Michael Gorenstein
About Michael Gorenstein
Michael Gorenstein, age 38, serves as Chairman, President and CEO of Cronos Group. He holds a JD from the University of Pennsylvania Law School, a Wharton certificate in Business Economics & Public Policy, and a BS in Finance from Indiana University’s Kelley School of Business . He has been a director since 2015 and currently holds the dual role of CEO and Chairman, with an Independent Lead Director structure in place to mitigate independence concerns . Performance context: revenues rose from $86.7M in FY2022 to $117.6M in FY2024, while EBITDA loss narrowed from -$92.97M to -$45.42M over the same period (see Financials table below) [GetFinancials]. Company cumulative TSR (value of $100 invested 12/31/2019) stood at $26.34 in 2024 versus peer group $13.91 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Alphabet Partners, LP | Vice President & General Counsel | — | Focused on identifying mispriced assets across industries, asset classes, and geographies |
| Sullivan & Cromwell LLP | Corporate Attorney (M&A and capital markets) | — | Transactional experience in mergers, acquisitions, and capital markets |
| Gotham Green Partners | Co-founder and passive member | — | Cannabis industry investing background; passive member status noted |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cronos Growing Company Inc. (Cronos GrowCo) | Board member | — | Governance and supply strategy alignment tied to facility expansion |
Fixed Compensation
| Component | 2024 | Notes |
|---|---|---|
| Base Salary | $775,000 | Per amended/restated executive employment agreement |
| Target Bonus % | 150% of base | Target bonus opportunity of 150% of salary |
| Actual Short-Term Incentive (2024) | $1,438,245 | Based on Business Performance rating 138.2% and Individual Performance rating 102% |
| 2024 Cash Retention Bonus | $174,375 | One-time; paid 3/22/2024; subject to clawback/forfeiture if resignation or termination for cause before 3/22/2025 |
Performance Compensation
Short-Term Incentive Program structure (2024)
| Metric | Weighting | Threshold | Target | Maximum | 2024 Actual | Measure Rating | Business Performance Rating |
|---|---|---|---|---|---|---|---|
| Cronos Net Revenue (non-GAAP) | 30% | $74.1M | $98.8M | $123.6M | $111.9M | 126.4% | 138.2% overall |
| Cronos Adjusted EBITDA (non-GAAP) | 30% | $(67.5)M | $(54.0)M | $(40.5)M | $(38.7)M | 150.0% | 138.2% overall |
| Individual Performance | 40% | — | — | — | — | 102% (CEO) | — |
Notes:
- Business Performance measures were equally weighted (Net Revenue and Adjusted EBITDA) and could be adjusted for qualitative factors; no adjustments were made in 2024 .
- CEO Individual Performance highlights included $8.7M operating expense savings from the fermentation facility wind-down, leading the Cronos GrowCo transaction, and international expansion initiatives .
Long-Term Incentive awards and vesting
| Grant | Grant Date | Instrument | Shares/Units | Grant Date Fair Value | Vesting | |---|---|---:|---:|---| | Annual LTI (2024) | 3/8/2024 | RSUs | 983,502 | $1,937,500 | Vests ratably on 3/8/2025, 3/8/2026, 3/8/2027 | | One-time Sign-on | 3/21/2022 | RSUs | 3,000,000 | — | Time-vested on 3/21/2025; single-trigger vest upon certain change-of-control (Rule 13e-3 purchase) | | Additional RSU grant | 12/13/2022 | RSUs | 499,826 | — | Vests in three equal annual tranches on 12/13/2023, 12/13/2024, 12/13/2025 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 12,508,772 Shares; 3.2% of outstanding (excludes Gotham Green fund holdings due to passive member status) |
| Outstanding Unvested RSUs (12/31/2024) | 3,000,000 (vested 3/21/2025); 31,361 (vested 3/15/2025); 166,642 (vests 12/13/2025); 649,079 (vests 3/15/2025 and 3/15/2026); 983,502 (vests 3/8/2025–2027). Market values as of 12/31/2024 at $2.02: $6,060,000; $63,349; $336,617; $1,311,140; $1,986,674 respectively |
| Options | None disclosed for Gorenstein as of 12/31/2024 |
| Ownership Guidelines (Executives) | CEO required to hold Shares equal to 5x salary; executives have 5 years from appointment to achieve; each executive within window to comply |
| Hedging/Pledging | Prohibited (speculation, short sales, puts/calls, collars/swaps; pledging restricted with case-by-case exemptions only) |
Employment Terms
| Provision | Economics/Terms |
|---|---|
| Base/Bonus/LTI | Base $775,000; target bonus 150% of base; annual LTI target value ≥ $1,937,500 starting 2023 grant cycle |
| Severance – Without Cause/Good Reason | Lump-sum equal to base salary + Target Bonus; benefits continuation up to 1 year; pro-rated annual bonus; accelerated vesting of outstanding equity awards, subject to release |
| Death/Disability | Pro-rated annual bonus; RSUs: death → immediate vest; disability → continue vesting per schedule |
| Change-of-Control | Single-trigger acceleration applies ONLY to 3,000,000 RSUs granted 3/21/2022 upon certain Rule 13e-3 purchase; broader policy is double-trigger acceleration for RSUs (termination without Cause/Good Reason within 1 year post-CoC) |
| Restrictive Covenants | Non-compete & customer non-solicit during employment and 1 year post-termination; employee non-solicit 2 years post-termination |
| Clawbacks | Broad clawback policy covering cash, equity, and equity-based incentives (including time-based equity) with 3-year lookback; separate SEC Rule 10D-1 restatement recovery policy adopted in 2023 |
Board Governance
- Board service: Chairman; director since 2015 .
- Independence: Not independent under NASDAQ Rules and NI 58-101 due to executive status; majority of Board is not independent under NI 58-101 due to Altria control, but only CEO is management; Independent Lead Director structure mitigates dual-role risks (Lead Independent Director: James Rudyk) .
- Committees: Not a member of Audit or Compensation Committees; Audit Committee: Rudyk (Chair), Adler, Garnick; Compensation Committee: Adler (Chair), Rudyk, Seegar .
- Meeting attendance: Board held 5 meetings in 2024; directors attended all Board and committee meetings; Audit Committee met 7 times (100% attendance); Compensation Committee met 6 times (100% attendance) .
- Executive sessions: Five sessions of independent directors held in 2024 .
- Director compensation framework: Executive directors do not receive director fees; non-employee directors receive cash retainers and Deferred Share Units; director ownership guideline 3x cash retainer within 5 years .
Say-on-Pay & Peer Group
- Say-on-Pay: 96% approval in 2024 (excluding abstentions and broker non-votes) .
- Compensation consultant: Mercer (independent) supports benchmarking; peer group includes 13 cannabis and 4 CPG companies (e.g., Curaleaf, Green Thumb, Tilray, Simply Good Foods) .
Related Party Transactions & Policies
- Related party policy requires Independent Committee approval for transactions over $120,000 or Item 404 transactions; ordinary-course exceptions noted .
- Example disclosed: ~$1.746M in purchases from a vendor led by an immediate family member of an executive (Jacobson) in 2024, approved by Audit Committee .
Performance & Track Record
- Strategic cost takeout: Planned wind-down of Cronos Fermentation; ~$8.7M operating expense savings in 2024 .
- Supply capacity: Cronos GrowCo expansion underway; construction expected complete Q2 2025, first harvest/sales in H2 2025; pre-commencement purchase option up to 80% of production, post-commencement option up to 70% .
- Brand expansion: Spinach® and Lord Jones® product launches across edibles, vapes, pre-rolls; in-house vape production for margin improvement .
- International expansion: Entered UK medical market; ongoing sales in Germany via Cansativa; refined Israel portfolio and pricing .
- Governance context: 2021 OSC management cease trade order due to late filing was revoked Feb 23, 2022; restatement-related costs included in Adjusted EBITDA exclusions .
Financials – Revenue and EBITDA (USD)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues | $86.749M | $87.241M | $117.615M |
| EBITDA | -$92.972M* | -$72.453M* | -$45.415M* |
Values with asterisks retrieved from S&P Global.
Equity Ownership & Outstanding Awards (as of 12/31/2024)
| Item | Amount |
|---|---|
| Shares beneficially owned | 12,508,772 (3.2% of class) |
| Unvested RSUs and market values | 3,000,000 ($6,060,000); 31,361 ($63,349); 166,642 ($336,617); 649,079 ($1,311,140); 983,502 ($1,986,674) |
| Upcoming vest dates (key) | 3/8/2025, 3/15/2025, 12/13/2025, 3/8/2026, 3/8/2027 |
Compensation Structure Analysis
- Pay-at-risk orientation: Significant equity-based LTI with multi-year vesting, short-term incentives tied to revenue and Adjusted EBITDA; ownership guidelines reinforce alignment .
- No excise tax gross-ups; no single-trigger equity acceleration for NEOs generally (limited special case for 2022 CEO RSU grant); no option repricing/backdating .
- Anti-hedging/pledging and clawbacks reduce misalignment and excessive risk-taking .
Employment Terms (Severance/CoC Economics)
| Scenario | Cash | Equity | Benefits | Notes |
|---|---|---|---|---|
| Without Cause / Good Reason | Base + Target Bonus | Accelerated vesting | Up to 12 months | Pro-rated bonus in year of termination |
| Change-of-Control (general) | — | Double-trigger acceleration for RSUs upon qualifying termination within 1 year | — | Governance-friendly structure |
| Change-of-Control (special 3/21/2022 grant) | — | Single-trigger vest on certain Rule 13e-3 purchase | — | Grant time-vested on 3/21/2025 |
Investment Implications
- Alignment and retention: High at-risk pay with rigorous non-GAAP revenue and Adjusted EBITDA targets drove a 138.2% Business Performance rating; RSU schedules and 5x salary ownership guideline support alignment, while anti-hedging/pledging and clawbacks mitigate risk .
- Supply overhang watch: Material RSU vest events in 2025–2027 could create episodic selling pressure; monitor Form 4s/10b5-1 plans around 3/8 and 3/15 dates .
- CoC asymmetry: The unique single-trigger vest for the 2022 3,000,000 RSU grant introduces potential windfall optics in a take-private scenario; otherwise, double-trigger standards apply .
- Governance mitigants for dual role: Independent Lead Director, executive sessions, and committee independence temper CEO-Chairman concentration; however, Altria’s governance and approval rights remain a structural factor for strategic moves .
- Execution trend: Revenues growing and EBITDA losses narrowing through FY2024 suggest operational improvement under current strategy; continued delivery against GrowCo expansion milestones and brand mix are key catalysts (see Financials and operating highlights) [GetFinancials] .