It would seem all the cutbacks are working.....

Do you folks not interact with any other large public companies more than once or twice a year which I imagine is the norm for the average poster on here?

Executive compensation is something you can take issue with, but you all talk about Del Rio like his comp is a line item on your NCL invoice or onboard statement.

Another reason why everyone should hold their own and move to another cruise line. Or stay here and be nickel and dimed just so the top can make more. It's obvious that customers don't come first with NCL

Do you folks not interact with any other large public companies more than once or twice a year which I imagine is the norm for the average poster on here?

 

Executive compensation is something you can take issue with, but you all talk about Del Rio like his comp is a line item on your NCL invoice or onboard statement.

There seems to be quite the discrepancy between two other top cruise lines and NCL's executive compensation.

Here's the pattern: Make lots of cuts to maximize profitability. The short term gains allow you to hit your performance bonuses. However, the long term affects are damaging. Eventually you sink the company, but it doesn't matter since you leave with a golden parachute. Worked for the CEOs of HP.

What ever happened to the former CEO Kevin Sheehan?

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What ever happened to the former CEO Kevin Sheehan?

http://people.equilar.com/bio/kevin-sheehan-new-media/salary/877961

Kevin is a good guy. He wouldn't put up with FDR's cuts so he quit.

What ever happened to the former CEO Kevin Sheehan?

Same chart shows he got about 17 million in 2014.

There's a post elsewhere that does a pretty good job of explaining how the CEO really has a salary of 1.8 million and the rest in stock grants (worth whatever the stock is worth) and stock options which can be worth $0 (or a negative amount if the stock falls below the option price).

If you want to be paid that much, apply for the job. Even Del Rio was able to land it.

Interesting post. I am also curious about the discrepancy between what Del Rio made and what the CEOs of two, much larger companies made. Perhaps someone with a corporate background could explain what made the NCL "Stock Awards" and "Option Awards" so high.

The President of the United States earns $400,000. + $100,000 for other expenses. Go Figure.

Well, companies will offer whatever they feel they need to offer to attract the employees they want. Whether or not he's actually worth the price they paid is up to the shareholders, not us. But rest assured, they didn't give him 30 million simply because he's just such a swell guy.

There seems to be quite the discrepancy between two other top cruise lines and NCL's executive compensation.

Actually there is not. I went through this in depth on another stream but here is basically what I put there. You have to separate out the types of compensation and when it actually can be received by the recipient. The majority of his compensation is in options (only of value if the stock goes up) and restricted stock (vests over a multiyear period.

Here are more detailed posts. The first compares Del Rios compensation with Sheehans

Del Rio's package is $1,837,500 in salary, 1,903,799 in incentive plan.

The rest is 10,276,315 in stock awards and $17,752,083 in option awards.

The stock awards and the option awards value are dependent upon future stock value since both are restricted. The end value of those are in alignment with the shareholders and can be considerable reduced if the stock does not appreciate. For example if the stock does not go higher then what it was at when the options were granted that $17,752,083 would end up having $0 value. To get any money from that portion requires that the stock goes up. The $10,276,315 in stock awards do have value (the current price of the stock) but they are restricted and will vest over a period (probably 5 years). So you can consider those more in the $2 mil per year in actual compensation plus stock appreciation starting next year. So actual money received in 2015 was $3.7 mil.

If you look at Sheehans compensation over the last two years his total compensation was around 31 million with $16 million in options and 2 million in stock awards. I would expect that he had previous amounts in each category but not as easily available to look up.

So Del Rio's compensation for 14,15 total was $34 million with 18 in options, 10 in restricted stock and $6 in salary and bonus

Sheehans compensation for his last two full years 13,14 was $32 million with $16 in options, 2 in restricted stock, and 13 million in salary, bonus and other compensation.

As such Del Rio's compensation is in line with what was paid for the previous President/CEO

This one compares his with Carnivals CIO

The Arnold Donald CEO of Carnival received in 2015 $1,000,000 in salary, plus 4,618,950 in non-equity incentive plan compensation, plus $227,000 in other compensation for a total of 5.8 mil in 2015. Plus he has been consistently getting stock awards for the past three year from 5.8 mil in 2013, 3.5 in 2014, and 3.5 in 2015. Since he has been CEO for a while I would suspect from those number that they are probably replacing the stock that vests each year to keep his forward looking incentives constant. So in cash value between maturing stock and cash compensation he probably realized around 9.3 million in 2015 compared to the 3.7 in value that Del Rio received in the same year. Now next Year Del Rio will go up to at least 5.7 mil as his first stock allocation vests.

So in terms of actual money taken home he is less getting less then Arnold Donald, but has the potential to catch up in future years if the company does well.

Also note that RCL Richard Fain's number seem to be similar to Arnold Donalds.

In some ways CEO compensation is a lot like sport contracts. A lot of the number is not realized until future years and may not happen. The reported compensation is a calculated figure based on total value of the package, not the dollars actually received in that year. The first year numbers will be high because they include the initial allocations of stock options and restricted stock, In later years the allocations will be much smaller to preserve the link between compensation and future stock value.

Interesting post. I am also curious about the discrepancy between what Del Rio made and what the CEOs of two, much larger companies made. Perhaps someone with a corporate background could explain what made the NCL "Stock Awards" and "Option Awards" so high.

It is his first year as CEO. The intent of those categories is to establish future compensation that is tied to stock performance. The other two CEO's have been in place for a few years so you are seeing their awards that replace the stock awards that have vested to keep their future compensation value tied to future stock performance.

Interesting post. I am also curious about the discrepancy between what Del Rio made and what the CEOs of two, much larger companies made. Perhaps someone with a corporate background could explain what made the NCL "Stock Awards" and "Option Awards" so high.

They were high because the stock was doing well when the awards were made, and there were a lot of shares involved. They are worth less now. So, one thing to remember is if someone is granted stock, they don't get money, they get stock. Stock values fluctuate. With options, they get the right to buy stock at a pre-defined price. Options are only worth the difference between the actual price and the option price.

I once was granted stock options at $230 per share and I was never able to exercise them, because the stock was below $100 when the options vested and the stock never rose above $230 before the options expired. Why buy stock for $230 per share if you can buy it I the market for $120 per share? Therefore, it is possible to get options that are worthless in the long run. This means a CEO with options is going to pay a lot of attention to the stock price over time. He also may stick around to make sure the company is on track.

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what a pointless post. Nothing more childish then a grown adult posting and gripping about what another person makes.

39 million is chump change compared to the earnings of the company. Frankly his compensation is low.

Hold on.... go ahead, tell me how he doesn't NEED to make that much especially now that you have to pay for food to your room. Shame on him.....

Let it go people..... go on and live your lives and stop worrying about what other people do or make.

They were high because the stock was doing well when the awards were made, and there were a lot of shares involved. They are worth less now. So, one thing to remember is if someone is granted stock, they don't get money, they get stock. Stock values fluctuate. With options, they get the right to buy stock at a pre-defined price. Options are only worth the difference between the actual price and the option price.

 

I once was granted stock options at $230 per share and I was never able to exercise them, because the stock was below $100 when the options vested and the stock never rose above $230 before the options expired. Why buy stock for $230 per share if you can buy it I the market for $120 per share? Therefore, it is possible to get options that are worthless in the long run. This means a CEO with options is going to pay a lot of attention to the stock price over time. He also may stick around to make sure the company is on track.

 

 

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And thus why we see Frank Del Rio's focus is on NCLH stock appreciation through profit increases. This is the new Norwegian Cruise line norm. Cutbacks, new fees, higher old fees, not renewing brand contracts, price increases, promotional gimmicks to attract less savvy customers etc..

And thus why we see Frank Del Rio's focus is on NCLH stock appreciation through profit increases. This is the new Norwegian Cruise line norm. Cutbacks, new fees, higher old fees, not renewing brand contracts, price increases, promotional gimmicks to attract less savvy customers etc..

you have experience running publicly trading billion dollar business? You speak like you do.....

You give a new CEO heavy stock options on the front end so any changes, decisions, etc he makes with the business he having long and lasting effects on his own net worth. that doest mean there is an immediate focus on the "dollar"... maybe the stock was poorly positioned when he took hence he is trying to shore it up and make it a worth buy for investors. His stock options arent about 2-5 year gains.... Providing a CEO with that much stock is to force him to create 10-20 year stock value for the company... and his self. Stock value isn't some made up make believe idea... its based on company value, long term and short term growth, profits, market position, consumer value, etc. He has to build a strong company to build a strong stock. He has already impacted grwth pretty substantially with the changes implemented. He has positioned the company to steal market share from other lines by making it price point competitive.

profits are up, costs are down, sailing bookings are up. Please explain to me what you believe to be successfully running a business if that's not because I am at a loss.

NCL about 10 year ago was a crucial point... it almost disappear from relevance from major line competition but it didn't. Every change a line makes while it may impact how YOU like your service (hence its your decision to book with them or not) .....those decision are not all about you. Honestly I don't think services have changed all that much.... what I think has changed is the american me me me attitude has been amplified so much that americans can no longer be pleased and there is no longer reasonable understanding.

 

There's a post elsewhere that does a pretty good job of explaining how the CEO really has a salary of 1.8 million and the rest in stock grants (worth whatever the stock is worth) and stock options which can be worth $0 (or a negative amount if the stock falls below the option price).

 

Stock options would not be worth "negative"--they would expire unexercised.

Stock options would not be worth "negative"--they would expire unexercised.

They don't have to be left unexercised. You can certainly exercise stock options and lose money if you want to. I can't think of a reason you would want to unless you really, really want the shares at any price.

I never understood the fascination with someone's salary. Who cares!

Del Rio compensation is old news. I do know that Sheehan has been consulting with Royal though. Seems that he's pulling some crew from NCL. Royal is hiring crew and he came up with the idea to build condo's in the Philippines. If the crew member gives part of their compensation toward the condo payment, they will own the condo in a few contracts. From what I heard it's working.

Del Rio compensation is old news. I do know that Sheehan has been consulting with Royal though. Seems that he's pulling some crew from NCL. Royal is hiring crew and he came up with the idea to build condo's in the Philippines. If the crew member gives part of their compensation toward the condo payment, they will own the condo in a few contracts. From what I heard it's working.

Wow - Sheehan going to RCCL would be huge news! What has kept us coming back to NCL over and over again is the outstanding service by the crew. That started under Sheehan. What made us leave RCCL was the subpar service. I am very interested to see if this actually happens.

Wow - Sheehan going to RCCL would be huge news! What has kept us coming back to NCL over and over again is the outstanding service by the crew. That started under Sheehan. What made us leave RCCL was the subpar service. I am very interested to see if this actually happens.

He can't work for any other line directly for a couple of years due to his termination agreement. So, he consulting now. Who knows what will be happen down the road though.

He can't work for any other line directly for a couple of years due to his termination agreement. So, he consulting now. Who knows what will be happen down the road though.

Makes sense. Thanks for the clarification!