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.
| Current PEO2 · Prior PEO2 · Average of Non-PEO NEOs3 · Value of $100 Initial Investment Based On: · Net Income (Loss)10 ($000) · Adjusted EBITDA11 ($000) |
|---|
| Fiscal Year1 · SCT Total Compensation4 · Compensation Actually Paid5 13 · SCT Total Compensation4 · Compensation Actually Paid6 · SCT Total Compensation4 · Compensation Actually Paid7 13 · Cumulative TSR8 · Peer Group TSR9 |
|---|
| 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) | $5,84512 |
| (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. |
| (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. |
| (3) | The non-PEO NEOs for the applicable fiscal years were as follows: |
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).
| (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. |
| (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: |
| Adjustmentsto DetermineCompensation“ActuallyPaid”forCurrentPEO | SCT TotalCompensation4 | 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 |
| (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: |
| Adjustments to Determine Compensation “Actually Paid” for Prior PEO | SCT Total Compensation4 | 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) |
| (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: |
| Adjustments to Determine Compensation “Actually Paid” for Current PEO | SCT Total CompensationOf 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) |
| (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. |
| (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. |
| (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. |
| (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 |
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
| (12) | Represents Aphria Inc.’s Adjusted EBITDA for the year ended May 31, 2020, presented in USD and according to US GAAP. |
| (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. |
