William Morachnick
About William Morachnick
Chief Executive Officer and Director of Charlotte’s Web Holdings (CWBHF). Age 61; CEO and director since September 13, 2023. Background includes leadership at Eastman Kodak (Director, Consumer Products Asia-Pacific), founder/President of Tsunami International, and CEO of Santa Fe Reynolds Tobacco International (2009–2016; sold to Japan Tobacco for $5B cash in 2016). Education: B.A. University of Maryland; MBA, Thunderbird School of Global Management . As an emerging growth company, CWBHF has not held U.S. “say‑on‑pay” votes; governance oversight rests with independent Chair Angela McElwee; Morachnick is not independent .
Revenue and EBITDA trend across his tenure:
| Metric | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue ($) | 15,845,000* | 12,124,000* | 12,289,000* | 12,587,000* | 12,667,000* | 12,262,000* | 12,806,000* | 11,503,000* |
| EBITDA ($) | -6,148,000* | -5,876,000* | -9,656,000* | -3,497,000* | -2,979,000* | -2,899,000* | -3,560,000* | -3,565,000* |
| Values retrieved from S&P Global.* |
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Eastman Kodak Company | Director, Consumer Products Asia-Pacific | Not disclosed | Regional leadership in consumer products |
| Tsunami International, Inc. | Founder & President | Not disclosed | Built growth strategies for U.S. and overseas markets |
| Santa Fe Reynolds Tobacco International | CEO | 2009–2016 | Led rapid international expansion to 20+ countries; sold to Japan Tobacco for $5B cash in 2016 |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Euroflex USA | Co-owner | Founded 2022 | Operating role outside CWBHF |
| Omega Life Sciences portfolio cos. (Tel Aviv) | Director (multiple operating companies) | Not disclosed | Board service outside CWBHF |
Fixed Compensation
| Component | 2023 | 2024 | Notes |
|---|---|---|---|
| Base salary ($) | 117,692 | 450,000 | CEO appointment Sept 13, 2023 |
| Cash bonus ($) | 150,000 (guaranteed for 2023 plan year) | 150,500 | 2024 bonus paid under discretionary performance program |
| Other comp ($) | 13,259 | 75,133 | Includes vehicle lease, insurance, 401(k) match, relocation |
Performance Compensation
- Annual bonus framework: Committee uses discretion considering leadership and performance; specific performance metrics, weightings, and targets were not disclosed for 2024 .
- Long-term incentives: Primarily time-based RSUs under the 2018 LTIP; no performance share units (PSUs) disclosed for the CEO .
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Annual bonus metrics | Not disclosed | Not disclosed | Not disclosed | $150,500 (2024) | N/A (cash) |
| LTIP RSUs (CEO) | N/A (time-based) | N/A | N/A | N/A | Quarterly vesting over 12 quarters (see Equity Grants) |
Equity Grants, Vesting & Potential Selling Pressure
| Grant type | Grant date | Shares/Units | Vesting terms | Status at 12/31/2024 |
|---|---|---|---|---|
| RSU | 9/13/2023 | 500,000 | Immediate vesting | Fully vested |
| RSU | 10/12/2023 | 4,500,000 | Equal 1/12 quarterly increments beginning 12/31/2023 | 2,625,000 unvested remaining |
- Implications: Time-based RSUs vest quarterly through the remaining schedule, which can create supply overhang as units settle; award terms are not performance-conditioned, so vesting is not contingent on operating or TSR outcomes .
- Company accelerated vesting for certain executives (not including CEO) on Feb 1, 2024, signaling a retention/dilution lever the board can use if needed .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 1,896,141 common shares (1.2% of outstanding as of 4/15/2025) |
| Unvested CEO RSUs outstanding | 2,625,000 (from the 4.5M grant) |
| Options (CEO) | None disclosed |
| Pledging | None of such shares are pledged (per beneficial ownership footnotes) |
| Hedging | Prohibited by Insider Trading and Reporting Policy |
| Share ownership guidelines | CEO required to hold 3x base salary; five-year compliance window from appointment |
| Alignment view | High equity mix but time-based RSUs; absence of disclosed performance-conditioned equity reduces tight pay-for-performance linkage |
Employment Terms
| Term | Key provisions |
|---|---|
| Start date & status | Employed as CEO at-will effective Sept 13, 2023 |
| Cash & equity at hire | $450,000 base; 500,000 RSUs (immediate vest); 4,500,000 RSUs (12 quarterly tranches starting 12/31/2023); guaranteed $150,000 2023 bonus |
| Severance (termination without cause) | 12 months base salary + pro‑rated target bonus for year of termination |
| Change-in-control (termination after CoC) | 24 months base salary + pro‑rated target bonus for year of termination |
| Equity treatment on CoC | Awards terminate at effective time unless assumed/continued; if not assumed, certain awards become fully vested and exercisable immediately before effectiveness (plan terms) |
| Company-wide CoC plan (context) | Separate executive Severance Plan provides 6/9/12 months base by level; CEO/CFO would be at 12 months within 12 months post-CoC; CEO’s employment agreement provides higher CoC protection noted above |
| Clawback | Policy allows recoupment of incentive comp upon misconduct causing a restatement; after-tax calculation of excess |
| Insider trading | Windowed trading; no hedging; limited exceptions as specified |
Board Governance (Director Service, Committees, Independence)
- Director since Sept 13, 2023; not independent (as CEO). Board currently has an independent Chair (Angela McElwee), separating Chair/CEO roles, which mitigates typical dual-role concerns .
- Committee roles: None. Independent committees (Audit Chair: Usifer; Comp Chair: McCarthy; CG&N Chair: McElwee) .
- Board attendance: Board held 12 meetings in 2024; each nominee attended 100% except McElwee and McCarthy absent one—implying Morachnick attended 100% .
- Director compensation: Employee-directors receive no additional director pay; Morachnick received none as director .
Director Compensation (Board-wide context)
- Non-employee director fees/equity not itemized in the excerpts; employees (including CEO) receive no additional director compensation .
Performance & Track Record During Tenure (selected company actions)
- Extended MLB partnership through 2027 (aggregate remaining rights fee $23M) .
- Formed DeFloria JV with AJNA and BAT; FDA allowed DeFloria to proceed to Phase 2 trials (Feb 2025) .
- Product expansion: functional mushroom gummies (Sept 2024) .
- Auditor change to PKF O’Connor Davies (Aug 2024) .
Compensation Committee Analysis
- Members (2024): McCarthy (Chair), Usifer, McElwee—each independent under Nasdaq and Canadian rules .
- Consultant: Pearl Meyer & Partners LLC used in compensation decisions .
- Philosophy emphasizes market-competitive pay, significant equity, and Committee discretion; no detailed 2024 metric goals or weights disclosed .
Risk Indicators & Red Flags
- Regulatory overhang: FDA stance (CBD not lawful in foods/dietary supplements; IND preclusion), historical FDA Warning Letter remains open; potential FTC scrutiny of health claims .
- Related party/affiliates: DeFloria JV with AJNA (co-founded by former insiders) and BAT debenture/investor rights (board designee) .
- Equity structure: Material time-based RSU overhang and historical acceleration for certain executives (not CEO) can create settlement-driven selling pressure .
- Independence: Half of directors independent; Atwood is BAT designee; Jared Stanley not independent; CEO not independent .
Ownership and Beneficial Holders (context)
| Holder | Shares / % |
|---|---|
| William Morachnick | 1,896,141 (1.2%) |
| BT DE Investments Inc. (subsidiary of BAT) | 31,564,936 (19.9% on conversion of debenture) |
| Stanley/Kehler shareholder group | 11,649,004 (7.3%) |
Employment & Contracts (Additional)
- EGC status: Not required to conduct U.S. say-on-pay or frequency votes at this time .
- D&O insurance and indemnification in place .
Investment Implications
- Pay-for-performance alignment: CEO equity is sizable but time-based (no disclosed PSUs/TSR metrics), which weakens direct linkage to operating/TSR outcomes; however, quarterly vesting supports retention through 2026 and keeps leadership incentivized on equity value preservation .
- Selling pressure: Continuing quarterly RSU settlements could create supply overhang, particularly absent performance gates; monitor 10b5-1 activity and Form 4s for actual dispositions .
- Downside protection: Double-trigger CoC severance at 24 months base plus pro‑rated target bonus is robust; equity may accelerate if not assumed, which can be shareholder-dilutive in change events .
- Governance: Independent Chair and independent committees mitigate CEO/Director dual-role risks; however, strategic investor (BAT) influence via board designee persists; keep watch on related-party dynamics and capital structure optionality .
- Execution risk: Company operates under significant FDA/FTC uncertainty; leadership’s CPG background and recent commercial milestones (MLB extension, new products) may help, but regulatory outcomes remain key to value realization .
Citations
- CEO bio, roles, education, and appointment:
- Board composition, independence, committees, attendance, chair:
- Compensation summary and employment agreement terms:
- Outstanding equity awards and vesting:
- LTIP structure and acceleration:
- Annual bonus framework:
- Clawback, insider trading/hedging, ownership guidelines:
- Beneficial ownership and pledging:
- Severance/CoC provisions:
- Director compensation (employee directors):
- Company actions (MLB, DeFloria, products, auditor):
- Regulatory risks (FDA/FTC/DEA):
Notes
- Revenue and EBITDA figures marked with an asterisk are sourced from S&P Global consensus/standardized datasets via GetFinancials. Values retrieved from S&P Global.*