Carnival Corporation

Meeting Date: April 6

Arnold W. Donald, CEO of the troubled Carnival Corporation, received total compensation of $11,149,514 in 2018. Included in this package were generous perquisites that many shareholders object to. These included private medical health insurance costs ($59,323), driver and security ($21,482), automobile lease ($12,099). In addition, he received $131,616 in “aggregate incremental cost to Carnival Corporation & plc for travel on the Aircraft not related to company business.”

The company policy is that only Donald can use the aircraft for personal use up to $200,000 per year.  However, in general, guests may accompany executives when traveling for business purposes.

It is hard to tell how accurate these “incremental charges” are. This is an area ripe for financial engineering.

More objectionable for shareholders may be the $1 million cash fee paid to board member Mickey Arison. He was CEO of the Carnival Corporation from 1979 to 2013 and has significant stock holdings. In fact, he controls 19.1% of voting power, which should be adequate to motivate him without the extra cash payment, far beyond what other board members receive.  

The extraction of cash from the company is particularly problematic now as the company struggles.

There have been press reports that raised the question of whether Arison’s connection with Trump, and personal lobbying efforts, played a role in a slow response to shut down the cruise industry even as it was becoming apparent that such ships were a dangerous place during the pandemic. A Washington Post article on March 24 had a headline that said it all Carnival’s CEO says cruise ships aren’t riskier for getting sick. Public health experts tell a different story. When the immediate crisis is over, it is likely that Carnival will face significant lawsuits.

Carnival Cruises has 110,688 employees. Half of them are paid less than $15,430 per year. The pay ratio of the CEO to median employee is 723:1.

Some CEOs from similarly challenged industries have stepped forward to reduce their compensation and support their workers. Wynn Resorts CEO is foregoing his cash salary in exchange for stock compensation and that cash will be used to pay workers. John Asher, CEO of William Hill, a sports betting enterprise in Las Vegas, has donated his entire salary to a foundation to support employees.

At this time there have been no similar announcements from Carnival.