Ugh. The lack of financial statement releases this summer is getting really old. While we’re waiting for Tilray later today (and Canopy as well, whenever SEDAR gets updated), I came across Charlotte Web’s ($CWEB) most recent Management Information Circular (MIC) published on August 4th.

If you’re not familiar with them, MIC’s are published annually, and contain typical (and sometimes atypical) corporate housekeeping, setting a date for the AGM, executive compensation, establishing the composition of the board….ectetera.

$CWEB’s AGM is slated for early September – and there’s an interesting amount of material about compensation and some of the changes in leadership that occurred last year. We’ve documented their rapid ascent and decent, including a raise they executed a couple of months ago.

Re-reading that last structure – I was pretty harsh on them. From the MIC, it looks like they became pretty harsh on themselves in terms of governance – at least through the latter half of 2019. 17 of the 36 pages is dedicated to compensation: past, present, and future.

The previous CEO (resigned last May), previous CFO (walked in August ’19), and chief cultivator (walked in January of this year) hadn’t done too badly by the company. I see the previous CEO still has 1.2MM/7 year/$0.55 options (that’s $8MM excluding value of the optionality), the ex-cultivator some 350k options of the same (as well as other options with an expiry in 2029!!!) and the current CEO pulled in about $3MM for the 6 months they worked in 2019 . All in all, that’s pretty steep for a company of this size and profitability. $CWEB apparently thought so as well.

They spent $120k on a consulting outfit to come in and design a compensation program – based upon how a basket of ‘like’ companies pays their folks. And for 17 pages, it’s all compensation sausage making. While a little eye glazing at points, MIC’s are where an investor can get a good look under the hood.

Compensation can be a tricky subject, and when you’re a CEO (or a director) of a public company, you get to wear your pay on a sign around your neck.

What jumped out at me though was all of those ‘consumer product goods’ (CPG) staff and ‘senior key personnel’ $CWEB alluded to hiring in their last MD&A. There isn’t anything in CPG’s that hasn’t been brought on-board. Kraft, Kelloggs, Jack in the Box, Bacardi, a fish oil company…..all CPG all the time.

It looks as if whatever happened last May wasn’t just the departure of their CEO, it began an organizational redesign.

They’re now capitalized for a couple of quarters….sitting on a whack of inventory, facing a litany of competing products and competitors, all within in a nascent product category that’s yet to show it can hit the mainstream of western culture.

Now, we get to see what those ‘key’ personnel can do with a haloed brand that’s come up far short of initial promise.

The preceding is the opinion of the author, and is in no way intended to be a recommendation to buy or sell any security or derivative. The author holds no position in $CWEB