New details have come to light about the ongoing dispute between the founders of CDA Health and Cronos Australia, as both sides gear up for a fraught shareholder meeting scheduled for next month.
In its annual general meeting notice, Cronos disclosed that it had terminated former chief medical officer and director Dr Ben Jansen, citing "a repeated pattern of inappropriate behaviour, lack of judgement and poor performance".
The company had announced in June that the CDA co-founder would be leaving his medical role, though it gave no reason at the time. He formally left the company in September.
Cronos chief executive Rodney Cocks and executive director Guy Headley have separately faced accusations from Jansen's wife, Elizabeth, who alleged their pay arrangements amounted to a "conflict of interest and nepotism".
Ben Jansen's cousin, Matua, has put forward a resolution to remove Cocks and Headley from the board, arguing for the "complete separation of the board and executive management".
A second resolution that would have seen Ben Jansen reinstated as a director was withdrawn by his wife last week. In a letter to shareholders, she explained the couple "need a break from the business to spend more time with our family".
Elizabeth Jansen, acting as trustee for Stanford Investment Trust, is the largest single shareholder in Cronos with a 23.43% stake, while Matua Jansen holds 9.93% through the Whanau Family Trust.
The resolution needs 50% shareholder support to pass.
At the heart of the Jansen family's complaints are bonus payments of $92,000 paid to Cocks and Headley on top of their salaries and share options.
In her letter, which defended her husband and expressed backing for Matua's resolution, Elizabeth Jansen claimed there was "no independent committee who reviewed KPIs (Key Performance Indicators) or possible bonuses, or even judged whether KPIs were met". She also alleged that Cocks and Headley each voted in favour of the other's bonus.
"These unnecessary cash bonuses would have been better spent in company expansion, for example spending on the now delayed Canview 2.0 and now increased expenses from the Canview 2.0 roll out, or on the delayed drug registration," she wrote.
Jansen also described her husband as a "brilliant doctor" who was the "original founding director of Cannabis Doctors Australia".
"Ben has lectured, taught and tirelessly worked on behalf of the company since its inception" she wrote. "Ben is honourable and outspoken which… had put him in conflict with those who have sought to pay themselves more and more money and benefit. Ben is about patients-over-pay."
Cronos rejected the claims as the "attempt of a disgruntled former executive to reshape the narrative and misconstrue the truth".
"In the board's view, it contains mistruths, half-truths, and selective omissions in an attempt to besmirch and harm the reputation of the company, its board and its executives," Cronos said.
"This is done at a time when the company has delivered strong operational and financial results for shareholders and declared its first-ever dividend."
Among those who benefited were the Jansens themselves, who received a fully-franked dividend of more than $1.25m "in respect of the shares held by E. Jansen in which Benjamin Jansen has a relevant interest", the company noted.
In calling on shareholders to vote against the resolution, Cronos said it "categorically rejects" any suggestion that "mercenary executives" had diverted funds away from strategic projects.
The company pointed out that the executive incentive arrangements now being disputed had previously received Elizabeth Jansen's support while her husband was still a director.
"Benjamin Jansen… also received similar incentives during this time," Cronos added, noting that all remuneration packages had been set out in the Cronos-CDA Health merger document at the end of 2021.
Cronos also took direct aim at Matua Jansen's resolution. In his own letter to shareholders, Matua had argued that there must be a "complete separation of the board and the executive to avoid conflicts of interest regarding wages and incentives paid".
"Furthermore, I believe that only a committee of non-executive directors should oversee the remuneration packages of the executive," he added.
Cronos countered that its nomination and remuneration committee is already "comprised entirely of independent non-executive directors and does not include the two executive directors M. Jansen is proposing to remove".
It added: "Cronos Australia supports the widely accepted view that the board should comprise a majority of independent directors. The current board satisfies this requirement with 60% of the current directors, including the interim chair, being independent".
The "overarching reason" shareholders should vote down the resolution, it said, is that Cronos "not only meets all of the external requirements for good governance, but also includes an appropriate balance of oversight and detailed knowledge of the company and its operations".
Ben Jansen has been approached for comment.
