There were two news stories this past week which prove that the maxim “rich cruise tycoons get richer” remains true while the debt-strapped cruise industry continues to struggle. Business Insider reported that Royal Caribbean Cruises, Ltd. CEO Jason Liberty collected $10,760,000 last year. Meanwhile, crew members on Royal Caribbean cruise ships made a median annual wages of just $15,264.
No executive is worth 705 times more than an average employee, but this is business as usual in an industry where crew members work twelve hour plus days for as long as eight to ten months without a single day off to earn only a fraction of the exorbitant compensation packages of the wealthy cruise executives.
The shipping trade newspaper Tradewinds was at least partially right when it wrote that the cruise industry is “floating in a sea of debt.” The only issue is whether it’s more accurate to say that the industry is taking on water and slowly sinking. Three of the major lines have debt in excess of $72,000,000,000 which Tradewinds characterized as “unprecedented” and “astronomical.” “Carnival is $35,000,000,000 in the hole, Royal Caribbean owes $24,000,000,000 and Norwegian owes $13,400,000,000.” All of the cruise lines have consistently lost money since 2020 and, as Tradewinds noted, are “still suffering the financial strains of the pandemic.” Tradewinds quoted Carnival CEO Josh Weinstein saying that Carnival “expects to report an annual adjusted loss of $350,000,000 to $550,000,000 for 2023.”
Yet, cruise executives have all received generous if not outrageously extravagant compensation packages of many tens of millions of dollars as well as every imaginable executive perk.
The most egregious example of the outrageous executive vs. crew member pay ratio again involves the compensation of the perennially greedy Norwegian Cruise Line Holdings CEO Frank Del Rio. The compensation of the NCLH CEO last year was reported by Seatrade Cruise News to be $21,200,000.
Given the fact that the median salary of NCL crew members is just $19,319 shows an obscene pay ratio of over 1,092 to 1.
Del Rio’s compensation in just the last four (4) years has been a whopping $95,100,000.
NCLH reached a high of nearly $60 a share in January of 2020 before the deadly COVID-19 pandemic when the Centers for Disease Control (CDC) finally shuttered the cruise industry in March 2020. NCLH, like other cruise lines, took on exorbitant debt (now over $13,000,000,000) in order to survive. Since then, NCLH has remained unprofitable as its stock has dropped over 77% to last week’s close of $13.35. Notwithstanding its shaky economic status which resulted in the company laying off hundreds of shore-side employees and leaving crew members unpaid and languishing at sea. CEO Del Rio consistently received enormous compensation as high as $36,4000,000,000 in 2020, the first year of the pandemic.
Earlier this year, Del Rio announced that that he was retiring at the end of June of this year, but not before he placed his son, 44-year-old Frank Del Rio Jr., as president of the NCLH brand Oceania Cruises. In addition to a base annual salary of $500,000.00, like his father he will enjoy incentive and equity bonuses, “retirement, welfare and fringe benefits,” a medical executive reimbursement plan, a cash car allowance of $1,500.00 per month / $18,000 per year, and paid vacation of four (4) weeks per year. (Frank Jr.’s employment contract is attached).
Tomorrow, NCLH will announce its first quarter financial results. Some analysts suggest that the company has enjoyed increased passenger ticket revenues and improving booking trends, while others point to its crippling debt and significant cruise operating expenses and cost increases as likely resulting in another disappointing, unprofitable quarter. But whatever comes tomorrow, cruise tycoon Del Rio and his prodigy will enjoy their rich lifestyles as their ship employees continue to work twelve-hours a days with no time off.
Interested in this topic? Consider reading from four years ago: Cruise Line CEO’s Income: The Rich Get Richer – NCL Del Rio Collects Over $22,500,000 Last Year and The Highest Paid Cruise Industry CEOs by Skift (“Everybody in the cruise business suffered during Covid except CEOs, it seemed. As passengers canceled or got sick, and workers got laid off (but) executive compensation topped 1,000 times the median worker’s pay. Including tips . . . Don’t take the media’s word for it that Norwegian Cruise Line Holdings CEO Frank Del Rio is overpaid.”)
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Image credit: Jason Liberty – Loic Venance /AFP via Getty Images via Business Insider; Frank Del Rio – Fox News.