Norwegian Cruise Line Holding’s CEO Frank Del Rio (photo above, via CNBC, in happier times in 2019) collected $17,808,364 in compensation last year, including $12,201,324 in stock awards and $3,600,000 in incentive plan compensation according to SEC filings. His compensation was down from 2018 when he collected nearly $22,600,000. Del Rio has collected over $85,000,000 in the last five years.

CEO Del Rio is one of several heavily paid cruise executives working for the three brands operating under the HCLH group, which consists of NCL, Oceania, and Regent. Additionally, former NCL President Andrew Stuart collected around $5,500,000 and NCL Vice President Mark Kempa collected a little over $4,000,000 last year. Oceania CEO Robert Binder collected almost $6,000,000 and the Regent CEO Jason Montague collected over $4,000,000 last year. In total, the NCLH excecutives collected a whopping $37,112,263 last year.

This means that last year alone CEO Del Rio collected over one thousand times more than the median wages of a NCL crew member who earned an annual income of a little less than $17,000 according to information submitted to the SEC by NCL. A NCL median employee was defined in SEC filings as a “full-time employee located on one of the NCL ships with an annual total compensation of $16,925 for 2019.”  This results in a compensation ratio between CEO Del Rio and a median crew members of “1,052 to 1” according to the SEC filing.

Last month, Business Insider reported that NCL cut the pay of its shore-side salaried workers by 20% and was moving to a 4-day work week. There is no indication that any of the NCLH executives took a pay cut.

Many NCL crew members state that they have been recently asked to waive their right to receive wages in the future. There are many thousands of NCL, Oceania, and Regent ship employees still stuck at sea away from their loved ones.

COVID-19 has pummeled NCL’s stock price in the last several months. NCL stock fell from a high of nearly $60 a share to a low of slightly more than $7 share, with a current price of around $16 a share.

On Monday, NCL withdrew its 2020 forecast and stated that it would cut spending by about $515,000,000, according to an article by Reuters. It previously announced that it was extending the suspension of its cruise ships to June 30th amid the coronavirus pandemic (notwithstanding the CDC’s order that, absent a change, cruising from U.S. ports was supended to at least July 24th).

On our firm’s Facebook page, we rhetorically asked how NCL planned to cut over $500,000,000 in spending.  From what NCL is doing, it appears that it is attempting to accomplish this goal by: (1) not paying its crew, (2) hoping the guests’ home countries will fly their crew home, (3) not paying COVID19 -related medical expenses of its ill crew members once it sends them home, and (4) holding onto its guests’ refunds.

And how do you think Norwegian Cruise Line (NCL) will cut spending: (1) not paying its crew (2) hoping the crew's home…

Posted by Cruise Law News on Tuesday, April 28, 2020

At least one reader commented: “maybe by not overpaying their CEO so much? We can hope, right?” 

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Update:

Several readers have asked how NCL’s CEO compenssation-crew member wages ratio compares to other cruise lines. For Carnival Corporation’s CEO Arnold Donald, his total compensation of $11,149,514 in 2019 compared to the median wages of a Carnival crew member of $15,429 results in a ratio of 723:1. For Royal Caribbean’s CEO Richard Fain, his total compensation of $12,422,715 in 2018 compared to the median wages of a Royal Caribbean crew member of $19,396 results in ratio of 640:1.

Photo credit: CNBC