Royal Caribbean Cruises’ CEO Richard Fain (photo top in happier days) collected $14,358,919 in compensation in 2019, the cruise line announced two weeks ago in a SEC filing.
Two days earlier, Royal Caribbean announced that it was laying off 25% of its workforce in the United States, due to the COVID-19 pandemic. In addition, Royal Caribbean announced the “early conclusion of many crew contracts.” Last month, Royal Caribbean laid off 1,000 contractors.
Royal Caribbean SEC filings indicate that prior to the COVID-19 pandemic, the cruise line employed approximately 77,000 employees, which includes 70,000 shipboard employees, and 7,000 full-time employees in its shoreside operations.
Mr. Fain has collected an average of $12,000,000 a year in compensation each year for the last 6 years for a total of approximately $72,000,000. He earned $12,422,715 in 2018, $13,343,413 in 2017, $10,405,684 in 2016, $9,388,569 in 2016 and $12,013,878 in 2015.
In the beginning of April, Mr. Fain announced that he was forgoing six months (through the end of September) of his $1,100,000 base salary which turns out to be around $550,000. This may see like a substantial amount of money, but it is only around 3.5% of his compensation last year. Mr. Fain received around $13,100,000 of his compensation in stock awards, incentive plans compensation, increases in his pension plan and other compensation.
The White House picked CEO Fain to be one of three cruise executives on President Trump’s “Great American Economic Revival” industry group.
RCL stock has taken a hit due to COVID-19. In the last month it fell from a year-to-date high of around $133 a share to a low of around just $22 a share. It last closed around $37 a share.
The timing of the news of CEO Fain’s substantial income last year will be “salt in the wound” for over fifteen hundred shore-side employees and many thousands of unpaid crew members who remain on ships at sea wating to be returned home. Several hundreds of crew employees are ill with COVID-19.
CNBC interviewed Mr. Fain on Febuary 4, 2020, when Carnival announced its first coronavirus case on the Diamond Princess in Japan. He was pleased with the company’s call volume and the pace of reservations at the time and said that he was not worried because his company was seeing “very little impact” from the virus. You can see the interview here.
Exactly six weeks later, RCL stock hit a low of $22 a share and Mr. Fain had lost around $100,000,000 in the value of his RCL stock by this time.
At the time of the interview, COVID-19 was just beginning to spread throughout the cruise industry. Mr. Fain’s quote of COVID-19 having “very little impact” on Royal Carribean has not aged well. As of today, there are thousands of Royal Caribbean members stuck on ships off the coast of Florida, with hundreds sick. There are reportedly over 150 crew members ill on the Symphony of the Seas alone and several crew members have died.
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April 18, 2020 Update: A second Royal Caribbean crew member, Dexter Joyosa from the Philippines, died today. He was employed as a bar waiter on the Oasis of the Seas.
Photo credits: CNBC