and cash equivalent of benefits. |
CEO Pay Ratio
| • | We annualized the base salary earned during the fiscal year ending May 31, 2024 by all employees. |
CEO Pay Ratio
| • | We then calculated the annual total base compensation of the identified median employee in accordance with the requirements of the Summary Compensation Table. |
CEO Pay Ratio
We determined our median employee’s total compensation based upon the foregoing methodology for Fiscal Year 2024, including any perquisites and other benefits, in the same manner that we determine the total compensation of our named executive officers for purposes of the Summary Compensation Table disclosed above. For the fiscal year ending May 31, 2024, the median employee’s total compensation was $40,088. As disclosed in the Summary Compensation Table, the total compensation of our CEO was $10,142,971, which includes equity awards valued on the date of grant (July 2023) equal to $4,547,501. This equity award amount was based on the grant date value of the Company’s stock equal to $1.93 per share, and is subject to retention and financial-performance based vesting conditions. Inclusive of the equity-incentive awards granted in July 2023, the resulting ratio of the annual total compensation of our CEO to the annual total compensation of the median employee was 253 to 1. The foregoing pay ratio represents the Company’s estimate calculated in a manner the Company believe to be consistent with the SEC rules and applicable guidance. In calculating the pay ratio, SEC rules allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions reflecting their unique employee populations. Therefore, our reported pay ratio may not be comparable to that reported by other companies due to differences in industries, scope of international operations, business models and scale, as well as the different estimates, assumptions, and methodologies applied by other companies in calculating their respective pay ratios. Neither the Compensation Committee nor management of the Company uses the pay ratio measure in making compensation decisions.
Potential Payments Upon Termination or Change of Control
Potential Payments Upon Termination or Change of Control The following table provides information concerning the estimated payments and benefits to which each current NEO would be entitled under the applicable agreement assuming that the triggering event took place on May 31, 2024. There can be no assurance that a triggering event would produce the same or similar results as those estimated below if such event occurs on any other date or at any other price, of if any other assumption used to estimate potential payments and benefits is not correct. Due to the number of factors that affect the nature and amount of any potential payments or benefits, any actual payments and benefits may be different.
Potential Payments Upon Termination or Change of Control
| | Base salary | | Bonus | Equity Awards | Benefits | Total | | | Severance Period (months) | Amount of base pay | Value | Value Unvested Estimates (Max)(1) | COBRA(4)/ Equivalent | Total | | Irwin Simon | | | | | | | | Termination Without Cause or for Good Reason(2) | 18 | $2,837,640 | $5,675,280 | $8,276,537 | $28,481 | $16,817,938 | | Change of Control | 30 | $4,729,400 | $9,458,800 | $25,406,956 | $47,469 | $39,642,624 | | Carl Merton(3) | | | | | | | | Termination Without Cause or for Good Reason | 12 | $388,304 | $388,304 | $1,184,312 | $3,076 | $1,963,995 | | Change of Control | 24 | $776,608 | $776,608 | $3,578,205 | $3,076 | $5,134,497 | | Denise Faltischek | | | | | | | | Termination Without Cause or for Good Reason | 12 | $600,000 | $600,000 | $1,509,367 | $18,987 | $2,728,354 | | Change of Control | 24 | $1,200,000 | $1,200,000 | $3,936,403 | $18,987 | $6,355,390 | | Roger Savell | | | | | | | | Termination Without Cause or for Good Reason | 12 | $525,000 | $525,000 | $1,285,240 | $12,191 | $2,347,431 | | Change of Control | 24 | $1,050,000 | $1,050,000 | $3,122,400 | $12,191 | $5,234,591 | | Mitchell Gendel | | | | | | | | Termination Without Cause or for Good Reason | 12 | $560,000 | $560,000 | $1,410,712 | $14,233 | $2,544,945 | | Change of Control | 24 | $1,120,000 | $1,120,000 | $3,530,307 | $14,233 | $5,784,540 |
Potential Payments Upon Termination or Change of Control
| (1) For all NEOs, the value of equity award acceleration of vesting is based on the closing stock price of $1.80 per share of our common stock as reported on the Nasdaq Global Select Market on May 31, 2024, and based on a 100% target vesting. |
Potential Payments Upon Termination or Change of Control
| (2) Mr. Simon is also entitled to certain payments upon termination of employment due to death or disability. |
Potential Payments Upon Termination or Change of Control
| (3) The amounts shown for Mr. Merton are converted into USD with an exchange rate of $0.7326 (USD) to $1.0000 (CAD). |
Potential Payments Upon Termination or Change of Control
| (4) COBRA calculations are based on current employer paid benefits as of May 31, 2024, for medical and dental coverage and based on family status. |
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between “compensation actually paid” to our PEO and to our other non-PEOs and certain financial performance of the Company. Compensation actually paid, as determined under SEC requirements, does not reflect the actual amount of compensation earned by or paid to our executive officers during a covered year. For further information concerning the Company’s pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to the Compensation Discussion and Analysis. Fair value amounts below are computed in a manner consistent with the fair value methodology used to account for share-based payments in our financial statements under generally accepted accounting principles. For time-based RSU awards, fair value is calculated using the closing price on applicable year-end dates or, in the case of vesting dates, the actual vesting price. For PSU awards, the same valuation methodology as RSU awards is used to calculate fair value except year-end and vesting date values are multiplied by the probability of achievement as of each such date. The estimated probability of achievement was 100% for the Synergy PSUs and HEXO PSUs The awards described in the Compensation Discussion & Analysis section under “2024 EBITDA PSU Awards” granted during Fiscal Year 2024 did not have a fair value for purposes of ASC 718 on the grant date or as the last day of Fiscal Year 2024 due to the three-year cumulative performance targets not having been set during Fiscal Year 2024. Therefore, there is no corresponding amount for the 2024 EBITDA PSU Awards included in the Pay Versus Performance Table or the tables in the footnotes to the Pay Versus Performance table below. See footnote 2 to the Summary Compensation Table for a discussion of the value of the 2024 EBITDA PSU Awards based on the value of a share of Company common stock as of the date of grant. Total shareholder return has been calculated in a manner consistent with Item 402(v) of Regulation S-K.
PAY VERSUS PERFORMANCE
| | Current PEO(2) | | Prior PEO(2) | | Average of Non-PEO NEOs(3) | | Value of $100 Initial Investment Based On: | | Net Income (Loss)(10) ($000) | Adjusted EBITDA(11) ($000) | | Fiscal Year(1) | SCT Total Compensation(4) | Compensation Actually Paid5 13 | SCT Total Compensation(4) | Compensation Actually Paid(6) | SCT Total Compensation(4) | Compensation Actually Paid7 13 | Cumulative TSR(8) | Peer Group TSR(9) | | | | 2024 | $10,142,971 | $11,153,152 | $0 | $0 | $2,061,804 | $2,224,106 | $21.79 | $35.58 | ($222,404) | $60,465 | | 2023 | $15,656,584 | $6,053,926 | $0 | $0 | $2,371,929 | $994,995 | $10.68 | $25.91 | ($1,443,000) | $61,479 | | 2022 | $19,456,767 | $5,599,894 | $0 | $0 | $2,755,870 | $957,950 | $26.56 | $47.89 | ($434,132) | $48,047 | | 2021 | $13,683,998 | $16,536,484 | $6,458,729 | $7,535,144 | $2,208,882 | $3,475,621 | $97.31 | $120.91 | ($336,014) | $40,771 | | 2020 | $0 | $0 | $1,907,812 | ($7,205,882) | $1,394,132 | $431,435 | $48.22 | $90.06 | ($100,833) | $5,845(12) |
PAY VERSUS PERFORMANCE
| (1) In accordance with the transitional relief under the SEC rules, only three fiscal years ending May 31st of information is required as this is the Company’s first fiscal year of disclosure under Item 402(v) of Regulation S-K, with an additional year added in each of the two subsequent years of compliance. Fiscal year 2021 was a five-month transition period (January 1, 2021 to May 31, 2021) due to the change in the Company’s fiscal year-end. For 2020, the reportable year was January 1, 2020 to December 31, 2020. |
PAY VERSUS PERFORMANCE
| (2) In fiscal year 2021, the PEOs included Irwin Simon (Current PEO) and Brendan Kennedy (Prior PEO). Mr. Simon served as the Company’s PEO for fiscal year 2022, 2023, and 2024. Mr. Kennedy served as the Company’s PEO in fiscal year 2020. |
PAY VERSUS PERFORMANCE
| (3) The non-PEO NEOs for the applicable fiscal years were as follows: |
PAY VERSUS PERFORMANCE
2024: Carl Merton (CFO), Denise Faltischek (Head of International and Chief Strategy Officer), Roger Savell (Chief Administrative Officer), and Mitchell Gendel (Global General Counsel and Corporate Secretary 2023: Carl Merton (CFO), Denise Faltischek (Head of International and Chief Strategy Officer), Roger Savell (Chief Administrative Officer), and Mitchell Gendel (Global General Counsel and Corporate Secretary 2022: Carl Merton (CFO), Denise Faltischek (Head of International and Chief Strategy Officer), James Meiers (Head of Canada), and Mitchell Gendel (Global General Counsel and Corporate Secretary 2021: Carl Merton (CFO), Denise Faltischek (Head of International and Chief Strategy Officer), James Meiers (Head of Canada), Michael Krutech (Former CFO), Jon Levin (Former COO), and Andrew Pucher (Former Chief Corporate Development Officer) 2020: Michael Kruteck (Former CFO), Jon Levin (Former COO), Mark Castaneda (Former CFO & Treasurer), Edward Wood Pastorius, Jr. (Former Chief Revenue Officer), Andrew Pucher (Former Chief Corporate Development Officer), and Kathryn Dickson (President, Manitoba Harvest USA, LLC).
PAY VERSUS PERFORMANCE
| (4) The values in this column reflect the “Total” compensation set forth in the Summary Compensation Table (“SCT”) as stated in the Company’s past proxy filings for the corresponding fiscal year. See the footnotes to the applicable SCT for further detail regarding the amounts in this column. |
PAY VERSUS PERFORMANCE
| (5) The following table sets forth the adjustments made during each fiscal year presented in the Pay Versus Performance Table to arrive at compensation “actually paid” to our Current PEO during 2021, 2022, 2023, and 2024: |
PAY VERSUS PERFORMANCE
| Adjustments to Determine Compensation “Actually Paid” for Current PEO | SCT Total Compensation(4) | Deduction for Amounts Reported under the “Stock Awards” and “Option Awards” Column in the SCT | Increase for Fair Value of Awards Granted during the year that Remain Unvested as of Year End | Increase for Fair Value of Awards Granted during the year that Vest during year | Increase/ deduction for Change in Fair Value from prior Year-end to current Year-end of Awards Granted Prior to year that were Outstanding and Unvested as of Year-end | Increase/ deduction for Change in Fair Value from Prior Year-end to Vesting Date of Awards Granted Prior to year that Vested during year | Deduction of Fair Value of Awards Granted Prior to year that were Forfeited or Modified during year | Dollar Value of Dividends or other Earnings Paid on Stock Awards prior to Vesting Date not otherwise included in Total Compensation | Total Adjustments to SCT Total Compensation | | 2024 | $10,142,971 | $4,547,501 | $4,241,192 | $0 | $329,737 | $986,753 | $0 | $0 | 1,010,181 | | 2023 | $15,656,584 | $9,249,999 | $4,363,700 | $0 | ($4,328,895) | ($387,465) | $0 | $0 | ($9,602,659) | | 2022 | $19,456,767 | $17,599,962 | $6,142,756 | $0 | $0 | ($2,399,666) | $0 | $0 | ($13,856,872) | | 2021 | $13,683,998 | $0 | $0 | $0 | $0 | $2,852,486 | $0 | $0 | $2,852,486 |
PAY VERSUS PERFORMANCE
| (6) The following table sets forth the adjustments made during each fiscal year presented in the Pay Versus Performance Table to arrive at compensation “actually paid” to our Prior PEO during fiscal years 2020 and 2021: |
PAY VERSUS PERFORMANCE
| Adjustments to Determine Compensation “Actually Paid” for Prior PEO | SCT Total Compensation(4) | Deduction for Amounts Reported under the “Stock Awards” and “Option Awards” Column in the SCT | Increase for Fair Value of Awards Granted during the year that Remain Unvested as of Year End | Increase for Fair Value of Awards Granted during the year that Vest during year | Increase/ deduction for Change in Fair Value from prior Year-end to current Year-end of Awards Granted Prior to year that were Outstanding and Unvested as of Year-end | Increase/ deduction for Change in Fair Value from Prior Year-end to Vesting Date of Awards Granted Prior to year that Vested during year | Deduction of Fair Value of Awards Granted Prior to year that were Forfeited or Modified during year | Dollar Value of Dividends or other Earnings Paid on Stock Awards prior to Vesting Date not otherwise included in Total Compensation | Total Adjustments to SCT Total Compensation | | 2021 | $6,458,729 | $0 | $0 | $0 | $0 | 1,076,415 | $0 | $0 | $1,076,415 | | 2020 | $1,907,812 | $934,401 | $916,645 | $0 | ($4,086,941) | ($5,008,998) | $0 | $0 | ($9,113,695) |
PAY VERSUS PERFORMANCE
| (7) The following table sets forth the adjustments made during each fiscal year presented in the Pay Versus Performance Table to arrive at the average compensation “actually paid” to our Non-PEO NEOs during each of the reportable years: |
PAY VERSUS PERFORMANCE
| Adjustments to Determine Compensation “Actually Paid” for Current PEO | SCT Total Compensation Of Average of Non-PEO NE | Deduction for Amounts Reported under the “Stock Awards” and “Option Awards” Column in the SCT | Increase for Fair Value of Awards Granted during the year that Remain Unvested as of Year End | Increase for Fair Value of Awards Granted during the year that Vest during year | Increase/ deduction for Change in Fair Value from prior Year-end to current Year-end of Awards Granted Prior to year that were Outstanding and Unvested as of Year-end | Increase/ deduction for Change in Fair Value from Prior Year-end to Vesting Date of Awards Granted Prior to year that Vested during year | Deduction of Fair Value of Awards Granted Prior to year that were Forfeited or Modified during year | Dollar Value of Dividends or other Earnings Paid on Stock Awards prior to Vesting Date not otherwise included in Total Compensation | Total Adjustments to SCT Total Compensation | | 2024 | $2,061,804 | 850,870 | 793,558 | $0 | $45,740 | $173,875 | $0 | $0 | $162,302 | | 2023 | $2,371,929 | $1,270,317 | $599,274 | $0 | ($629,633) | ($76,258) | $0 | $0 | ($1,376,934) | | 2022 | $2,755,870 | $2,294,777 | $752,084 | $0 | $0 | ($255,227) | $0 | $0 | ($1,797,920) | | 2021 | $2,208,882 | $0 | $0 | $0 | $0 | $1,266,739 | $0 | $0 | $1,266,739 | | 2020 | $1,394,132 | $950,676 | $878,066 | $0 | ($204,937) | ($685,150) | $0 | $0 | ($962,697) |
PAY VERSUS PERFORMANCE
| (8) Total shareholder return is calculated for each fiscal year based on a fixed investment of $100 from the day before the beginning of the earliest period reported in the table (December 30, 2020) through the end of each applicable year, assuming reinvestment of dividends. |
PAY VERSUS PERFORMANCE
| (9) Horizons Marijuana Life Sciences Index is the peer group index selected by the Company for this purpose and for purposes of the Stock Performance Graph in our Annual Report. |
PAY VERSUS PERFORMANCE
| (10) The dollar amounts reported represents the amount of net income (loss) reflected in the Company's audited financial statements for the applicable year or period. |
PAY VERSUS PERFORMANCE
| (11) The Company has identified Adjusted EBITDA as the Company-selected measure for this pay versus performance disclosure, as it represents the most significant financial performance measure used to link compensation actually paid to the PEOs and Non-PEO NEOs |
PAY VERSUS PERFORMANCE
to the Company's performance in fiscal year 2024. The Adjusted EBITDA for all years except the year ended May 31, 2024 and the year ended May 31, 2020 includes an adjustment for lease expenses. Please see “Reconciliation of Non-GAAP Financial Measures to GAAP Measures” in our Annual Report on Form 10-K for the fiscal year ended May 31, 2024 for a reconciliation of such non-GAAP Measures to the most directly comparable GAAP financial measures
PAY VERSUS PERFORMANCE
| (12) Represents Aphria Inc.’s Adjusted EBITDA for the year ended May 31, 2020, presented in USD and according to US GAAP. |
PAY VERSUS PERFORMANCE
| (13) The “2024 EBITDA PSU Awards” as described in the Compensation Discussion & Analysis section are not included because there was no change in fair value as of the end of Fiscal Year 2024 based upon the probable outcome of the performance conditions as of the last day of Fiscal Year 2024. There was no grant date fair value for purposes of ASC 718 due to the three-year cumulative performance targets not having been set during Fiscal Year 2024. |

DEF 14A of Tilray Brands, Inc.

ELECTION OF DIRECTORS

Summary

David Hopkinson and Thomas Looney, the Class III Director Nominees for Election for a Three-Year Term Expiring at the 2027 Annual Meeting

David Hopkinson and Thomas Looney, the Class III Director Nominees for Election for a Three-Year Term Expiring at the 2027 Annual Meeting

David Hopkinson and Thomas Looney, the Class III Director Nominees for Election for a Three-Year Term Expiring at the 2027 Annual Meeting

OUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE

Class I and Class II Directors Continuing in Office Until the 2025 and 2026 Annual Meetings, Respectively

Class I and Class II Directors Continuing in Office Until the 2025 and 2026 Annual Meetings, Respectively

Class I and Class II Directors Continuing in Office Until the 2025 and 2026 Annual Meetings, Respectively

Class I and Class II Directors Continuing in Office Until the 2025 and 2026 Annual Meetings, Respectively

Class I and Class II Directors Continuing in Office Until the 2025 and 2026 Annual Meetings, Respectively

Class III Director, Continuing in Office Until the End of Current Term on November 21, 2024

Class III Director, Continuing in Office Until the End of Current Term on November 21, 2024

Overview of Board Skills and Qualifications

Overview of Board Skills and Qualifications

INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE

Nominating and Corporate Governance Committee

DIRECTOR COMPENSATION

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

DIRECTOR COMPENSATION FOR FISCAL YEAR 2024

DIRECTOR COMPENSATION FOR FISCAL YEAR 2024

DIRECTOR COMPENSATION FOR FISCAL YEAR 2024

DIRECTOR COMPENSATION FOR FISCAL YEAR 2024

Executive Summary: Compensation Program and FY 2024 Awards

Executive Summary: Compensation Program and FY 2024 Awards

Partial Achievement of Fiscal Year 2024 Performance Targets; Transaction Bonus Payments

Partial Achievement of Fiscal Year 2024 Performance Targets; Transaction Bonus Payments

Partial Achievement of Fiscal Year 2024 Performance Targets; Transaction Bonus Payments

Partial Achievement of Fiscal Year 2024 Performance Targets; Transaction Bonus Payments

Partial Achievement of Fiscal Year 2024 Performance Targets; Transaction Bonus Payments

Partial Achievement of Fiscal Year 2024 Performance Targets; Transaction Bonus Payments

Summary of Executive Compensation Philosophy and Objectives

Engagement of Independent Compensation Consultant

Peer Group Composition

Peer Group Composition

Peer Group Composition

Peer Group Composition

Peer Group Composition

Peer Group Composition

Peer Group Composition

Peer Group Composition

Peer Group Composition

Peer Group Composition

Peer Group Composition

Peer Group Composition

Peer Group Composition

Key Components of Tilray Compensation Plan

Shareholder Engagement in Response to Say-on-Pay Vote: Improvements to Compensation Practices and Governance Initiatives

Risk Management Considerations

Risk Management Considerations

Total Cash Compensation of NEOs

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Annual Performance Bonus Plan

Practices Related to the Grant of Equity Awards

Other Compensation and Benefits

Summary Compensation Table

Summary Compensation Table