Are the Last 2 to 3 Years of Cruise Ship Mishaps An Anomaly or a Trend?

Adam Goldstein Royal CaribbeanThis weekend, the Royal Caribbean Blog (an unofficial Royal Caribbean fan website) quoted Royal Caribbean President and CEO Adam Goldstein saying that the "last two or three years" of cruise ship mishaps are just  an "anomaly."

Goldstein made his comments to CNBC's Simon Hobbs who excitedly told the television audience that there was a disconnect between what the non-cruising public thought about cruising and what cruise president Goldstein told him in an exclusive interview:

"I having been in this cruise business for over 25 years now," Goldstein says. "My frame of reference is two and a half decades of an extraordinarily safe of track record of great duration. Tremendous attention to detail and training that prepares the crew and the officers to do everything that they need to do from to delivering satisfaction to the guests to being extremely safe and environmentally responsible." 

'Extraordinary . . . tremendous . . . extremely . . . everything they need." This is classic cruise CEO gobbledygook by CEO Goldstein. Over-the-top hyperbole in response to softball questions by a cruise friendly interviewer.  

But does CEO Goldstein really want to go back to the "good old days" of cruising 20 to 25 years ago? 

I don't think so.

Was Royal Caribbean and the cruise industry "environmentally responsible" 20 years ago as Goldstein claims?

I don't think so either.

The 1990's were the decade when Royal Caribbean was the environment's absolute worst enemy. Thousands of garbage bags washed ashore on Miami Beach and tar fouled the sandy beaches of South Florida and the Bahamas, while Royal Caribbean dumped waste and emptied its oily bilges from cruise ships sailing the pristine waters here in Key Biscayne to Glacier Bay in Alaska and back.

The Coast Guard caught Royal Caribbean with its bilges open. Environmentalist-from-Miami U.S. Attorney General Janet Reno slammed the dirty cruise line. Royal Caribbean pled guilty to multiple felonies, including lying to the Coast Guard and the U.S. government. Before it was over, the U.S. Department of Justice fined the cruise line a record $27,000,000 and forced Royal Caribbean to admit that it was a corporate felon. 

Has the cruise industry make progress regarding environmental issues as Goldstein tells CNBC?

That's debatable. Just last week we reported on MSC Cruises caught throwing bags of garbage overboard into Brazilian waters. Just today MSC called itself the "Guardians of the Seas" but it won't Carnival Ecstasy Cruise Ship Firetalk about dumping garbage bags overboard.

But lets go back to 20 to 25 years ago, were there Carnival poop cruises back then?

Yes, and worse.

In 1995, the Carnival Tropicale, lost all power and families who brought their children aboard, couples honeymooning, and elderly citizens  bobbed around in the Gulf of Mexico, nauseated. The Carnival passengers endured the same disgusting circumstances as the Triumph.  Then a tropical storm, Roxanne, struck the ship. The cruise from hell turned into a ship of terror when the passenger thought that they were going to die. Carnival offered the traumatized passengers a $40 credit because the ship missed ports in Grand Caymans and Mexico.

Were there other fires and disasters back in the late 1980's and 1990's too? You bet.

Some of the most publicized incidents in the 1990's involved Carnival's Ecstasy (above right). It caught fire in 1996 and again in 1998 shortly after leaving the port of Miami. If the fire had occurred thirty minutes later there would have been no fire boats to extinguish the flames. Local news helicopters from Miami flew to the scene and filmed the burning ship.

The next year, the Carnival Tropicale, caught fire again and the ship was adrift again in the Gulf of Mexico with 1,700 passengers and crew members for two days after the fire disabled the engines. This Oceanos Sinkingincident received national attention, particularly after passengers complained that some crew members did not speak English well enough to provide safety instructions. The New York Times reported on the debacle in an article "Language Barrier Cited In Inquiry Into Ship Fire."

During the ensuing investigation, the captain of the Tropicale testified that he was concerned that the engine room would explode. He kept information about the raging fire from passengers because he worried they might panic and jump overboard, according to the St. Pete Times article "Cruise Captain Feared Panic."

The 1990's began with the captain's abandonment of the sinking Oceanos (right), which made my list as the number 1 worst cruise ship video of all time.  

The 1990's also saw the Chairman of the National Transportation Safety Board, Jim Hall, calling the cruise lines an "outlaw industry" which suffered from "bad actors." 

The difference between then and now is that the "good old days" of the 1990's did not have Twitter breaking embarrassing cruise news every day, or Facebook and YouTube hosting iPhone images and video of cruise ship disasters, or social media blogs, like this one, providing insight when cruise executives take you back to the past and try and pull the wool over your eyes.  

An Open Letter to P&O Ferries CEO Helen Deeble: Do the Right Thing

Dear Ms. Deeble.

Cruise and ferry executives have difficult jobs, I suspect. You have to effectively deal with labor disputes, increasing fuel costs, and price wars with your competitors in an increasing difficult economy. What a headache.

In addition to managing the financial pluses and minuses of your businesses, cruise executives like you also have to timely and effectively respond to public criticism when things go wrong on the high seas. But many maritime CEO's, who are well educated and highly experienced in business and Helen Deeble P&O Ferriesaccounting matters, suffer from an inability to manage their company's reputation when they face public scrutiny.

I know that you have faced tough economic times before while running your ferry business. At this time last year, you were finishing a major evaluation of P&O operations which addressed declining revenue and increasing costs facing your staff over 4,000 employees. P&O encountered stiff competition from rival ferry lines Danish-based DFDS Seaways and France's MyFerryLink as well as the underwater train operators to France, in addition to generally tough economic times across Europe.  

It must be hard to be responsible for over 4,000 employees who depend on P&O to support their families. After prior evaluations over the years, I know that you had to axe thousands of ferry employees to maintain profitability for the corporation. It's doubly hard when a U.K. company like yours goes head-to-head with well run companies like DFDS Seaways (those Danish are hard working and efficient people, aren't they?)

Your other competitor, France's Groupe Eurotunnel, has not only the underwater train system but they enjoy lower priced ferry fares with their MyFerryLink brand. This upsets me. I'm a fan of Winston Churchill and the U.K. battle against Germany from 1939 to 1945 still inspires me. So P&O having to compete with the French, who would be part of Germany but for the P&O FerriesU.K.'s sacrifice and courage, seems hardly fair. I am rooting for your U.K. ferry line to beat its overseas rivals. But I suppose that's just my biased perspective.

Added to your difficult financial equation, I know that P&O received embarrassing treatment by the press in the U.K. last year after an internal company report concluded that exhausted cross-Channel P&O ferry workers suffering from sleep deprivation and stress presented a danger to their ships and passengers. The information from your internal report, based on a survey of 500 of your ferry workers measuring their hours of work, watch-keeping and fatigue, was leaked by a worker to a newspaper which published "Passengers at Risk Because of Tired Ferry Workers." Sometimes its hard to keep these type of things secret with all of the newspapers looking for a scoop. 

I am also not insensitive to the recent bad news when the British Competition Appellate Tribunal granted relief earlier this month to Groupe Eurotunnel, which had been hit with an antitrust ruling stopping it from also operating its MyFerryLink ferries between Calais and Dover. You got a ruling knocking them out of your ports for a while. Good for you! But the ruling was overturned which brings stiffer competition to P&O.

But the stiffest challenge you face is growing protests that your company treated the parents of ferry passenger Richard Fearnside shabbily after he disappeared from the Pride of Kent earlier this year. I was disturbed to read that your ferry lacked any closed circuit television cameras (CCTV) on its exterior passenger decks. Money's tight I know, but no CCTV? And I was even more disturbed and angered when Richard's mother, Marianne Fearnside, raised this issue of why-no-CCTV cameras in this day and age in a letter to you. You kicked the letter downstairs to your PR fellow Chris Laming, who rudely rebuffed her and, incredibly, dismissed her proposal as "not practical."

You may recall that this dismissive attitude has plagued P&O in the past. Over 190 passengers and crew were killed in 1987 when the ferry line considered it was not practical to install CCTV cameras or alarms to determine whether the Herald of Free Enterprise bow doors were closed. The ferry capsized after a crew member responsible for closing the doors was exhausted and fell asleep (a problem which continues today). I know you were not with P&O / Townsend Thoresen back then, but as a well educated professional I am sure you are more Richard Fearnside - Marianne Fearnsidefamiliar with this disaster than I. You understand that when you forget history, it repeats itself. 

I wonder what you think of Marianne Fearnside. I really do. You're a mother of two boys, now men. You must love your children deeply. You must have thought, at least once, what if one of my boys disappeared from one of my ferries at sea, at night, into the dark and cold water, alone. How would I feel?  What would I do? You must have thought of these things, right?

I can tell you what I, as a father of two boys, think of Marianne. Unlike prior P&O victims understandably crippled by the loss of loved ones, Marianne Fearnside is a brave soul and a tough lady. She will not let her son's voice fade away. It's not easy, but she has taken her heart-felt campaign to improve safety on P&O ferries to the public. Initially dumbfounded and paralyzed, she has been vocal and full of action of late. She has found an audience and her cause has resonated with the public. Over 85,000 people have signed her petition to require P&O to install CCTV on its ferries. (This is a modest request considering that cruise ships based in the U.S. not only have hundreds of CCTV cameras but are required by U.S. law to install state-of-the-art automatic man overboard systems).         

It's only a matter of time before a major newspaper in the U.K. digs into this appalling story and P&O's tattered image is further sullied. No one wants to see a home-town U.K. company take such a hit. You have hard working staff who deserve better than go down with a ship sinking in the eyes of the public. But even former P&O ferry workers have signed Marianne's petition and proclaimed to the public that it is unreasonable and irresponsible for P&O to refuse to install CCTV. They are saying George Smith - Royal Caribbeanwhat many of your tired staff are probably thinking.

Let me quickly tell you a few lessons from cruise CEO's here in Miami, the cruise capital of the world, who have failed miserably handling public relations disasters. There are lessons to be learned.  

Cruise passenger George Smith disappeared in 2005 during his honeymoon cruise. When a passenger photographed a blood soaked awning on the ship, the story went viral. Royal Caribbean fought a war on the cable news for a year claiming that Mr. Smith was drunk and it could not have prevented his death. The cruise ship had no CCTV cameras or overboard systems. We represented Mr. Smith's widow and appeared on FOX News, MSNBC, CNN and the major networks bickering with the cruise line's PR representatives, safety managers and even the Chairman Richard Fain on Larry King Live. A Congressional hearing was convened about cruise passenger safety, followed by six other Congressional hearings in the House and Senate which continue today. It turned out that Mr. Smith didn't just fall overboard as the cruise line said. He was likely thrown overboard by other Royal Caribbean passengers. The cruise lines were subsequently ordered not only to install CCTV cameras but automatic man overboard systems on all of their cruise ships, but not before the Miami-based cruise lines tarnished their image. 

Another lesson comes from the debacle of Carnival CEO Micky Arison who, by all accounts, acted callously after the Carnival owned Costa Concordia capsized off the coast of Italy and killed 32 passengers and crew and terrorized thousands. He was roundly criticized for his apparent indifference Costa Concordia to the disaster involving one of his over 100 cruise ships. But he didn't seem to care. He continued to focus just on profits and losses (and his Miami Heat basketball team) and not the human suffering created by his irresponsible captain. As additional Carnival disasters and embarrassments (like the infamous Carnival poop cruise) unfolded, Arison stayed indifferent to the plight of his suffering cruise line guests. His once proud and popular cruise company became the laughing stock of late night comedians. When the Carnival earnings and stock flattened out, his board removed him as CEO. The new CEO has spent hundreds of million of dollars in safety improvements to the ships in the neglected fleet. 

How will you respond to the PR nightmare facing your company?  The P&O website is filled with thousands of well reasoned and succinctly written criticisms about the line's perceived insensitivity and lack of ethics. Continuing to slough the matter off to your PR team will only make matters worse.

Now one other cruise CEO story to tell. Here's a hint how to turn things around.

When the Royal Caribbean Grandeur of the Sea caught on fire earlier this year, the passengers faced a raging 2 hour fire after the automatic fire suppression system failed to operate. Royal Caribbean faced a major PR problem, especially coming on the heels of other well publicized Carnival mishaps. But unlike Carnival's CEO Arison, Royal Caribbean's CEO Adam Goldstein jumped on a jet to the Adam Goldstein Cruise Fire Bahamas where he quickly met up with the burned ship. I'm not a fan of Mr. Goldstein, but this time he was a man of action with the right attitude.  He was photographed inspecting the scene of the fire and discussing the fire while drinking iced tea with the passengers. He apologized profusely and promised improvements to his ships. The public quickly forgave the cruise line for the fire, and praised the cruise CEO for his quick action, transparency and concern for his guests.

The press is coming after you Ms. Deeble. The public outrage is growing. The nation is learning that other passengers and crew have disappeared off your ships. The time for mysteries is over. The Fearnside petition will shortly have over 100,000 signatures. Legislation requiring CCTV is inevitable.

How are you going to respond. Will you even respond?

My suggestion?   

You are the past President of the U.K. Chamber of Shipping. You're highly respected and influential in your industry. Others will follow your lead. 

Its time to get out from behind the desk. Put your financial papers aside for a moment. Drive the short distance over to Marianne's house. You both live in Kent. Invite yourself in for a cup of tea. No lawyers, just you and Marianne. Make a New Year's promise to her to install CCTV on your ferries. Future passengers and your own crew deserve it. And bring your photographers too. The public will love the image of you doing the right thing, and saving your company in the process. 

Respectfully,

Jim Walker

Cruise CEO Arnold Donald's First Blunder: Carnival Guts Crew Retirement Benefits

Last month, the Sun Sentinel reported that Carnival's earnings "continue to be hurt by a series of embarrassing mishaps and softened demand for certain cruises that has kept fares low." The world's largest cruise operator reported a 30 percent drop in third-quarter profits.

Critics have attributed Carnival's woes to damage to its namesake cruise line's "Fun Ship" image after several cruise ships caught fire and/or lost power at sea. The most serious incidents involved loss of propulsion and power to the Carnival Splendor and the Carnival Triumph, stranding many thousands of passengers under unsanitary and unpleasant conditions.

Carnival Donald Arnold - Micky ArisonThis summer Micky Arison stepped down as Carnival CEO and a businessman, Donald Arnold, formerly of chemical giant Monsanto, stepped in as the new cruise CEO to try and right the ship. In June, Forbes magazine published an article about Mr. Arnold. The magazine quoted him saying the following about Carnival: "Here’s what success looks like. Our employees feel very confident in the future of the company. They legitimately feel like winners . . .

But Forbes didn't share the CEO's gushing enthusiasm. In order to be successful, Forbes cautioned, "Donald has to cut costs." 

Yesterday I wrote that Carnival embarked on a major cost-cutting campaign by freezing all of the retirement benefits for the crew members working for Carnival Cruise Lines. There are some 24 Carnival Cruise Line cruise ships with over 20,000 crew members working aboard the ships.  Cutting an average of just $5,000 per crew member may result in a savings of $100,000,000 over the next few years.

But at what cost in loss of morale? I doubt that the affected crew members "feel very confident in the future of the company" now, considering the comments to our article yesterday:

A comment from a crew member:  ". . . This is terribly disadvantageous and unfair if not outright discriminatory to the more than 6,000 Filipino crew members who have been working hard for Carnival Cruise Lines all these years. This retirement benefit is so important and is the very reason crew members chose to stay with Carnival for at least 10 years . . ." 

A comment from a former crew member:  "I retired from Carnival 4 years ago in order to pursue a university education. At that point I was at cross roads whether to stay or go. I am glad I choose go."

A tweet by a cruise fan: "This will trickle down 2 to me the passenger & not in a good way. Carnival could become the Self Serve Cruise Ships."

You can read other comments here or on our Facebook page.

As of publishing this article, Carnival still describes its "Fun Ship Retirement Plan" as providing a "lump-sum benefit upon team members’ retirement from Carnival, provided they have at least 10 years of continuous service . . . The longer a team member is employed beyond the initial 10-year period, the faster the benefits increase. Simply put, the longer you stay with Carnival, the larger your benefit payment will be upon your retirement."

But that's no longer true. 

Carnival announced over the last two years that it is investing hundreds of millions of dollars in its ships in technology, equipment and safety systems to avoid a repeat of the Splendor and Triumph mishaps and the Concordia disaster.  But it is taking money out of its loyal crew members to do so. It's no different that robbing Peter to pay Paul.      

There's not much the crew can do. The last time Carnival crew members went on strike for protesting low wages and the cruise line's withholding of their tips, they were all terminated, sent back to India, and blackballed from ever working on the cruise industry.

Do Carnival crew members feel like the "winners" Mr. Arnold described this summer? Should the crew feel confident in their future with Carnival?  

I suspect right now that the crew members feel like losers, cheated by the company which still promises on its website that ship employees will benefit by staying longer at Carnival.   

 

Photo Credit: Local10.com

"CNN Effect" Doesn't Stop Royal Caribbean CEO From Buying Nearly $1,000,000 in RCL Cruise Stock

Yesterday, I wrote a short article about Royal Caribbean President Adam Goldstein selling 2,181 shares of RCL cruise stock earlier this week at an average price of $36.80, for a total value of $80,260.80. Cruise executives buying and selling their company's own stock is interesting to me as an indicator into their true thoughts about the direction of their business' future.

That being said, an cruise executive's sale of only $80,000 worth of stock doesn't say much. $80,000 may pay the annual wages of a dozen RCL utility cleaners but it's pocket change for a cruise line president. Goldstein still owns 335,654 shares of the company’s stock worth over $12,350,000.   

But today Forbes reports that Royal Caribbean CEO Richard Fain purchased 26,800 shares of RCL stock which, at a price of $36.82 a share, turns out to be $985,776.

As Forbes writes: "company’s own top management tend to have the best inside view into the business, so when company officers make major buys, investors are wise to take notice."

RCL’s low point in its 52 week range is $24.16 per share. Its 52 week high is $38.62. 

So CEO Fain is buying near the top of the chart. Seems risky to me.

As we mentioned this week, research firms are split on RCL's stock. One analyst gave the stock a "sell" rating, nine analysts assigned a "hold" rating and ten issued a "buy" rating. RCL currently has a consensus rating of “hold” and a consensus target price of $40.21.

Royal Caribbean Cruise Richard Fain Travel Weekly quoted Fain at the cruise line's second-quarter earning call last week. He said that despite the “unrelenting pressure of a deluge of negative publicity” on the cruise industry, things are looking up. Mr. Fain said the company is overcoming what he called the "CNN effect” of negative media scrutiny on things like highly publicized cruise ship fires that have occurred this year.

Royal Caribbean suffered a serious fire to its Grandeur of the Seas. And just last month, it's subsidiary brand Pullmantur's Zenith suffered an engine room fire which disabled the ship which needed to be pulled by tugs to back to shore.  

Royal Caribbean is also suffering from the spill-over effect from the negative publicity caused by Carnival's Costa Concordia disaster and the Triumph's infamous "poop cruise," in addition to other Carnival cruise ship mishaps.   

Does Mr. Fain know something that the analysts and the public doesn't know? Or this really a big calculated bluff to prime the pump of positive thinking?

I am not too sure that I would bank on a more positive public perception of the cruise industry developing naturally. The "CNN effect" is real.  In my opinion, the images broadcast by CNN are a lot more persuasive and powerful than the positive musings of a hopeful cruise executive.  

Plus there's a couple of things to keep in mind. There are increasing cut backs in RCL officer and staff salaries and crew pay coupled with an increase in their responsibilities which are deteriorating morale on the ships. Some of the tips which formerly went to the RCL cabin attendants and waiters are being channeled away from the crew to the company's income stream and destroying the crew's attitude in the process. And the MLC will come onto effect next month, restricting crew member working excessive hours, which may increase RCL's costs, restrict the cruise line's historical exploitation of its crew, and push its profit margins down.

Royal Caribbean Grandeur of the SeasRCL's cost cutting measures helped it to squeeze out a profit this past quarter, but it was under $25 million on gross revenues of $1.88 billion. How much more can RCL cut from the already overworked and underpaid crew?

And no cruise executive pumping up a stock price would dare mention Senator Rockefeller's announcement last week that he intends to introduce legislation to take away the loopholes in the U.S. tax code which permits the cruise lines to avoid U.S. taxes on its foreign flagged cruise ships.

Are brighter days ahead for RCL and CEO Fain's newly acquired 26,800 shares?

Maybe. Maybe not. But one thing is certain. All it will take is for one cruise ship to suffer another engine room fire for the "CNN effect" to send the RCL stock price plummeting south.

July 31 2013 Update: Watch List News reports that Royal Caribbean Cruises' President  Adam Goldstein "dumped 16,717 shares of the stock on the open market in a transaction that occurred on Tuesday, July 30th. The stock was sold at an average price of $37.20, for a total value of $621,872.40."

 

Photo Credit:

Top: Royal Caribbean Press Center

Bottom: Janeeva Russell / The Freeport Times / AP

Royal Caribbean President Sells 2,181 Shares of Cruise Stock

RCL Adam Goldstein The Daily Political reports that Royal Caribbean President Adam Goldstein (left) unloaded 2,181 shares of RCL cruise stock yesterday at an average price of $36.80, for a total value of $80,260.80.

Goldstein still owns 335,654 shares of the company’s stock worth over $12,350,000. 

A number of research firms have recently commented on RCL's stock value. One analyst gave the stock a "sell" rating, nine analysts assigned a "hold" rating and ten issued a "buy" rating to the company’s stock. RCL currently has a consensus rating of “hold” and a consensus target price of $40.21.

The stock has a 52 week low of $24.16 and a 52 week high of $38.62. 

Royal Caribbean posted its quarterly earnings last week. The company had revenue of $1.88 billion for the quarter, with a profit of under $25,000,000.  

RCL Chairman Richard Fain (below right) said that a fire on the Royal Caribbean cruise ship Grandeur of the Seas, weak pricing in the Caribbean and itinerary disruptions in Asia affected earnings in the second quarter. 

RCL Chairman Richard FainThe cruise line's business model is predicated on its avoidance of U.S. taxes and regulations, such as minimum wage, overtime, and OHSA regulations. Royal Caribbean avoids taxes and many U.S. regulations by incorporating itself in Africa and incorporating its cruise ships in places like the Bahamas and Malta.

Royal Caribbean and its subsidiaries are currently exempt from U.S. corporate tax on U.S. source income from the international operation of cruise ships pursuant to Section 883 of the Internal Revenue Code.

Senator Rockefeller stated at a Senate hearing last week that he would introduce legislation to close loopholes in the federal tax code which permits foreign incorporated companies operating foreign flagged cruise ships to avoid paying their fair share of U.S. taxes.

If such legislation was enacted into law, the RCL stock value would plummet. 

July 21 2013 Update: Watch List News reports that Royal Caribbean Cruises' President Adam Goldstein "dumped 16,717 shares of the stock on the open market in a transaction that occurred on Tuesday, July 30th. The stock was sold at an average price of $37.20, for a total value of $621,872.40."

 

Photo Credits: Top - NBC News; Bottom - Examiner.com

Breaking News: Carnival Incorporates in the U.S. and Subjects Itself to U.S. Tax, Labor, Wage, Safety & Environmental Regulations

In an exclusive story, Cruise Line News has learned that cruise industry giant Carnival Corporation recently incorporated its business in the United States (in the state of Delaware). Carnival intends to announce this historic development tomorrow, April 2nd, at Carnival's headquarters in Miami.

Since 1972, Carnival has incorporated its business and registered its cruise ships in the country of Panama. For over 40 years, Carnival cruise ships have flown the flag of Panama in order to avoid the onerous safety regulations, excessive labor laws, unreasonable environmental laws, and high taxes of the United States of America.

Cruise Law News' discovery of this historic event came about when prominent maritime lawyer Jim Walker bumped into Carnival's CEO Micky Arison at court side when Arison's championship basketball team, the Miami Heat, won another game.  Maritime ace lawyer Walker asked Arison: "Micky, if Dwayne Wade and LeBron James earn several hundred million dollars from Carnival and pay Micky Arison - Miami Heat - Carnival Cruisetens of millions of dollars in U.S. taxes, don't you think it is fair that Carnival - which earns over 15 billion dollars a year in cruise ticket sale - pays a few billion dollars in U.S. taxes?"

Perhaps it was the euphoria of the Heat beating the San Antonia Spurs by two points in a close overtime victory, but Micky was ecstatic. "Yes, let's do it!" he said handing maritime lawyer Walker a half-eaten hot dog and three-quarters of a warm Bud Light which a Miami cheerleader handed Micky in the first quarter of the previous game a few days earlier.

While quickly consuming the beer and hot dog in the excitement of the moment, expert cruise lawyer Walker happened to have U.S. articles of incorporation which he handed to Micky to sign as well as U.S. flags to fly on the Carnival fleet of cruise ships.

Arison has been under intense pressure lately following fires, collisions, sinkings, pirate-attacks, flounderings, norovirus outbreaks and a Jon Secada onboard concert which have ruined the last 37 Carnival cruises.  Just last week Senator Jay Rockefeller called Arison a "scallywag" on national TV. Rockefeller challenged Arison to pay his fair share of U.S. taxes on the bounty his foreign-flagged cruise ships collect on the high seas. 

Micky commented that he was embarrassed that his father Ted, the founder of Carnival Cruise Lines 40 years ago, denounced his U.S. citizenship in order to avoid paying some 10 billion dollars in U.S. taxes.

"I want to make certain that Carnival pays one hundred % of our U.S. tax obligations (estimated to be over $5,000,000,000 a year) plus be subjected to the most rigorous U.S. safety, wage,and labor laws and the most stringent U.S. environmental regulations, Micky announced over the arena's PA system! "I want Carnival Cruise Line to be synonymous with Old Betsy - the U.S. Stars and Stripes - what the U.S. stands for! Its time that indigent crew members from India and Nicaragua who earn $500 working 360 hours a month be entitled to the full benefit of U.S. employment laws, a 401(k) retirement fund, severance pay, and a college fund for their children!"

While appreciative of Arison's change of heart, sources say Walker was miffed that Arison demanded that he pay $6 for the remains of the hot dog and $7.50 for the rest of the Bud Light.

April 1 2013 Update: South Florida Business Journal picks up on this shocking development in the cruise industry. Read here.

Carnival Cruise CEO Arison Pockets $90,000,000

Miami's Daily Business Review reports today that Micky Arison paid himself a "special year-end dividend" of $90,000,000. Yes, that's 90 million dollars.

Cruise CEO Arison is not the only executive in Florida lining his pockets, as the Review states that other executives in Florida are paying themselves dividends in the range of $250,000 to around $20,000,000. The newspaper states that the whopper of a dividend was probably paid due to expectations that federal tax rates will jump next year. I suppose that's called the "Romney-didn't-win-dividend."

Arison is already by far the richest person in Florida with a net worth of many billions of dollars. The last time I checked it was over $4,000,000,000, or maybe it was $7,000,000,000. I forget. What's an extra billion or two?

Costa Concordia - Micky ArisonI was thinking of entitling this blog "Micky Arison is a fat greedy pig" but at least one journalist already called him that over a decade ago. So I'll keep what I'm thinking to myself.

But, I have to add that it must be something to be the CEO of a foreign corporation that pays no U.S. federal taxes and owns a $600,000,000 cruise ship which sank (the Concordia operated by subsidiary Costa) and killed 32 people and at the end of the year you pay yourself an additional $90,000,000. Yes, the disaster caused some lost revenue for Carnival for a few months. But by the end of the year, Carnival profits are higher than ever. 32 dead customers and crew are not a problem if you keep them from filing suit in the U.S. 

While Arison pays himself a dividend of $90,000,000, he offered the families of the dead and traumatized Concordia passengers $15,000 each. 

When I think of Arison paying himself an extra $90,000.000, I also think of the 150 waiters from India who worked for P&O Cruises (another Carnival subsidiary) who were fired earlier this year at the instructions of Carnival's executives after they went on strike for about an hour in Seattle over low pay and the non-payment of tips. There are now 150 families struggling in India because Carnival made an example of them to show what happens if crew members in Carnival's fleet of 100 cruise ships complain about low pay.

Earlier this week, Arison's cruise line ignited controversy by issuing a last minute edict that passengers who bought tickets on Carnival's drag queen cruise would not be permitted to dress in drag in order to avoid offending "family values." When a boycott was threatened that might result in Carnival losing millions from the offended LGBT community, Carnival reconsidered and lifted the ban on dressing drag.

Always following the money, Arison obviously thought that paying himself a $90,000,000 dividend was not a drag either.   

I wonder what Arison will do with the extra $90,000,000?  Raise wages for his loyal employees on his cruise ships? Invest in a health clinic in India for Carnival crew? Donate the money to a charity for sick seafarers?  Ha. That's something Bill Gates or Warren Buffett would do.  

Read some of our other articles about CEO Arison and judge for yourself. 

Cruise Line Fat Cat Billionaires    

Breaking News: Carnival Cruise Lines Incorporates in the U.S. and Subjects Itself to U.S. Labor, Wage, Safety and Environmental Regulations

Is Carnival's Mickey Arison a Greedy Corporate Pig?

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Royal Caribbean Executives Get Richer While Crew Members Get Poorer

In a proxy filing with the Securities and Exchange Commission, Royal Caribbean Cruises disclosed that its 2010 compensation paid to CEO Richard Fain (photo left) increased almost 60% to $8,600,000.  Royal Caribbean increased the compensation paid to the company's four other named executives from 18.5% to almost 50%.  The largest compensation increase of the four executives  went to Adam Goldstein (photo right), the president of Royal Caribbean International, whose total compensation increased to over $4,000,000. 

These increases were primarily incentive based, meaning that the executives met or exceeded Royal Caribbean Executives - Richard Fain - Adam Goldsteincertain financial goals for the corporation.

One of the company's goal we have been concerned with has been to reduce payments to ill and injured crew members.  In 2008, Royal Caribbean had over over 1,200 open medical files for ill and injured crew members around the world.  Due to certain cost cutting measures, by 2010 Royal Caribbean slashed the number of open crew medical files to around 400. 

In the process, the cruise line culled over 800 ill crew members from its medical department's responsibility.  In many instances, there was no legal basis to terminate the medical care.  In cases where the medical care was not arbitrarily terminated, the cruise line reduced the daily stipend for sick crew employees from $25 to $12 a day.  Needless to say, it is impossible for anyone to live on $12 for food and lodging a day.

These harsh cost cutting measures "saved" Royal Caribbean millions.  Given the fact that cruise executives Fain and Goldstein collected over $12,500,000 together last year, it looks like the money formerly spent on crew member medical benefits ended up in the executives' pockets.   

 

Photo credit:  Royal Caribbean International Flickr photostream