Royal Caribbean Chairman Richard Fain remains the highest paid executive in the cruise industry. 

Mr. Fain is the highest paid cruise executive for the second year in a row. Mr. Fain was paid $13,343,413 last year (2017), an increase of nearly three million dollars, from $10,405,684 in 2016. 

Royal Caribbean enjoyed a record earnings year in 2017.

The Miami-based cruise line just reported strong first quarterly returns for 2018 – net income of RCCL Chairman Richard Fain$218,700.000 (million), revenues of $2,027,000,000 (billion) and passenger ticket revenues of $1,425,000,000 (billion). 

Financial records also reveal that Mr. Fain sold 20,000 shares of RCL stock two weeks ago. In a transaction dated Friday, April 13th, he sold 17,500 shares of stock at an average price of $114.84, and 2,500 shares at an average price of $115.40 for a total transaction of nearly  $2,300,000.00. Following the sale, SEC records reflect that the chief executive officer now own 882,537 shares of the company’s stock, valued at over approximately $100,000,000. 

Royal Caribbean is the leader of the "over-sized" cruise ship club (think Oasis of the Seas, Allure of the Seas, Harmony of the Seas) with its newest billion-dollar Oasis-class ship (and largest cruise ship in the world) Symphony of the Seas which was delivered from the shipyard last month.

But can the cruise business support the many huge ships coming on line? Skift just published Royal Caribbean Ups Forecast But Wall Street Worries About Too Many Ships.

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Interested in this issue? We suggest reading Fearless Fain, Royal Caribbean’s CEO.

Photo Credit: Carmen Molino YouTube – "Symphony of the Seas delivery. Richard Fain talks to the audience."

Royal Caribbean announced its fourth quarter financial results with CEO Richard Fain stating that the cruise company received revenues of $2,000,000,000 with net profits of $288,040,000. Royal Caribbean’s fourth-quarter profits and revenues reportedly exceeded Wall Street estimates,

Mr. Fain told CNBC that the company met its lofty three-year goals of “double earnings” and a “double-digit” return on invested capital. In response the Royal Caribbean executive stated yesterday that Royal Caribbean employees will each receive a bonuses in the amount of 5% of their annual salary.

Investor Place reports that the cruise line will be distributing the bonus to its 66,000 employees. This Roya; Caribean CEO Richard Fainwill include shore-side and shipboard employees. This bonuses will be in the form of “equity grants” which will vest over three years. RCL reports that total spending on the bonuses will be $80 million.

Crew members state that their annual minimum guaranteed salaries range from $500 to $600 a month for a pot-washer to around $800 to $1,300 for a waiter, cabin attendant or bar tender. These Royal Caribbean ship  employees typically work contracts of around 6 to 8 months straight which turns out to working approximately 9 months a year. So a 5% bonus turns out to be around $225 to $270 for a pot-washer to around $350 to $550 for waiters, cabin attendants and bartenders, to be paid over the course of three years.

Meanwhile, CEO Fain reportedly sold 20,000 shares of Royal Caribbean Cruises stock in a transaction on January 16th. The stock was sold at an average price of $128.10, for a total transaction of $2,562,000.00. Following the sale, the chief executive officer now directly owns 807,741 shares of the company’s stock, valued at $103,471,622.10, according to SEC records. Ms. Fain indirectly owns another 216,206 shares which, at a price of $128.10 each, have a value of $27,695,988.60. Mr. Fain’s’ direct and indirect holdings of RCL stock are valued at $131,167,610.70, at the price of $128.10 a share.

RCL shares are now worth around $132 a share, up approximately $4 more a share since last week, so Mr. Fain’s RCL total RCL shares are now worth around $4,000,000 more than they were at the time of the sale last week.

The point is, that although it’s to be commended in theory that crew members will be rewarded for their hard work with bonuses, the amounts to be paid to the crew in question are rather minuscule, especially because they are to be paid over the course of the next three years rather than in a single check now. The bulk of the $80 million to be paid in bonuses will primarily go to the higher paid shore-side workers. So be sure to tip the crew members with cash when you cruise.

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Photo credit: CNBC

Former Norwegian Cruise Line ("NCL") CEO Colin Veitch’s trial against his successor, Kevin  Sheehan, and their old cruise line, NCL, for defamation and breach of contract has been underway in the Miami-Dade County courthouse, here in Miami, Florida this past week.

Veitch worked at the helm of NCL from 2000 to 2008. According to Travel Weekly, Veitch was the architect of "Freestyle Cruising" and undertook an ambitious fleet renewal program, purchasing nine new cruise ships. By some accounts, but  not all, Veitch was an innovative cruise executive who was successful in beginning the transformation of under-performing old cruise ships into a larger and far more profitable fleet. 

Veitch turned the revitalized cruise line over to Sheehan in 2008. Things turned sour between the two NCL Colin Veitchrich cruise executives after a travel periodical, Travel Weekly, wrote a glowing article in December of 2014 about Veitch and his success at NCL. Sheehan then sent an email to Travel Weekly mocking the article and criticizing Veitch. The Miami Herald reported at the time, quoting the lawsuit allegations, that Sheehan sent a “vindictive, false and defamatory” email to Travel Weekly which eventually published. A few days later, Travel Weekly retracted the complimentary article about Veitch.

Veitch then sued Sheehan and NCL alleging defamation, as well as breach of contract, claiming that his former cruise line and its new CEO allegedly cheated him out of revenue sharing. 

The overblown 187-page lawsuit which you can review here is, in my opinion, a rather fascinating insight into the hurt-feelings and out-of-control personalities of two multi-millionaire former NCL cruise executives.

The lawsuit which Veitch filed against Sheehan included allegations which have been characterized by the Skift travel publication as "incendiary" accusations that Mr. Sheehan engaged in “a long pattern of personal and professional misconduct and recklessness, stunning in its scope and hubris, corrosive and detrimental in its impact on the company, and deeply undermining of the workplace culture . . . ” 

In response, Mr. Sheehan and NCL asked the court to strike what they characterized as "immaterial, impertinent and scandalous" allegations. 

The bitter personal allegations between these two former cruise executives arise from a nasty dispute between two very wealthy former cruise executives.  When Mr. Veitch resigned from NCL’s parent company, Star Cruises, he reportedly received $10,000,000 as part of a severance package. He also settled a $300,000,000 lawsuit which he filed against Sir Richard Branson and the Virgin Group after he alleged that the British billionaire and his company stole his ideas for a new cruise project. The precise amount of money that Veitch pocketed is confidential. 

Kevin SheehanSheehan also received a severance package from NCL in 2015 after it terminated his employment, totaling $13,400,000.

The many articles written by trade publications and major newspapers in Miami. like the Miami Herald and the Miami New Times, have covered the Veitch-Sheehan squabbles at length, but they are ignoring the biter irony of the litigation. Veitch was the NCL CEO in 2003 when a decrepit, poorly maintained steam boiler on NCL’s 40+ year-old SS Norway exploded at the port of Miami. The explosion killed eight crew members and seriously burned another nineteen NCL crew members.

The National Transportation Safety Board ("NTBS") concluded that the deadly boiler explosion was caused by NCL’s "improper operation, maintenance and inspection" of the old cruise ship’s steam chamber. The old boiler had "extensive fatigue cracking" and deteriorated materials that weakened the metal and caused it to rupture under pressure. The NTSB reported that NCL was aware of the dangerous condition but failed to take action to fix the problem. 

CEO Veitch tried to deflect blame but NCL was forced to plead guilty to a criminal charge of gross negligence regarding the explosion. The Norway was subsequently sold for scrap.

When the families of the eight dead crew members who were scalded to death filed suit in Miami to obtain compensation for the loss of their fathers and husbands, Veitch’s lawyers argued that the crew members were not entitled to file suit before a judge and jury in Miami. Instead, NCL argued, because the crew members were Filipinos, their loved ones had to pursue the extremely limited death benefits pursuant to the arbitration process in the Philippines. 

Kicking "foreign" (i.e., non-U.S.) crew members out of the American legal system was unprecedented.  Foreign crew members injured or killed due to the negligence of U.S. based shipping companies have long been permitted to have their cases resolved through jury trials under the Jones Act here in the U.S. In addition to the Jones Act, crew members have also been entitled to obtain medical treatment and daily living expenses when they are injured aboard U.S. based cruise ships Norway Boiler Explosionunder the "maintenance and cure" doctrine, one of the oldest legal American legal doctrines dating back to the early 1800’s. 

But NCL, which faced substantial liability and damages for the deaths of eight crew members and nearly twenty other ship employees burned in the explosion, sought to dismiss the cases, arguing that their only remedy was the limited benefits under the Filipino law. NCL argued that Miami was not the proper location to resolve the dispute even though it is based in Miami and the deaths occurred at the port of Miami.  In Batista v. Star Cruises, our federal court agreed with NCL and sent the cases to Manila, where Filipino law limited the widows to just $50,000 and the children to just $7,500 for the loss of their dead husbands/fathers.

Like "freestlye cruising," NCL’s unprecedented legal posturing has also been copied by NCL’s competitors Carnival, Royal Caribbean and all other cruise lines, which quickly inserted one-sided arbitration clauses into their crew member employment agreements to escape or limit their liability when things go wrong on the high seas. 

Except for Disney Cruises, all other cruise lines prohibit injured crew members from having their cases heard by juries in the U.S. legal system. Filipino seafarers are especially susceptible to being screwed by the Miami-based cruise lines, thanks to NCL’s efforts which started under Veitch’s tenure. 

During the trial last week at the Miami-Dade courthouse, where NCL crew members are barred from filing suit, Veitch’s lawyer reportedly asked the jury to consider awarding $95,000,000 in damages, according to Court View Network (CVN). That may be a proper amount to finally compensate the families of the eight Filipino crew members who were burned to death on the SS Norway back in 2003, but it seems to be an awful lot for a healthy, millionaire former cruise executive with hurt feelings. 

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December 11, 2017 UpdateAs reported by the Miami Business Review today, Norwegian Cruise Line Defeats $90M Lawsuit From Former CEO.

Photo credits:

Colin Veitch: Associated Press via the Honolulu Star-Bulletin

Kevin Sheehan: REUTERS/Brendan McDermid.

SS Norway: News7 Miami via CBS News video.

Richard Fain Royal Caribbean Royal Caribbean top executive Richard Fain reportedly sold 20,000 shares of Royal Caribbean (RCL) stock this week for a total amount of approximately $2,500,000.

In a transaction this past Monday, November 13th, he sold his shares at an an average price of $123.76, for a total value of $2,475,200.00. CEO Fain officer reportedly now owns 895,416 shares of his cruise company’s stock, valued at around $110,816,684.16. 

In August 2017, Mr. Fain sold over $24,000,000 of Royal Caribbean stock. 

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Interested in this issue? Read Cruise Executive Richard Fain Hits the Jackpot Again.

Photo Credit: Royal Caribbean Press Center

Royal Caribbean Richard FainRoyal Caribbean chief executive officer Richard D. Fain sold 210,706 shares of his cruise line stock in a transaction on Wednesday, August 2, 2017 at an average price of $115.83, for a total value of $24,406,075.98.

Mr. Fain was last in the news in April when a filing with the Securities and Exchange Commission reflected that his total compensation last year was in the amount of $10,400,000.

Maritime Executive recently reported that Royal Caribbean’s income for the second quarter reached $370 million, the highest second quarter earnings in company history. The cruise line’s financial performance, the maritime journal wrote, "vindicates Fain’s prediction that 2017 would shape up to be a ‘sensational year.’"

Following the stock sale, CEO Fain reportedly now owns 967,741 shares of his company’s stock, valued at $112,093,440.03. 

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Photo Credit: CNBC

Richard Fain  RCL Royal Caribbean CEO Richard D. Fain’s reportedly collected total compensation last year in the amount of $10,400,000 (million) compared to his total compensation in 2015 of $9,400,000 (million), according to a recent filing with the Securities and Exchange Commission.

CEO Fain recently sold 20,000 shares of  Royal Caribbean stock.  The RCL stock was sold at an average price of $94.92, for a total transaction of $1,898,400.00. Following the transaction, Mr. Fain now owns 1,027,741 shares in the company, valued at approximately $97,553,175.72. He also indirectly owns another 426,912 shares of RCL stock, for  the benefit of certain family members, worth over $40,230,479.

Interested in this issue?  Read Cruise Executive Richard Fain Hits the Jackpot Again.

Travel Weekly and Cruise Critic are reporting that Norwegian Cruise Line (NCL) is raising gratuities on April 1st from $13.50 per person, per day, to $13.99, on all ships except the Norwegian Sky. Daily gratuities for standard cabins on the Norwegian Sky will increase to $18.99 (an increase over 40%). 

Travel Weekly says that NCL will increase daily gratuities for suites from $15.50 to $16.99 on all of its ships except for the Sky where it will charge $21.99. 

It seems that there is no limit to the greed of cruise executives. NCL CEO Frank Del Rio just spoke at Seatrade Global about how the stock market was at all time high and fewer regulations and President Trump’s pro-business tax cuts were good for his business. Del Rio collected nearly $32 million in Miami Cruise Ship Capital of the World2015

Del Rio’s NCL has gouged its customers before, with extra charges, including increased room services charges, automatic gratuities and restaurant cover charges. He made this statement at an earning conference in 2015: "… we have looked across the fleet to identify areas where marginal changes … can be implemented to improve performance. A few examples include a 6.7% average increase in beverage prices, the introduction of a nominal room service fee and lower costs from renegotiated shore excursion agreements. To put into perspective how these small changes can add up quickly, every dollar increase in yield translates to approximately $15 million to the bottom line."

Of course, all the major cruise lines nickel-and-dime their customers. Royal Caribbean just began charging for room service and, in the past, increased its gratuities while attempting to create the appearance that the increases were for its hard-working crew members (Read: Loyal to Royal? Expect to Pay Higher Gratuities! And the Money’s Not for the Crew). Carnival Corp. did exactly the same thing while it also pocketed the increased gratuities (Read: Carnival Hikes Pre-Paid Gratuities But Will Passengers Secretly Remove Tips?)

Today, I read an article by David Grace Author titled When Greed Is Thought To Be A Virtue – When More Is Never Enough. He discusses what he calls the "more-more-more-until-it-all-blows-up" business phenomenon. The cruise executives, Del Rio in particular, put on quite a demonstration of unbridled greed at the Seatrade Cruise conference last week. The CEO’s have an unhealthy, unchecked pursuit of profits in an industry which has always overreached into the American public’s pockets.  The cruise industry pays virtually no taxes, exploits their workers from around the world, and still nickle-and-dimes their tax-paying customers whenever they have a chance. 

When is enough, enough? 

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Photo credit: Marc Averette – CC BY-SA 1.0, commons / wikimedia.

Caribbean PrincessThree cruise CEO’s sold their Carnival (CCL) stock a week ago for a combined total of nearly $9,500,000, according to Market Digest.

On December 29,2016, Stein Kruse, the CEO of Holland America Group, Alan Buckelew, the Chief Operations Officer of Carnival Corporation, and David Bernstein, the Chief Financial Officer and Chief Accounting Officer of Carnival Corporation each sold 60,664 shares of Carnival stock at $52.11 per share for a total value of $3,161,201.00.  

Mr. Bernstein has been the CFO and Senior Vice President of Carnival Corporation since July 2007 with oversight of all finance, accounting, treasury, insurance, tax and investor relations functions. Mr. Buckelew, who was recently appointed to the Chief Information Officer of Carnival Corporation, previously served as the CEO of Princess Cruises from June 2007 to November 2013 and its President from February 2004 to November 2013.

The DOJ recently fined Carnival Corporation $40,000,000 for widespread discharge of oily substances, falsification of log books and lying to the U.S. Coast Guard regarding five cruise ships operated by Princess Cruises over an eight year period from 2005 through 2013. The Carnival owned cruise ship operated by Princess Cruises which were involved in the scandal are the Caribbean Princess, Star Princess, Grand Princess, Coral Princess and Golden Princess.

The issue arises what the cruise executives knew about the long standing "magic pipes" and financial irregularities associated with certain Princess Cruise ships having lower operating costs associated with not having used the vessels’ oil-water separators and avoiding the costs associated with offloading and disposing the waste oil in shore-side facilities. Did these executives really have no idea that these Princess ships were engaged in these environmental crimes?

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The Securities and Exchange Exchange Commission reported this past week that the president & CEO of Norwegian Cruise Line Holdings Ltd ("NCLH"), Frank Del Rio, bought 83,498 shares of NCLH at an average price of $35.94 a share. (Photo below, right, during interview on CNBC).

The transaction took place on on August 31, 2016.  The total cost of cruise stock purchased was $3 million. 

The price of the stock decreased to $35.61 by the end of the week. It is at a 52 week low. 

It was widely reported earlier last month that NCL had slashed its earnings forecast for this year and announced that it would miss its profit target for next year, because of "continued weak demand" for European travel, Brexit’s impact on the pound, and some U.S. consumers reconsidering Frank Del Rio NCLMediterranean cruises following ISIS-inspired violence worldwide.

Analysts say that its been a "choppy year" for the cruise industry in general, and for shares of Norwegian Cruise Line in particular. NCLH stock reportedly "retreated to levels last seen in mid-2014." Frank Del Rio’s $3 million cruise stock purchase, according to Wolfe Research analyst Jared Shojaian, is "the largest open market purchase by a cruise-line executive in history."

Bloomberg says that Del Rio is attempting to demonstrate confidence in NCL to "sail through choppy waters."

It is a move similar to Royal Caribbean’s Chairman Richard Fain who bought 29,190 shares of RCL stock, in a series of trades for an average of $68.5161 per share, worth nearly $2,000,000. Cruise executive Fain made the transaction shortly after his cruise line’s stock price dropped substantially following the release of Royal Caribbean’s second quarter earnings. But in Fain’s case, unlike Del Rio’s, the cruise stock quickly bounced back over 6.5 %, earning the cruise executive a one-day profit of around $140,000. 

Del Rio certainly has boatloads of money to buy stock. In 2015, he received almost $32,000,000 in total executive compensation.

The SEC states that he directly and indirectly holds 919,173 worth of his cruise line stock. The SEC forms reveal he owns 451,171 shares directly. He indirectly owns 27,875 shares through a family trust and the SEC forms state that he indirectly holds 304,373 and 135,754 shares through investment limited liability corporations.  The total shares are worth over $34,000,000 at the current depressed stock prices. The Norwegian Cruise Line stock price hit a high last year of $64.27 a share which, at that price, would be worth a total of nearly $60,000,000 to Del Rio.

It’s no wonder that cruise passengers freak out when NCL nickel and dimes them with room service charges, increased gratuties and high-end restaurant cover charges.

Yes, cruise executives pocket an obscene anount of money. It’s funny money, I say, at a time when crew members are working harder and longer than ever before for less and have no job security.  

Interested in "fat cat" cruise executives? Read Andy Stuart – No Wonder He’s Smiling (NCL), Micky Arison Sells $433,700,000 Worth of Carnival Stock (CCL), and Cruise Executive Richard Fain Hits the Jackpot Again (RCL). 

Photo Credit: CNBC

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Richard FainYesterday, Royal Caribbean’s Chairman and CEO Richard Fain bought 29,190 shares of RCL stock, in a series of trades for an average of $68.5161 per share, worth nearly $2,000,000, according the to an article in Seatrade and SEC forms.

Today, with the RCL stock up over 6.50% from yesterday’s close, his $2,000,000 worth of shares purchased yesterday is now worth $2,139,627, for a nice one-day profit of around $140,000.

The SEC forms indicate that he owns 1,068,881 RCL shares directly and 426,912 indirectly which at the current price of $73.30 is worth $109,6416,269.  

Mr. Fain purchased the stock one day after his company’s stock price dropped more than 6% following the release of the cruise line’s second quarter earnings. 

Mr. Fain previously sold 80,516 shares of RCL stock last October at $98.80 per share for a total value of $7,955,335.00.

Mr. Fain collected $9,388,569 in total compensation last year.

Interested in the issue?  Read: Cruise Executive Richard Fain Hits the Jackpot Again.

Photo Credit: Linkedin