Salaries for the chief executives of the world’s three largest cruise companies totalled almost $50m in 2018, up 36% over 12 months.
The jump came primarily in the form of stock bonuses.
Frank del Rio, chief executive of Norwegian Cruise Line Holdings (NCL), more than doubled his pay package of $10.5m last year, largely due to the company returning greater value to shareholders.
Of $22.6m in earnings, he recieved $20.6m in stocks, options and “non-equity incentive plan compensation”, according to US Securities and Exchange Commission (SEC) filings. This was up from about $9m in incentives in his 2017 package.
Stock values
The pay hike was mostly due to the value of stock awards quadrupling to $15.3m, based on share price and performance-based share vesting, as determined by a compensation committee.
NCL’s full-year adjusted earnings per share was $4.92 for 2018, up 24% from the prior year.
Other noted NCL achievements for 2018 include earning record revenue of $6.1bn, up 12% from 2017, and record net income of $955m versus $769m a year earlier.
“Frank del Rio has done a good job in getting a premium price for a premium cruise experience,” Tigress Financial Partners analyst Ivan Feinseth said.
Top executive salaries are derived through a complex matrix that considers factors such as fiscal performance, peer-company salaries and goal attainment.
Carnival Corp chief executive Arnold Donald pocketed the second-highest payout of $13.5m, of which $11.7m was stocks and incentives.
His stock awards for 2018 went up 3% to $7.03m, while his incentive pay from Carnival ticked up 7% to $4.69m.
He made a slightly smaller salary of $13.1m the previous year, taking in $11.7m in stocks and incentive awards.
Record revenue
Carnival listed record revenue of $18.9bn, up 8% from the previous year, and a 23% jump in fiscal net income to $3.2bn from 2017 among its accomplishments.
Royal Caribbean Cruise Line chief executive Richard Fain’s salary fell just short of Donald’s haul and included $11.2m in company shares and incentive pay.
His total 2018 salary of $12.4m was slightly less than the previous year’s earnings of $13.3m.
Fain’s stock awards remained flat year-over-year at $7.7m, while his incentive pay fell 19% to $3.5m.
The company posted record adjusted earnings per share of $8.86 for 2018 but net income slipped to $1.8bn from $1.9bn.
'Not material'
Sanford C Bernstein analyst David Beckel would not comment on why shareholders approved these payouts but did say they have negligible effect on the bottom lines.
“The amount of year-over-year change in pay is not material for any of the companies, but given Norwegian [Cruise Line]’s smaller size, it has more of an effect on EPS [earnings per share] than the others,” he told TradeWinds.
