Annual meeting April 8, 2022

Carnival CEO Arnold McDonald’s total compensation for 2021 was $15,063,788. His salary – temporarily reduced last year – returned to $1,500,000. Most of the 11 percent increase in total compensation came from a $6,000,000 cash incentive compensation based on qualitative analysis. In 2020, appropriately, McDonald did not receive an annual bonus. In the most recent year, McDonald received twice his target bonus.

Rather than the quantitative goals it had used in the past, the Compensation Committee set qualitative priorities: (1) cash management, (2) return to service, (3) compliance and culture, and (4) maintain our long-term commitment to the environment and our ESG (Environmental, Social and Governance) goals.

According to a press report, the company has faced sanctions of over $60 million with regards to a decade of pollution charges. While on probation since 2017 from dumping oil in Alaska, the company paid another criminal penalty of $20 million for dumping plastic waste in the Bahamas. As recently as January 2022, the company had paid a $1,000,000 fine after it was found to be violating the terms of its probation. “The U.S. Department of Justice (DOJ) stated in a press release on January 11, 2022 that Princess Cruises and its parent Carnival Corporation have ‘a culture that seeks to minimize or avoid information that is negative, uncomfortable, or threatening to the company, including to top leadership (i.e., the Board of Directors, C-Suite executives and Brand Presidents/CEOs).’” This stands in direct contrast to the idea that ESG goals have been achieved at twice target levels.

In addition, the company moved from an entirely performance-based equity program to one with time-based shares. These shares will have value, even if the company’s losses continue.

The proxy statement attempts to justify its payments saying it couldn’t set operating income goals because, “we have never previously experienced a complete cessation and subsequent gradual resumption of our guest cruise operations.”

It is safe to say that until this year no one had experienced a global pandemic quite like this one. Yet this is not persuasive for why a large cash bonus should be awarded. The fear that an employee will be poached by another company is diminished by the fact that the problems are industry wide.

These payments for employment during financially devastating times came even as the salary of the median employee fell to a devastating $8,658 per year, leading to an increased pay ratio of 1,740 to 1.