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 certain 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