Former NCL Cruise Executives Square Off in Trial in Miami-Dade Courthouse: But What About the Dead Filipino Crew Members?

Former Norwegian Cruise Line ("NCL") CEO Colin Veitch's trial against his successor, Kevin  Sheehan, and their old cruise line, NCL, for defamation and breach of contract has been underway in the Miami-Dade County courthouse, here in Miami, Florida this past week.

Veitch worked at the helm of NCL from 2000 to 2008. According to Travel Weekly, Veitch was the architect of "Freestyle Cruising" and undertook an ambitious fleet renewal program, purchasing nine new cruise ships. By some accounts, but  not all, Veitch was an innovative cruise executive who was successful in beginning the transformation of under-performing old cruise ships into a larger and far more profitable fleet. 

Veitch turned the revitalized cruise line over to Sheehan in 2008. Things turned sour between the two NCL Colin Veitchrich cruise executives after a travel periodical, Travel Weekly, wrote a glowing article in December of 2014 about Veitch and his success at NCL. Sheehan then sent an email to Travel Weekly mocking the article and criticizing Veitch. The Miami Herald reported at the time, quoting the lawsuit allegations, that Sheehan sent a “vindictive, false and defamatory” email to Travel Weekly which eventually published. A few days later, Travel Weekly retracted the complimentary article about Veitch.

Veitch then sued Sheehan and NCL alleging defamation, as well as breach of contract, claiming that his former cruise line and its new CEO allegedly cheated him out of revenue sharing. 

The overblown 187-page lawsuit which you can review here is, in my opinion, a rather fascinating insight into the hurt-feelings and out-of-control personalities of two multi-millionaire former NCL cruise executives.

The lawsuit which Veitch filed against Sheehan included allegations which have been characterized by the Skift travel publication as "incendiary" accusations that Mr. Sheehan engaged in “a long pattern of personal and professional misconduct and recklessness, stunning in its scope and hubris, corrosive and detrimental in its impact on the company, and deeply undermining of the workplace culture . . . ” 

In response, Mr. Sheehan and NCL asked the court to strike what they characterized as "immaterial, impertinent and scandalous" allegations. 

The bitter personal allegations between these two former cruise executives arise from a nasty dispute between two very wealthy former cruise executives.  When Mr. Veitch resigned from NCL's parent company, Star Cruises, he reportedly received $10,000,000 as part of a severance package. He also settled a $300,000,000 lawsuit which he filed against Sir Richard Branson and the Virgin Group after he alleged that the British billionaire and his company stole his ideas for a new cruise project. The precise amount of money that Veitch pocketed is confidential. 

Kevin SheehanSheehan also received a severance package from NCL in 2015 after it terminated his employment, totaling $13,400,000.

The many articles written by trade publications and major newspapers in Miami. like the Miami Herald and the Miami New Times, have covered the Veitch-Sheehan squabbles at length, but they are ignoring the biter irony of the litigation. Veitch was the NCL CEO in 2003 when a decrepit, poorly maintained steam boiler on NCL's 40+ year-old SS Norway exploded at the port of Miami. The explosion killed eight crew members and seriously burned another nineteen NCL crew members.

The National Transportation Safety Board ("NTBS") concluded that the deadly boiler explosion was caused by NCL's "improper operation, maintenance and inspection" of the old cruise ship's steam chamber. The old boiler had "extensive fatigue cracking" and deteriorated materials that weakened the metal and caused it to rupture under pressure. The NTSB reported that NCL was aware of the dangerous condition but failed to take action to fix the problem. 

CEO Veitch tried to deflect blame but NCL was forced to plead guilty to a criminal charge of gross negligence regarding the explosion. The Norway was subsequently sold for scrap.

When the families of the eight dead crew members who were scalded to death filed suit in Miami to obtain compensation for the loss of their fathers and husbands, Veitch's lawyers argued that the crew members were not entitled to file suit before a judge and jury in Miami. Instead, NCL argued, because the crew members were Filipinos, their loved ones had to pursue the extremely limited death benefits pursuant to the arbitration process in the Philippines. 

Kicking "foreign" (i.e., non-U.S.) crew members out of the American legal system was unprecedented.  Foreign crew members injured or killed due to the negligence of U.S. based shipping companies have long been permitted to have their cases resolved through jury trials under the Jones Act here in the U.S. In addition to the Jones Act, crew members have also been entitled to obtain medical treatment and daily living expenses when they are injured aboard U.S. based cruise ships Norway Boiler Explosionunder the "maintenance and cure" doctrine, one of the oldest legal American legal doctrines dating back to the early 1800's. 

But NCL, which faced substantial liability and damages for the deaths of eight crew members and nearly twenty other ship employees burned in the explosion, sought to dismiss the cases, arguing that their only remedy was the limited benefits under the Filipino law. NCL argued that Miami was not the proper location to resolve the dispute even though it is based in Miami and the deaths occurred at the port of Miami.  In Batista v. Star Cruises, our federal court agreed with NCL and sent the cases to Manila, where Filipino law limited the widows to just $50,000 and the children to just $7,500 for the loss of their dead husbands/fathers.

Like "freestlye cruising," NCL's unprecedented legal posturing has also been copied by NCL's competitors Carnival, Royal Caribbean and all other cruise lines, which quickly inserted one-sided arbitration clauses into their crew member employment agreements to escape or limit their liability when things go wrong on the high seas. 

Except for Disney Cruises, all other cruise lines prohibit injured crew members from having their cases heard by juries in the U.S. legal system. Filipino seafarers are especially susceptible to being screwed by the Miami-based cruise lines, thanks to NCL's efforts which started under Veitch's tenure. 

During the trial last week at the Miami-Dade courthouse, where NCL crew members are barred from filing suit, Veitch's lawyer reportedly asked the jury to consider awarding $95,000,000 in damages, according to Court View Network (CVN). That may be a proper amount to finally compensate the families of the eight Filipino crew members who were burned to death on the SS Norway back in 2003, but it seems to be an awful lot for a healthy, millionaire former cruise executive with hurt feelings. 

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Photo credits:

Colin Veitch: Associated Press via the Honolulu Star-Bulletin

Kevin Sheehan: REUTERS/Brendan McDermid.

SS Norway: News7 Miami via CBS News video.

RCCL Chairman Richard Fain Cashed Stock Worth Around $2,500,000

Richard Fain Royal Caribbean Royal Caribbean top executive Richard Fain reportedly sold 20,000 shares of Royal Caribbean (RCL) stock this week for a total amount of approximately $2,500,000.

In a transaction this past Monday, November 13th, he sold his shares at an an average price of $123.76, for a total value of $2,475,200.00. CEO Fain officer reportedly now owns 895,416 shares of his cruise company’s stock, valued at around $110,816,684.16. 

In August 2017, Mr. Fain sold over $24,000,000 of Royal Caribbean stock. 

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Interested in this issue? Read Cruise Executive Richard Fain Hits the Jackpot Again.

Photo Credit: Royal Caribbean Press Center

COO Goldstein Sells Over $14,000,000 in Royal Caribbean Stock

Richard Fain Adam Goldstein Royal Caribbean CruisesRoyal Caribbean President and Chief Operating Officer (COO) Adam Goldstein (photo, to the right) sold 120,000 shares of his company's cruise stock on August 2 and 3, 2017.  The stock was sold at an average price of $118.21 for a total sale of $14,185,200.00, according to the SEC.  

This follows the sale of RCL stock by CEO Richard Fain earlier in the week, where he collected $24,406,075.98. Cruise executives Goldstein and Fain, who often sell big blocks of company stock in tandem like this, together sold over $38,500,000 in RCL stock last week. 

Following the sale, COO Goldstein still owns 191,252 shares of RCL stock, valued at $22,607,898.92. The sale was disclosed in a document filed with the SEC

After the sales last week, Mr. Goldstein and Mr. Fain now own over $134,000,000 of RCL stock.

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Photo credit: Royal Caribbean press center.

CEO Fain Rakes In Over $24,000,000 In Sale Of RCCL Stock

Royal Caribbean Richard FainRoyal Caribbean chief executive officer Richard D. Fain sold 210,706 shares of his cruise line stock in a transaction on Wednesday, August 2, 2017 at an average price of $115.83, for a total value of $24,406,075.98.

Mr. Fain was last in the news in April when a filing with the Securities and Exchange Commission reflected that his total compensation last year was in the amount of $10,400,000.

Maritime Executive recently reported that Royal Caribbean's income for the second quarter reached $370 million, the highest second quarter earnings in company history. The cruise line's financial performance, the maritime journal wrote, "vindicates Fain's prediction that 2017 would shape up to be a 'sensational year.'"

Following the stock sale, CEO Fain reportedly now owns 967,741 shares of his company’s stock, valued at $112,093,440.03. 

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Interested in this issue? Read Cruise Executive Richard Fain Hits the Jackpot Again.

Photo Credit: CNBC

CEO Compensation: The Rich Get Richer

Richard Fain  RCL Royal Caribbean CEO Richard D. Fain's reportedly collected total compensation last year in the amount of $10,400,000 (million) compared to his total compensation in 2015 of $9,400,000 (million), according to a recent filing with the Securities and Exchange Commission.

CEO Fain recently sold 20,000 shares of  Royal Caribbean stock.  The RCL stock was sold at an average price of $94.92, for a total transaction of $1,898,400.00. Following the transaction, Mr. Fain now owns 1,027,741 shares in the company, valued at approximately $97,553,175.72. He also indirectly owns another 426,912 shares of RCL stock, for  the benefit of certain family members, worth over $40,230,479.

Interested in this issue?  Read Cruise Executive Richard Fain Hits the Jackpot Again.

Is Too Much Ever Enough? NCL to Gouge Customers Again

Travel Weekly and Cruise Critic are reporting that Norwegian Cruise Line (NCL) is raising gratuities on April 1st from $13.50 per person, per day, to $13.99, on all ships except the Norwegian Sky. Daily gratuities for standard cabins on the Norwegian Sky will increase to $18.99 (an increase over 40%). 

Travel Weekly says that NCL will increase daily gratuities for suites from $15.50 to $16.99 on all of its ships except for the Sky where it will charge $21.99. 

It seems that there is no limit to the greed of cruise executives. NCL CEO Frank Del Rio just spoke at Seatrade Global about how the stock market was at all time high and fewer regulations and President Trump's pro-business tax cuts were good for his business. Del Rio collected nearly $32 million in Miami Cruise Ship Capital of the World2015

Del Rio's NCL has gouged its customers before, with extra charges, including increased room services charges, automatic gratuities and restaurant cover charges. He made this statement at an earning conference in 2015: "... we have looked across the fleet to identify areas where marginal changes ... can be implemented to improve performance. A few examples include a 6.7% average increase in beverage prices, the introduction of a nominal room service fee and lower costs from renegotiated shore excursion agreements. To put into perspective how these small changes can add up quickly, every dollar increase in yield translates to approximately $15 million to the bottom line."

Of course, all the major cruise lines nickel-and-dime their customers. Royal Caribbean just began charging for room service and, in the past, increased its gratuities while attempting to create the appearance that the increases were for its hard-working crew members (Read: Loyal to Royal? Expect to Pay Higher Gratuities! And the Money's Not for the Crew). Carnival Corp. did exactly the same thing while it also pocketed the increased gratuities (Read: Carnival Hikes Pre-Paid Gratuities But Will Passengers Secretly Remove Tips?)

Today, I read an article by David Grace Author titled When Greed Is Thought To Be A Virtue - When More Is Never Enough. He discusses what he calls the "more-more-more-until-it-all-blows-up" business phenomenon. The cruise executives, Del Rio in particular, put on quite a demonstration of unbridled greed at the Seatrade Cruise conference last week. The CEO's have an unhealthy, unchecked pursuit of profits in an industry which has always overreached into the American public's pockets.  The cruise industry pays virtually no taxes, exploits their workers from around the world, and still nickle-and-dimes their tax-paying customers whenever they have a chance. 

When is enough, enough? 

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Photo credit: Marc Averette - CC BY-SA 1.0, commons / wikimedia.

Royal Caribbean to Charge Room Service Fee

Royal CaribbeanTwo popular cruise blogs, the Royal Caribbean Blog and Cruise Fever, are reporting that Royal Caribbean will soon begin to charge its guests a fee of $7.95 for room service from the All Day Menu and the American Section of the breakfast menu.

Cruise guests reportedly will still be able to order complimentary continental breakfast without incurring additional fees. Guests in suites will not be charged service fees.

The service fee will begin on sailings after March 27, 2017.

Royal Caribbean announced the change on its Twitter feed, much to the disappointment of its followers.

Royal Caribbean follows other cruise lines, like NCL (Read: NCL Gouges Guests with New Charges), which also charges a $7.95 room service charge. Carnival also announced a similar fee several years ago.

Most of the major cruise lines have been accused of nickel-and-diming passengers. Many cruise passengers have complained that room service should be included in the traditional inclusive-cruise fares. 

Don't think for a second that the new room service charges are for the hard working crew members.

Marginal increases in services like room service puts big bucks into the cruise executives' pockets.

NCL's CEO Frank Del Rio said in May 2015: "... we have looked across the fleet to identify areas where marginal changes that are commensurate with market conditions can be implemented to improve performance. A few examples include a 6.7% average increase in beverage prices, the introduction of a nominal room service fee and lower costs from renegotiated shore excursion agreements. To put into perspective how these small changes can add up quickly, every dollar increase in yield translates to approximately $15 million to the bottom line."

Del Rio collected nearly $32 million in compensation that year (2015). 

In June of 2015, Royal Caribbean hiked the automatic daily gratuity on its cruise ships by nearly 8% to $12.95 per person. USA Today wrote at the time that with this increase, a family of four will pay more than $350 in service charges on a typical seven-night cruise -- one of the highest levies in the cruise business.

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Photo credit: Jim Walker

Update: We are receiving a number of humorous comments to the article on our Facebook discussion, including this one: "Next thing you know they'll put coin operated toilets in all the cabins." 

The "Trump Effect" - Cruise Industry Reinforces Its Image as an Enemy of the Environment

Falmouth, Jamaica Dredge and FillYesterday, I attended the annual Seatrade Global conference in Fort Lauderdale. In the morning, the "state of the industry'' featured the usual cruise tycoons extolling on the billion dollar cruise industry. Carnival Corporation's CEO Arnold Donald, Norwegian Cruise Line Holdings CEO Frank Del Rio, MSC Cruises Executive Chairman Pierfrancesco Vago, and Royal Caribbean Cruises CEO Richard Fain all spoke glowingly to an audience of enthusiastic cruise attendees that the cruise lines were enjoying a booming business.

The most talked about statistic was that over 25 million passengers around the world will be welcomed on board cruise ships this year.

But there was a troubling undercurrent at the convention. 

“NCL's cruise executive, Frank Del Rio, who received nearly $32 million in compensation in 2015, said that the industry was benefiting because of what he called the "Trump Effect." 

CNBC reporter and moderator, Susan Li, encouraged Del Rio to explain the "Trump Effect" to the attentive audience.  

Del Rio said that because of President Trump, the stock market was at all time high and fewer regulations and pro-business tax cuts were good for his business.

Del Rio also said that he "loved" the NCL cruise destinations, including cruises to his native Cuba, "because they make us money."   

Del Rio's comments about the "love" of more money and "fewer regulations" seem to be the essence of the "Trump Effect." President Trump is aggressively taking steps to gut the Environmental Protection Agency (EPA), as evidenced by his appointment of Oklahoma attorney general Scott Pruitt to head that federal agency. Pruitt has a record of trying to destroy the environmental protections that the EPA is responsible for enforcing. He has built his political career by trying to undermine the EPA’s environmental protections and has even disputed the effects of climate change. 

Cruise Ship Smashes Reef in Raja Ampat, IndonesiaThe cruise industry has always struggled with its environmental image.

Just two days ago, a British cruise ship smashed into a pristine and beautiful reef on Raja Ampat in Indonesia and then caused further damage when the captain insisted that tugs drag the cruise ship off the ancient reef.

There are few travel industries which can wreak havoc on rare, biodiverse marine habitats as effectively as the cruise lines. 

Damaging reefs is not an usual event in the world of cruising, as the cruise lines have recently demonstrated time after time. But the damage is not just due to the reckless operation of cruise ships but is often the intentional acts of dredging old reefs and filling native mangroves with the pulverized coral to make way for deeper ports in the Caribbean to accommodate the larger and large cruise ships which are dominating the cruise industry today.

Of course, the cruise industry just witnessed the spectacle of the Department of Justice fining Princess Cruises a record $40,000,000 fine after its investigation uncovered wide-spread illegal practices involving dumping oil at sea around the world by the Caribbean Princess, Star Princess, Grand Princess, Coral Princess and Golden Princess over the course of nearly a decade. Meanwhile, the cruise executives at the helm of the Princess organization at the time of the dumping have continued to be promoted to lucrative positions in the Carnival corporation

"Magic pipes" and shady environmental shipboard practices have long been part of the history of the cruise industry.

The fine seemed to be déjà vu of the early 2000's when the major Miami-based cruise lines, NCL, Carnival and Royal Caribbean, paid tens of millions of dollars in fines and pled guilty to multiple felonies for dumping oil into the oceans, falsifying ship logs and lying to the U.S. Coast Guard about the environmental crimes.

Reef Damage in Cayman IslandsSo, in an industry with a history like this, it's troubling to see a CEO of a major cruise line excited about the benefits of fewer environmental regulations under the Trump presidency. Yes, the cruise executives will earn lots of more millions of dollars, but the reefs and waters around the world will pay a heavy price for such short-sightedness.

Interested in more articles about the "Trump Effect?" Read:

Skift (by Hannah Sampson) - Cruise Executives at Odds Over the Trump Effect.

Seattade (by Anne Kalosh) -  Strong demand, record orderbook, China, 'Trump effect' boost cruising, top leaders say.

Miami Herald (by Chabeli Herrera) - Cruising is booming, thanks in part to the ‘Trump Effect,’ but there’s a catch.

Take a moment and read: Donald Trump is preparing to make massive policy changes at the EPA and Trump to environment: This is war.

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Photo credits:

Top - Dredge and fill in Falmouth - Jamaca Gleaner

Middle - Reef in Raja Ampat, Indoneasia - AFP via the newspaper

Bottom - Anchor damage in Cayman Islands - Don Foster's Dive Cayman via Cayman Compass

Cruise CEO's Cash In Carnival Stock

Caribbean PrincessThree cruise CEO's sold their Carnival (CCL) stock a week ago for a combined total of nearly $9,500,000, according to Market Digest.

On December 29,2016, Stein Kruse, the CEO of Holland America Group, Alan Buckelew, the Chief Operations Officer of Carnival Corporation, and David Bernstein, the Chief Financial Officer and Chief Accounting Officer of Carnival Corporation each sold 60,664 shares of Carnival stock at $52.11 per share for a total value of $3,161,201.00.  

Mr. Bernstein has been the CFO and Senior Vice President of Carnival Corporation since July 2007 with oversight of all finance, accounting, treasury, insurance, tax and investor relations functions. Mr. Buckelew, who was recently appointed to the Chief Information Officer of Carnival Corporation, previously served as the CEO of Princess Cruises from June 2007 to November 2013 and its President from February 2004 to November 2013.

The DOJ recently fined Carnival Corporation $40,000,000 for widespread discharge of oily substances, falsification of log books and lying to the U.S. Coast Guard regarding five cruise ships operated by Princess Cruises over an eight year period from 2005 through 2013. The Carnival owned cruise ship operated by Princess Cruises which were involved in the scandal are the Caribbean Princess, Star Princess, Grand Princess, Coral Princess and Golden Princess.

The issue arises what the cruise executives knew about the long standing "magic pipes" and financial irregularities associated with certain Princess Cruise ships having lower operating costs associated with not having used the vessels' oil-water separators and avoiding the costs associated with offloading and disposing the waste oil in shore-side facilities. Did these executives really have no idea that these Princess ships were engaged in these environmental crimes?

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Princess Cruises Pollution Cover-Up: Are the Greedy Cruise Executives Untouchable?

The DOJ has a history of not arresting cruise executives notwithstanding how widespread the dumping of oil or chemicals in the nations's waters may be. Will the most recent dumping incidents by Carnival's subsidiary, Princess Cruises, culminating in a $40,000,000 fine be any different? 

Throughout the 1990's, Royal Caribbean engaged in repeated dumping of everything from oil to chemicals, including dry-cleaning fluid, printing press solvents and photographic chemicals, into the waters from here in Miami all the way to Glacier Bay in Alaska. The Coast Guard and DOJ caught it using "magic pipes" and falsifying oil logs. The cruise line nonetheless continued to dump oil, lie to the Coast Guard and flaunt the authority of the former head of the DOJ, the late Janet Reno, until the agency leveled increasingly stiff fines of $1,000,000, $8,000,000 and $18,000,000.

Royal Caribbean fought the federal government fiercely back in the late 1990's, arguing that because it was a Liberian corporation, it was not subject to U.S. environmental laws - an argument rejected by Royal Caribbean Pollution - DOJ Most Wantedthe U.S. courts here in Miami. The cruise line's dumping was so pervasive and defiant that many joked back in those years that the executives could see Royal Caribbean cruise ships dumping oil right outside of the executives' windows at their headquarters at the port of Miami.

But the DOJ arrested no one at Royal Caribbean headquarters in Miami; instead, the DOJ focused its prosecution efforts on a Greek engineer who worked on one of the cruise line's ships. But, some say, it was a half-hearted effort by the DOJ. The engineer eventually walked out of a hotel in Miami when the FBI wasn't paying attention and flew out of the jurisdiction back to Greece. (He remains technically on the top ten most wanted list of the U.S. Environmental Protection agency).

The New York Times wrote an article Sovereign Islands: Gaps in the Sea Laws Shield Pollution By Cruise Lines. The Times wrote that each Royal Caribbean ship was spending around $380,000 per year in operating an oil water separator ("OWS") and disposing of the waste ashore. "By saving this money, a ship's officer could receive bigger year's end bonuses. The savings was the government's strongest evidence that senior management may have known of the conspiracy . . . "

If any cruise executives should have been arrested for the environmental crimes, many say that the executives at Royal Caribbean were the most likely culprits. But it didn't happen. 

Carnival Corporation also has a checkered history of widespread use of "magic pipes" and falsifying oil logs on its cruise ships. It was particularly bad in the 80's and 90's and culminated in 2002 when the DOJ announced that Carnival had pled guilty to dumping oil and lying about it.  Carnival's guilty plea revealed that the corporation used the same tricks that the engineers on Princess ships more recently used. Over 15 years ago, the DOJ concluded that on numerous occasions from 1996 through 2001, Carnival's "engineers intentionally flushed clean water past the sensors of the (OWS) meters. By doing this while discharging was in progress, the engineers tricked the meters to register the oil content in the clean water (0 ppm), instead of the oil content in the bilge waste. The control valves thereby remained in overboard positions, and oily waste was dumped into the sea without regard to the 15 ppm oil content legal limit."

This is the same methods as what the DOJ recently found on Carnival's ships operated by Princess Cruises.

Back in 2002 the DOJ stated that "overboard discharges of oily waste while clean water was being flushed past the meter sensors occurred on several ships, including the TROPICALE, Cruise Line PollutionSENSATION, FANTASY, ECSTASY, PARADISE and IMAGINATION. Carnival Corporation also admitted that this conduct, which allowed engineers to knowingly dump oil into the sea in quantities that exceeded the legal limit, was intentionally misrepresented in the oil record books of the ships."

So are we to conclude that the exact same widespread illegal practices used in the late 1990's, including the same "magic pipe" and flushing-the sensors-with-clean-water methods, which occurred as late as 2013, took place without any knowledge by the cruise executives at the helm of Carnival Corporation for almost a fifteen year period of time?

Who were the cruise executives who should have known about the wrongdoing?  Of course, Micky Arison was the CEO of Carnival from 2003 until July 2013. He collected around $75,000,000 in compensation during this period.  In 2012, Arison paid himself $90,000,000 as a bonus.  So, in total compensation and bonuses, Arison received over $165,000,000 while the illegal dumping at Princess Cruises continued. Forbes places Arison's current net worth at $7,800,000,000 (billion). 

Travel Weekly reported that as of the end of 2014, "the five mostly highly paid executives at Carnival Corp. earned a combined $32.7 million (in compensation a year), including $6.5 million for Costa Group CEO, Michael Thamm, $6.1 million for departed Carnival Cruise Lines President and CEO, Gerry Cahill, $6.1 million for Chief Operations Officer Alan Buckelew (who was the former CEO of Princess), and $5.2 million for CFO, David Bernstein."

Carnival generated $134,899,000,000 (billion) in income from 2004 through 2013, and netted $17,202,000,000 (billion), according to its annual statements.  Consider that Carnival and the other cruise lines pay virtually no international, federal, state or local taxes on their cruise ship profits.

So were the cruise executives concerned that their fabulous wealth would be touched? Hardly. This is an industry of fat-cat executives who know that they are untouchable. It is fundamentally different from other industries where racketeers are prosecuted or where the top dogs will eventually do the right thing for the shareholders when the corporation is caught doing something wrong. Consider what Wells Fargo & Co. Chief Executive John Stumpf recently did when his company was caught opening millions of checking, saving and credit card accounts for customers without their knowledge. Stumpf agreed to forfeit compensation worth about $45 million from around 910,000 shares in un-vested stock awards, and agreed to forego his bonus this year. Another executive who was in charge of the division where much of the illegal activity took place, will give up about $19 million worth of stock. Wells Fargo’s board of directors also said that other executives could lose stock awards or even other compensation already paid to them.       

But there is no way the wealthy cruise executives are going to voluntarily let loose of a single dime of their ill-gotten profits. The tax-paying public will just have to pony up a little more to cover the difference, is what they think.

The cruise executives' greed is staggering. The $40,000,000 fine, after all, is just a drop in the ocean Micky Arison Carnivalof wealth enjoyed by Carnival executives. Consider that Caribbean Cruise Line, and related marketing and timeshare development companies, agreed to settle a class-action lawsuit to the tune of up to $76,000,000. This case (involved the nuisance of millions of robocalls in violation of the Telephone Consumer Protection Act) involved nothing comparable to discharging oil around the world. 

Yes, the latest pollution scandal earned Princess Cruises and Carnival a certain amount of bad press, but the cruise industry has always been able to navigate through criticism that it is a dirty industry at its core. The only difference that the environmental fines will make is if it deters the misconduct of those who benefited the most from the deliberate pollution. Unfortunately, a $40,000,000 fine to executives who collected many times that amount in compensation and bonuses is meaningless.

It is well past time that corporate activists demand disgorgement of executive bonuses and resignation of executives who have caused harm to corporate shareholders. Likewise, the DOJ needs to wake up. Cruise lines will continue to pollute unabated, as they have done since the1990's (or earlier), unless and until corporate executive are held personally accountable.

The DOJ and state prosecutors have levied a total of over $90,000,000 in fines against the cruise industry over the last twenty years. The fines are always accompanied with press releases discussing years of probation imposed on the companies which, in the case of Carnival, was quickly violated back in the early 2000's without any real consequence. The magic pipes, rigged OWS sensors and falsified log books from the 1990's continued until the mid-2010's. Carnival and Princess executives have again pointed their crooked fingers at shipboard employees while disavowing any knowledge of what was happening on their ships. With a collective sigh of relief that the DOJ again didn't arrest a single cruise executive for involvement in the scandal, they quickly agreed to pay the fine.  

Have a thought? Please leave a comment below or join the discussion on our Facebook page.

Read our other articles about the Princess Cruises deliberate pollution and cover-up:

Princess Cruises Pollution Cover-Up: What Did the Executives Know?

Deliberate Dumping, Cover-Up and Lies: DOJ Fines Princess Cruises $40,000,000.

Photo Credit:  

Michael Evangelos Psomadakis, Chief Engineer Nordic Empress - Environmental Protection Agency Most Wanted Poster.

Micky Arison - Steve Mitchell - USA TODAY Sports via 7500toholte.sbnation.com/ 

Carnival CEO Arnold Donald Extends Contract, Sells Over $4,000,000 of CCL Stock

Arnold DonaldCruise Industry News reports that Carnival Corporation recently confirmed in a SEC filing that it had extended CEO Arnold Donald’s employment agreement for an additional year.  

You can see the original terms of his three year employment plan filed with the SEC in 2013 here

Mr. Donald collected $9,373,908 in 2015.

The SEC also reflects in a seperate filing that on October 20, 2016, Mr. Arnold sold 91,813 shares of Carnival stock, totaling $4,285,142, in multiple trades at prices ranging from $46.51 to $46.99 for an average price of price of $46.70. Mr. Donald reportedly currently owns 532,340 shares of CCL stock which, at today's value, is worth $24,892,218.40.

Mr. Arnold is generally considered to have done a good job guiding the cruise line after a disastrous series of groundings and engine room fires several years ago.  He has overseen Carnival while it invested attention and money toward the maintenance of its fleet of over 100 cruise ships; however, Mr. Donald remains susceptible to criticism by overworking and underpaying Carnival crew members. 

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Photo credit: CNBC

CEO Del Rio Buys $3,000,000 Worth of NCLH Stock

The Securities and Exchange Exchange Commission reported this past week that the president & CEO of Norwegian Cruise Line Holdings Ltd ("NCLH"), Frank Del Rio, bought 83,498 shares of NCLH at an average price of $35.94 a share. (Photo below, right, during interview on CNBC).

The transaction took place on on August 31, 2016.  The total cost of cruise stock purchased was $3 million. 

The price of the stock decreased to $35.61 by the end of the week. It is at a 52 week low. 

It was widely reported earlier last month that NCL had slashed its earnings forecast for this year and announced that it would miss its profit target for next year, because of "continued weak demand" for European travel, Brexit's impact on the pound, and some U.S. consumers reconsidering Frank Del Rio NCLMediterranean cruises following ISIS-inspired violence worldwide.

Analysts say that its been a "choppy year" for the cruise industry in general, and for shares of Norwegian Cruise Line in particular. NCLH stock reportedly "retreated to levels last seen in mid-2014." Frank Del Rio's $3 million cruise stock purchase, according to Wolfe Research analyst Jared Shojaian, is "the largest open market purchase by a cruise-line executive in history."

Bloomberg says that Del Rio is attempting to demonstrate confidence in NCL to "sail through choppy waters."

It is a move similar to Royal Caribbean's Chairman Richard Fain who bought 29,190 shares of RCL stock, in a series of trades for an average of $68.5161 per share, worth nearly $2,000,000. Cruise executive Fain made the transaction shortly after his cruise line's stock price dropped substantially following the release of Royal Caribbean's second quarter earnings. But in Fain's case, unlike Del Rio's, the cruise stock quickly bounced back over 6.5 %, earning the cruise executive a one-day profit of around $140,000. 

Del Rio certainly has boatloads of money to buy stock. In 2015, he received almost $32,000,000 in total executive compensation.

The SEC states that he directly and indirectly holds 919,173 worth of his cruise line stock. The SEC forms reveal he owns 451,171 shares directly. He indirectly owns 27,875 shares through a family trust and the SEC forms state that he indirectly holds 304,373 and 135,754 shares through investment limited liability corporations.  The total shares are worth over $34,000,000 at the current depressed stock prices. The Norwegian Cruise Line stock price hit a high last year of $64.27 a share which, at that price, would be worth a total of nearly $60,000,000 to Del Rio.

It's no wonder that cruise passengers freak out when NCL nickel and dimes them with room service charges, increased gratuties and high-end restaurant cover charges.

Yes, cruise executives pocket an obscene anount of money. It's funny money, I say, at a time when crew members are working harder and longer than ever before for less and have no job security.  

Interested in "fat cat" cruise executives? Read Andy Stuart - No Wonder He's Smiling (NCL), Micky Arison Sells $433,700,000 Worth of Carnival Stock (CCL), and Cruise Executive Richard Fain Hits the Jackpot Again (RCL). 

Photo Credit: CNBC

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CEO Richard Fain Profits From RCL Stock Buy

Richard FainYesterday, Royal Caribbean's Chairman and CEO Richard Fain bought 29,190 shares of RCL stock, in a series of trades for an average of $68.5161 per share, worth nearly $2,000,000, according the to an article in Seatrade and SEC forms.

Today, with the RCL stock up over 6.50% from yesterday's close, his $2,000,000 worth of shares purchased yesterday is now worth $2,139,627, for a nice one-day profit of around $140,000.

The SEC forms indicate that he owns 1,068,881 RCL shares directly and 426,912 indirectly which at the current price of $73.30 is worth $109,6416,269.  

Mr. Fain purchased the stock one day after his company's stock price dropped more than 6% following the release of the cruise line's second quarter earnings. 

Mr. Fain previously sold 80,516 shares of RCL stock last October at $98.80 per share for a total value of $7,955,335.00.

Mr. Fain collected $9,388,569 in total compensation last year.

Interested in the issue?  Read: Cruise Executive Richard Fain Hits the Jackpot Again.

Photo Credit: Linkedin 

The Rich Get Richer - Ex NCL CEO Collects $13,400,000 in Golden Parachute

A couple of days ago, Cruise industry News reported that, according to NCL's 2015 Annual Report, Kevin Sheehan received a severance package from NCL last year totaling $13,400,000 (million). 

Mr. Sheehan resigned unexpectedly in January last year amidst some controversy.   

The annual report in question, which you can see here, specified a "a total severance expense of $13.4 million of which $8.2 million was due to the acceleration of the equity-based awards which was Kevin Sheehanrecorded in January 2015." 

In an industry which includes cruise CEO's who make the big bucks like multi-billionaire Micky Arison and multi-millionaire Richard Fain, perhaps this is just business as usual.

But it must be hard to swallow for some crew members who work around the clock for peanuts, and without any real benefits. Crew members can be fired without cause. There is a saying that a cruise line can fire a crew member for any reason - good reason, bad reason or no reason - without legal consequence.     

NCL has suffered over the year from the perception even amongst cruise fans of being the king of "nickel and diming" its customers. But when it's time to make a deal with a CEO to move him out of the way without a fuss, NCL will not hesitate to pay millions. 

Photo credit: @CruiseNorwegian via CruiseInd 

March 17, 2016 Update: Proxy statement explaning, among other thing, what Mr. Sheehan's financial benefits he was entitled to if he was terminated with cause versus without cause. 

March 18, 2016 Update:  Many crew members seemed to like Mr. Sheehan and not the CEO who replaced him, Frank Del Rio, who many describe as an arrogant and cost-cutting boss. Here's one of many comments sent to me on Facebook:

"It doesnt matter how much Mr Sheehans got. He is such a nice and approchable person. I had the chance to meet his 3 years ago in the NCL Sun,h e came to my side stand to greet and thank us for our hard work. Unlike Mr Del Rio, who comes to NCL changing evwrything, all our benefits. The company is going down for the crew. Del Rio came to NCL PEARL when i was there, stood therw for 2 hours and put the ship up side down. So arrogant and unpolite to the crew, didnt even smile at us. Not even a "well done guys, thank you for your hard work." NOTHING. I've been with NCL for the past 3 years. I will appreciate if you keep my name private. I may lose my job if anything comes to public."

Seatrade Global 2016: How About the Crew Members?

Later this morning, Seatrade's State of the Global Cruise Industry Conference, moderated by CBS Travel Editor Peter Greenberg, will feature four cruise executives: Frank Del Rio, President & CEO, Norwegian Cruise Line Holdings Ltd, Arnold Donald, President & CEO, Carnival Corporation, Richard Fain, Chairman & CEO, Royal Caribbean Cruises Ltd. and Pierfrancesco Vago, Executive Chairman, MSC Cruises. 

Three additional cruise line leaders will conclude the presentation: Charles A. Robertson, Chairman & CEO, American Cruise Lines, Edie Rodriguez, President & CEO, Crystal Cruises, and Tara Russell, President, Carnival Corporation's Fathom ('impact travel"). 

Shortly, if this Seatrade is like any other, we will hear about the growth of the industry and the increasingly larger cruise ships built to accommodate the 24,000,000 people who will decide to Crew Membervacation on the high seas this year. There is no doubt that the cruise industry, a rich and powerful industry, continues to grow at a record pace.  

But there will be little mention of the hard work by the tens of thousands of crew members from around the world who are the backbone of the industry. Seatrade Global (and its predecessor Cruise Shipping Miami) measures itself in terms of the number of the passengers and giant ships and the money which these cruise customers and cruise ships generate for the ports and the industry as a whole. The cruise executives will tell us about a Florida port, Port Everglades, just setting a new record for the most cruise ship passengers in a single day, 54,700 passengers last Sunday. 

But the cruise executives will not mention an incident this weekend in Port Everglades, the day before the port set a new record for passengers, when a Royal Caribbean crew member threatened to jump off the Oasis of the Seas. Are cruise lines pushing their crew members too hard for too little?

Crew members are working harder and longer than anytime in the history of the cruise industry. MLC2006 was suppose to result in the protection of the crew members, by ensuring that men and women who work on ships at sea are guaranteed a reasonable number of time resting. But, in reality, crew members hired as waiters state that they can't log their time in when they arrive in the dining hall at 6:30 A.M to prepare their stations for the rush of passengers who enter the dining rooms for a 7:00 A.M breakfast. And they are often required to sign out and continue to work "off the clock" when they exceed the maximum hours theoretically limited by MLC2006.  

Crew members also complain that they attend meetings only during their "breaks." Many crew member who accurately log their long hours into the electronic time systems have their real hours worked changed by managers to comply with the MLC2006 auditors hired by the Carnivals and Royal Caribbeans. Take a minute and read the comments left by crew members on our Facebook page commenting on the sad state of MLC2006 non-compliance by the major cruise lines today. 

I recently posted a question on Facebook which I asked several years ago whether Royal Caribbean was working its crew members to death? Crew members left insightful information and quickly added that its not just Royal Caribbean working its crew members too hard but it is an industry wide problem. When a galley worker newly hired on a Princess cruise ship, the Island Princess, ended his life last week, another round of criticism followed. Are cruises bosses uninterested in crew welfare as they seek record profits on their gigantic ships?

Crew members like waiters, cabin attendants, galley workers and cleaners work regular 12+ hour days, seven days a week, for months at a time. They work even harder and longer when their cruise ships call on U.S. ports and their department heads are concerned of a surprise USPH inspection as well as when norovirus breaks out and "enhanced cleaning" is required.

The industry's trade organization, CLIA, meanwhile touts in a recent tweet that "Our work never ends. Crewmembers continually clean & sanitize cruise ships to ensure passenger & crew #health." True indeed as far as "continually cleaning" goes. Yes, this may be one of the few CLIA statements that is factually true given the seemingly endless hours worked by the crew.  But there is no overtime or extra pay when the crew members work around the clock as a recent gastrointestinal outbreak during an Oceania cruise demonstrated. Crew members reported working 18 to 20 hours a day.

The cruise executives know that such long hours result in low morale and burn-out, but they look the other way. Ironically, cruise executive Micky Arison just re-tweeted a post by @ProjectTimeOff designed to encourage potential Carnival cruise customers to take time off from work and cruise - "The truth is out: time off work reduces burnout, improves morale, and boosts creativity." @MickyArison tweeted "Absolutely the case on a #cruise." Maybe so if you're a guest.

Absolutely not if you are a crew member.

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Cruise Executive Goldstein Sells Royal Caribbean Stock for $8.9 Million

Richard Fain Adam Goldstein Royal Caribbean Cruises President and Chief Operating Officer (COO) Adam Goldstein sold 90,000 shares of the cruise line's stock today.

Mr. Goldstein sold the shares at $98.88 per share for a total value of $8,898,804.

Mr.Goldstein last sold RCL stock in July when he sold 4,184 shares at at $91.08 per share for a total value of $381,094.19.

At that time, he joined other cruise line executives dumping RCL stock. Royal Caribbean chairman Richard Fain sold 151,032 shares of his cruise line's stock for $13,650,151 at an average price of $90.40 a share. Royal Caribbean's General Counsel and Chief Compliance Officer Bradley Stein sold 2,402 shares of the company stock for for a total value of $218,748.70. These insider traders sold $14,249,993 of company stock last summer.

October 27, 2015 update: Royal Caribbean Chairman & CEO Richard Fain sold 80,516 shares yesterday. The Insider Trading Report said that the insider selling transaction was disclosed on October 26, 2015 to the Securities and Exchange Commission. The shares were sold at $98.80 per share for a total value of $7,955,335.00. Together, cruise executives Fain and Goldstein sold $16, 854,139 worth of Royal Caribbean stock yesterday and over $30,000,000. since July. 

According to the DFN, "following the completion of the transaction, the chief operating officer (Mr. Goldstein) now directly owns 253,153 shares in the company, valued at $25,031,768.64."

October 29, 2015 updateRoyal Caribbean's Vice President Harri U. Kulovaara reportedly sold 8,228 shares of RCL stock on October 27th at an average price of $100.32, for a total of $825,432.96.

New CLIA President Makes Quick Exit: What Happened?

The new president of the Cruise Line International Association (CLIA), Thomas Ostebo, unexpectedly left his new job amidst claims by CLIA that he departed for unexplained "personal reasons."

Mr. Ostebo retired from the U.S. Coast Guard as a rear admiral before joining CLIA. He joined CLIA with great fanfare.

CLIA Chairman and president of Royal Caribbean, Adam Goldstein, said that Ostebo supposedly Thomas Ostebo wanted to spend more time with his family. 

Hannah Sampson of the Miami Herald interviewed Mr. Ostebo shortly after he started at CLIA. He told the Herald that his job at CLIA was “interesting, frightening, shocking and exciting all at the same time in just the first couple days.”

"I told my wife last night: ‘After day two, I feel like I’ve been here two years already.’”

Anyone know what really happened to cause Admiral Ostebo to bolt from CLIA?

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Sell Out? Royal Caribbean Executives Sell Stock For Over $14,000,000 After Freedom of the Seas' Fire

Royal Caribbean Cruise StockYesterday, Royal Caribbean chairman Richard Fain sold 151,032 shares of his cruise line's stock for $13,650,151 at an average price of $90.40 a share. President and Chief Operating Officer Adam Goldstein sold 4,184 shares at at $91.08 per share for a total value of $381,094.19. Royal Caribbean's General Counsel and Chief Compliance Officer Bradley Stein sold 2,402 shares of the company stock for for a total value of $218,748.70.  In sum, these insider traders sold $14,249,993 of company stock.

A little over 10 days earlier Royal Caribbean's Freedom of the Seas burst into flames as the cruise ship approached Falmouth, Jamaica. The ship burned for one and one-half hours and destroyed all of the insulation around the exhaust stack from the bottom deck to the fifteen deck. Many passengers, crew members and maritime experts believe that the fire may have started due to the installation of a scrubber system on the cruise ship and the welding process to accomplish the work. Royal Caribbean is not saying, of course. 

The cruise lines has also been criticized for downplaying the fire, saying that it was just a "small fire" which was contained in the lower mechanical spaces and it was quickly extinguished, all patently false statements as we have demonstrated in video and photographs. To make matter worse, the cruise ship sailed onto the next port without a post-fire inspection by the flag state (Bahamas) or the classification society. This ship never should have sailed on without a rigorous inspection after the fire. The photographs clearly show that the ship sustained major damage. The photographs and first hand observations by the crew confirm that the fire destroyed the insulation around the exhaust stack and this presented a grave potential danger to the ship's passengers and crew. 

My opinion is that the Royal Caribbean cruise executives effectively misled the public about the fire in order to maintain the stock's improved performance. The company shares have rallied 46.38% in the past year. On July 31, 2015, the shares had rallied to one year high of $90.88 compared to a one year low on October 15, 2014 of $52.32.

If the executives had shut the ship down in Jamaica for the mandatory SOLAS inspection, this would have resulted in tens of millions of dollars spent by the company on lodging, airfare of all passengers back to Miami and cruise refunds to over 4,000 people which would have had a material negative effect on the company's stock.  Did the executives put their financial interests ahead of passenger and Royal Caribbbean Freedom of the Seas Firecrew safety? Absolutely they did, in my opinion. 

What do these executives really think about the stock value now that the fire is out and the cruise line has dodged, so far, a publicity fall-out?  One analyst said that "Mr. Richard’s trade could mean only one (thing): that he’s a pessimist when it comes to the Company’s prospects and its stock price."

Fain & company bamboozled the public with the "small fire" hoax. I suspect that the executives thought that it was time to cash out and put some more millions in their accounts before the truth comes out. 

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Interested in this issue? Read Cruise Executive Richard Fain Hits the Jackpot Again.

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Mad Money's Jim Cramer Gives Carnival Thumbs Up

"Mad Money" host Jim Cramer is a fan of Carnival Corporation (CCL).

He used to associate the word "disaster" with Carnival Cruise Lines. Between the Costa Concordia sinking, engine room fires, the Triumph "poop cruise," passengers sick with norovirus, the Arab Spring - it "seemed the company was doomed," says CNBC.

But Carnival has enjoyed a turnaround with its stock hitting new highs. 

I think its a tad late to get in on the CCL run, plus it takes only one Carnival cruise ship hijacked or attacked to send all cruise stock falling dramatically. But its always fun to watch Cramer ramble on in his unique way.

 

Cruise Executive Richard Fain Hits the Jackpot Again

According to the SEC, Royal Caribbean CEO Richard Fain (below right) sold 87,488 shares of his RCL stock at an average price of $76.41, for a total value of $6,684,958.08.

After the transaction, cruise executive Fain still owns 1,139,613 shares of his cruise line stock valued at approximately $87,077,829.33.

I wrote a similar article last December entitled Royal Caribbean Executive Cashes In Again about Royal Caribbean's Chief Operating Officer Adam Goldstein unloading 90,000 shares of Richard Fain Royal Caribbean cruise executive RCL stock. COO Goldstein sold a small portion of his RCL stock at an average price of $77.31 for $6,957,900.00. Following the the sale, he still owns 310,724 shares of his cruise stock, valued at approximately $24,022,072.

All of this is peanuts compared to the vast wealth of Carnival's Micky Arison who recently sold $433,700,000 worth of Carnival stock.

The cruise business is like running a crooked bootlegging business in the 1930's. There's no taxes to pay, the feds leave you alone, and the money rolls in by the boatloads. The profits are enormous. For the cruise executives, it must be liking hitting the jackpot every single night.

I curious to hear from the crew members of these two cruise lines regarding what they think these cruise executives have done to benefit the hard-working crew?

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Photo Credit: Flickr - United Way of Miami-Dade

Arnold Donald's Amazing Rise from the Ninth Ward to Carnival CEO

Carnival's Arnold Donald is not a typical cruise line executive.  He's not white; he wasn't born with a silver spoon in his mouth; and he's not arrogant.   

He was born in New Orleans. His parents didn't finish high school. They raised him and his three siblings in the Ninth Ward (which is now largely destroyed due to Hurricane Katrina).  He achieved great success in the segregated south due to his commitment to education, hard work and the confidence instilled in him by his parents and teachers at St. Augustine High School.    

Mr. Donald has given back to New Orleans and has awarded over two dozen scholarships to his college and business school alma maters. He also donated funding to build a new wing at St. Augustine, named after his mother and father Warren and Hilda Donald.

He's now the top executive of the largest cruise line in the world.  Read the article and watch the video by WVUE FOX 8 New Orleans:    

FOX 8 WVUE New Orleans News, Weather, Sports, Social

Micky Arison Sells $433,700,000 Worth of Carnival Stock

Carnival Corporation Chairman Micky Arison reportedly just sold 10,000,000 (million) shares of Carnival stock for approximately $433,700,000 (million).

The stock transaction was a "block sale" performed by a trust to benefit Arison. All of Arison's shares reportedly are held either directly or indirectly in various trusts.

By June of last year, Arison had unloaded over $490,000,000 of his cruise stock in 2014

Micky ArisonBy my calculations he has sold well over $900,000,000 of his cruise line's stock in the last 12 months. 

After this latest sale, the Arison family reportedly still has about 159,200,000 shares of Carnival stock. 

This vast wealth was generated by incorporating the cruise line in Panama and registering Carnival-owned cruise ships in places like Panama and the Bahamas in order to avoid all U.S. taxes, safety regulations, and wage & labor laws so Carnival can pay the bulk of its crew members peanuts.

Carnival-owned Costa paid just a little over $1,000,000 in fines after the Costa Concordia disaster, which killed 32 people, in order to escape accountability in the criminal trial of Captain Schettino. 

Who says that money can't justice?

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Photo Credit: New York Post

Welcome to the Men's Club: Carnival Names Christine Duffy President

I was sitting in Atlanta’s Hartsfield-Jackson International Airport this morning when I read a travel publication’s headline that Christine Duffy was just named president of Carnival Cruise Lines. Reading the headlines made me feel like I was having an out-of-body experience.

Christine Duffy president of Carnival?

I stopped for a moment and thought, is today April Fool’s Day? Or was the article, perhaps, a satire from the Onion?

But it’s true. Effective February 1, 2015, Ms. Duffy will become president of the largest cruise line in the Christine Duffy Carnivalworld. Carnival sent out a press release this morning indicating that Ms. Duffy will officially replace Gerald Cahill who resigned as president and CEO of Carnival Cruise Lines last month.

Ms. Duffy, as we know, is the president and CEO of the Cruise Lines International Association (CLIA). CLIA is the cruise industry’s trade organization which has lobbied against the cruise victim organization’s efforts to make cruising safer and more transparent to the public.

I have always viewed Ms. Duffy, like the CLIA president before her (Terry Dale), as little more than an energetic, smiling cheerleader doing the dirty work of the cruise line executive men like Micky Arison, Richard Fain, etc. She was thrown into the mix quickly after she replaced Mr. Dale when she had to appear before Congress to explain embarrassments like the Costa Concordia disaster, the cruise line's avoidance of U.S. taxes, and the cruise industry's refusal to recognize basic rights of cruise passengers

During a cruise safety hearing before the Senate, Senator Rockefeller questioned Ms. Duffy's credibility and admonished her to "speak more truth." Referring to the cruise industry which she represented, he stated "You are A World Unto Yourselves."

Carnival’s press statement says that “Ms. Duffy has more than 30 years' experience in the travel industry, most notably on the trade side, having started her career as a travel agent. She later served as president and CEO of Maritz Travel, one of the country's largest corporate meeting, incentive and event companies, for seven years."

That's a nice way of saying that former-travel-agent Ms. Duffy, notwithstanding her enthusiasm, has no experience operating a cruise line whatsoever.

She seems most suited to be a rubber-stamp for Micky Arison and Arnold Donald. 

I realize that I'm wading out into dangerous territory here, and will likely be receiving hate-mail with accusations of being misogynous.  

There's no doubt that the cruise lines need far more women elevated into positions of leadership. (I have written about the male-dominated cruise executives before).

But Ms. Duffy seems like Sarah Palin of the Seas. Lots of spunk and personality but little experience and substance. She is not a force who will lead the largest cruise line in the world to become a responsible and transparent leader in the cruise business. 

Royal Caribbean Executive Cashes In Again

Adam Goldstein Royal CaribbeanI've written many articles about the rich-get-richer schemes of cruise executives: paying the crew members a pittance, making the crew work for 10-to-12 hours a day 6-to-8 months without a single day off, firing hundreds of office employees when the stock drops, and so forth and so on.

Well you can add this article to the list.

The Securities & Exchange Commission revealed that Royal Caribbean's Chief Operating Officer Adam Goldstein unloaded 90,000 shares of the company’s stock yesterday. Goldstein sold a small portion of his RCL stock at an average price of $77.31 for $6,957,900.00. Following the the sale, he still owns 310,724 shares of his cruise stock, valued at approximately $24,022,072. 

I last wrote about cruise executive Goldstein's stock sales this summer - The Rich Get Richer: Cruise Executive Goldstein Unloads $2,599,935.36 of Royal Caribbean Stock.

Goldstein caused an uproar in August when the cruise line announced that it was charging kids $10 to have breakfast with Shrek

Now you can understand where all those nickels and dimes go - into the cruise executives' pockets.

 

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Photo Credit: Royal Caribbean Press Center

Andy Stuart - No Wonder He's Smiling

The Securities & Exchange Commission reports that Norwegian Cruise Line (NCL) Executive Vice President Andrew Stuart sold 67,701 shares of NCL stock in a transaction last week at an average price of $40.35, for a total value of $2,731,735.35.

You can read more information about the stock sale at Ticker Report.

Mr. Stuart reportedly now owns 180,099 shares of the cruise line stock, valued at approximately $7,266,995.

So, including just his NCL cruise stock and cash from his recent NCL stock sale, Mr. Stuart is worth at least NCL's Andrew Stuart$10,000,000.

Cruise executives make fantastic money. We all know that Carnival executive Micky Arison is worth somewhere between $5,000,000,000 and $6,000,000,000 (billion). Royal Caribbean executives Richard Fain and Adam Goldstein have raked in over $100,000,000 between them. And even a vice president, like Mr. Stuart, can make $10,000,000.          

At the same time, the tax-free cruise industry is incredibly cheap when it come to paying crew members a decent salary. Cleaners routinely work well over 300 hours a month for as little as $550. Crew members receive virtually no benefits.

Mr. Stuart's company, in particular, routinely refuses to permit cruise passengers who have just lost a family member, or children diagnosed with cancer, to reschedule their vacations.  

All those nickels & dimes NCL is saving off of its hard-working crew members and unfortunate customers are lining the pockets of the cruise executives. 

 

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