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Norwegian Cruise Line Holdings Ltd. (NCLH) reports that its CEO Frank Del Rio’s total compensation for 2017 was $10.5 million.  

Cruise executive Del Rio received compensation valued at $2.9 million in 2016, down from almost $32 million in 2015. According to Seatrade Cruise News, Mr. Del Rio received compensation valued at $31.9 million in 2015, including nearly $17.8 million in stock options and $10.3 million in stock awards. His cash income was about $4 million including a salary of over $1.8 million, and a bonus of $1.9 NCL CEO Frank Del Riomillion. Other compensation of $140,651 included a cash automobile allowance, tax preparation service and a country club membership.

HCLH’s first quarter returns for this year include revenues of $1,293.4 million, and a 13.1% increase in passenger ticket revenues to $889.87 million. 

In an article in Skift today titled Norwegian Cruise CEO Sees No Signs of Recession, Del Rio disputed  the standard worry among cruise industry investors these days "that a recession might loom as the global fleet is growing, potentially leading to costly new ships with a public too cash-strapped to sail on them." 

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Interested in this issue? We suggest reading:

NCL CEO Del Rio on the Norwegian Breakaway Bomb Cyclone Fiasco: "Weather Can Be Unpredictable . . . (It’s) All Good." 

NCL Imposes Keelhauling to Motivate Crew Members.

Photo credit: Frank Del Rio – Mark Elias/Bloomberg via Getty Images and Storify.

NCL Holdings president and CEO Frank Dek Rio rang the bell this morning at the New York Stock Exchange in celebration of the five year anniversary of NCL’s listing. Del Rio was later interviewed by CNBC when he was asked about cyclone Grayson, often called the “bomb cyclone” storm, which terrorized the passengers aboard the Norwegian Breakaway as it sailed into the storm while heading back to New York last week.

Smiling, CEO Del Rio stated this morning (video link here) to a national television audience:

NCL Cruise CEO Frank Del Rio  . . . weather can be unpredictable . . . and that’s what happened this weekend . . . the great news is our ship is back in the Caribbean carrying 4,000 happy cruisers . . . so . . . all good. 

Meterologists all agree that the storm was perfectly forecasted well in advance. Many of the traumatized passengers on the Breakaway felt that NCL’s priority was to get back to port in New York to pick up new passengers so NCL would not lose any money. (You can read about NCL recklessly sailing into the storm in this article by Mashable).

Del Rio’s insensitive, flippant comments are typical for this greedy cruise CEO, who made $31,900,000 in 2015 alone.  Last year, he told the audience at last year’s Seatrade Global conference that he loved fewer regulations under President Trump because “they make us money.” In 2005, he defended NCL’s increase in gratuities by saying “every dollar increase in yield translates to approximately $15 million to the bottom line.” And in 2005 at the Miami Cruise Shipping trade show, he told the audience that “Libya, Syria, Egypt, and Lebanon could be more lucrative than Cuba.” (I couldn’t help tweeting at the time “have you heard of ISIS?”) The next day, fanatics targeted cruise-ship passengers who sailed into the Capital of Tunisa, slaughtering and injuring 38 passengers.

I posted Del Rio’s interview on our Cruise Law News Facebook page, and quickly received the following comments:

  • Weather in the 21st Century is not ALL that “unpredictable.” Responsible Officers have to get up to date conditions and forecasts and make responsible decisions based upon that information. That “responsible decision ” would NOT have been to sail through the conditions the Master took that ship through. “Responsible Corporate Management would not have embarked passengers or planned port calls with passengers embarked, for Mid Winter cruises from Northern latitude Atlantic ports such as New York in this season. Greed can be the ONLY reason for such actions.
  • Clearly, he is totally out of touch and lying through his teeth. The weather had been predicted days prior.
  • Admit nothing deny everything. What a putz.
  • Fat Cat personified.
  • That ship should have cancelled the cruise with the advance weather report they had.

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Photos/Videos: CNBC.

Opening Bell, January 11, 2018 from CNBC.

Captain Kirk William Shatner, who played Captain Kirk in the 1960 classic science fiction television series Star Trek, reportedly recently urged Norwegian Cruise Lines (NCL) to stop offering "swim with dolphins" excursions on its upcoming Star Trek themed cruise.

According to the Hollywood Reporter (THR), Mr. Shatner is hosting the "Star Trek: The Cruise" voyage aboard the Norwegian Jade this coming January. He and the animal rights group, People for the Ethical Treatment of Animals (PETA), asked NCL to end the swim-with-the-dolphins outings supported by the cruise line. He wrote a letter to NCL’s CEO Frank Del Rio, saying: 

"Aboard the USS Enterprise, it was Captain Kirk’s duty ‘to explore strange new worlds, to seek out new life and new civilizations’ in order to advance and diversify our own. The exploitation of any species for profit and entertainment would have violated the Prime Directive. 

THR writes: "Shatner argued he’s ‘happy’ his fans can sail on the themed-Norwegian Jade voyage, but insisted condemning captive animals to a ‘lifetime of suffering’ for entertainment cannot be justified. Surely, Star Trek fans would appreciate the decision to allow dolphins to remain in the wild — and prosper." 

NCL, of course, could not be reached for comment, according to the article.

NCL was last in the news for its exploitation of rare macaws in its development in Belize at Harvest Caye. The cruise line reportedly obtained numerous birds (toucans and other macaws) and animals and reptiles from the Belize government from the wild and/or rescue and rehabilitation centers for NCL Frank Del Rio display in cages for the benefit of cruise visitors. 

The prospect of CEO Del Rio responding to the commander of starship Enterprise? Between slim and none, in my opinion. Del Rio, who collected over $30,000,000 as CEO for NCL in 2015 alone, has a well deserved reputation for looking for every possible way to put money in the cruise line’s coffers. 

NCL is just one of many cruise lines which sell exploitative swim-with-the-dolphins excursions to its guests.

Del Rio is probably the least likely cruise executive "to boldly go where no other cruise CEO has gone before."

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Credits: Captain Kirk – Star Trek.com; Frank Del Rio – Mark Elias/Bloomberg via Getty Images and Storify.

A reader of Cruise Law News sent me a article appearing today in the British newspaper, Daily Mail, titled Grandmother, 83, is kicked off her 6-star cruise for having a panic attack: Dementia sufferer and her veteran husband claim they were thrown out of their £8,000 suite after she fell ill.

84 year-old grandmother Marguerite Hayward was traveling with her husband, war veteran Fred Hayward, on board the Regent Seven Seas Cruises Explorer when she awoke late one night suffering from a panic attack linked to her dementia. The ship doctor and nurse responded to the incident along with the chief of security who appeared in the couple’s luxury suite, reporting yelling at Mrs. Hayward to “keep quite,” according to the tabloid. The medical team injected Mrs. Hayward with a sedative and she Regent Seven Seas Cruises Explorerquickly fell asleep “with her husband cuddling her.”

The following morning, Ms. Hayward appeared “calm and relaxed,” remembering nothing about the preceding night’s events. The couple was about to go to breakfast when the ship’s officers summoned them to a meeting. The officers informed them that the ship had reported the incident to the home office in Miami which ordered the couple to immediately leave the ship.

The Haywards were handed a medical bill from the ship infirmary of over $1,300 and then, after quickly packing, ordered into a tender to be taken ashore to the Italian port of Sorrento. The ship doctor reportedly informed the Italian doctors that he suspected that Ms. Hayward was suffering from “paranoid schizophrenia,” a diagnosis which Mr. Hayward denied applied to his wife.

The Italian doctors put Mrs. Hayward on a drip and placed her on oxygen, and she quickly became unconscious, according to her husband. The Hayward’ son learned of his parent’s plight and traveled to the hospital in Sorrento where he found his mother “sedated, on a drip and wearing a t-shirt covered in blood.” Her son arranged for Mrs. Haywards to be flown via air ambulance back to the U.K, where she was hospitalized for stress and trauma, with severe bed sores and extensive bruising.

The Haywards’ sons have written to CEO Frank Del Rio, a cruise executive who has earned a reputation of penny-pinching and being indifferent to bad press, who reportedly did not reply.

This is not the first time that a cruise line booted an elderly passenger with dementia and her husband off of a ship.

Several years ago, Celebrity sent a woman with dementia and her husband, involuntarily from the Millennium cruise ship. Like this case, the cruise line made no effort to communicate with the passengers’ family or emergency contacts, or to transport the couple back home. The cruise line essentially abandoned the couple ashore.

Carnival handled a similar situation better after the Carnival Legend disembarked a guest ashore in Cozumel after he had a “minor Alzheimer’s episode, leaving his stateroom alone at 4 a.m. for a cup of coffee.”

Carnival claimed that they found the husband disoriented and the ship doctor declared him to be a danger to himself, so the ship disembarked the couple off the ship at the next port. But when a news station contacted Carnival, the cruise line “quickly admitted that the situation was mishandled” and reimbursed the cost of the cruise and the airfare home.

The passenger tickets drafted by the cruise line’s lawyers state that the cruise lines can disembark passengers for any reason. However, from a public relations point of view, I would think that the couple should have been treated more sensitively and respectfully. The cruise line should have provided its guests, at a minimum, with transportation back home and a full refund of their costly fares.

Photo credits: Daily Mail

NCL KeelhaulingSources report that Norwegian Cruise Line will implement keelhauling as a means to motivate crew members to work longer hours on NCL cruise ships.

The ancient maritime form of punishment, once meted out to sailors at sea, involves being tied to a line and pulled along the keel, either from one side of the ship to the other, or under the keel from bow to stern. It dates back to the ancient Rhodian Maritime Code (around 800 B.C.) and was used as late as the 19th century by the Royal Navy and the Dutch Navy until it was abolished as cruel punishment. 

NCL CEO Frank Del Rio, who is credited for the new motivational tool, says that he came up with keelhauling after watching his guests participate in the walking "The Plank" for a fee on the Norwegian Getaway.  

Cruise executive Del Rio, who boasted of the idea at the recent Seatrade Miami convention, was quoted as saying "NCL needed something to create motivation for our ship employees while creating excitement for our guests!" Del Rio said that NCL will charge passengers a fee of $19.99 to watch the crew members being keelhauled under the NCL ships. 

NCL has imposed every imaginable extra charge on its passengers, including increased room services charges, automatic gratuities and restaurant cover charges, which are diverted away from the crew Walk the Plank - NCLmembers to cover executive compensation. He said at an earning conference last year "… we have looked across the fleet to identify areas where marginal changes can improve the bottom line… this is a bold move which differentiates us from our competitors and will put money into NCL’s pockets. 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."

NCL is expected to seek a trademark on NCL Keelhauling, as a play on its NCL Freestyling slogan.

In-house lawyers at NCL, who did not wish to be identified, expressed concern that keelhauling probably violates 18 U.S. Code § 114, which prohibits "maiming within maritime and territorial jurisdiction."  Del Rio said that the U.S. federal statute applies only to state territorial waters, whereas the NCL fleet spends the majority of time in international waters. 

"Getting our crew members to work 110% remains our goal," said Del Rio who collected 350 million dollars, himself, last year. "Tying the crew to the mast and publicly flogging them with a cat-o’-nine tails remain options, if we can’t get more work out of our crew."  

Have a thought? Please leave a comment below or join the discussion on our Facebook page.

Interested in this issue? Read similar articles:

Breaking News: Carnival Incorporates in the U.S. and Subjects Itself to U.S. Tax, Labor, Wage, Safety & Environmental Regulations.

Royal Caribbean to Homeport Empress of the Seas in Havana.

Photo credit: Walk the plank – NCL; Keelhauling – Sea of Thieves

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.

Royal CaribbeanTwo popular cruise blogs, the Royal Caribbean Blog and Cruise Fever, are reporting that Royal Caribbean will soon begin to charge its guests a fee of $7.95 for room service from the All Day Menu and the American Section of the breakfast menu.

Cruise guests reportedly will still be able to order complimentary continental breakfast without incurring additional fees. Guests in suites will not be charged service fees.

The service fee will begin on sailings after March 27, 2017.

Royal Caribbean announced the change on its Twitter feed, much to the disappointment of its followers.

Royal Caribbean follows other cruise lines, like NCL (Read: NCL Gouges Guests with New Charges), which also charges a $7.95 room service charge. Carnival also announced a similar fee several years ago.

Most of the major cruise lines have been accused of nickel-and-diming passengers. Many cruise passengers have complained that room service should be included in the traditional inclusive-cruise fares.

Don’t think for a second that the new room service charges are for the hard working crew members.

Marginal increases in services like room service puts big bucks into the cruise executives’ pockets.

NCL’s CEO Frank Del Rio said in May 2015: “… we have looked across the fleet to identify areas where marginal changes that are commensurate with market conditions 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.”

Del Rio collected nearly $32 million in compensation that year (2015).

In June of 2015, Royal Caribbean hiked the automatic daily gratuity on its cruise ships by nearly 8% to $12.95 per person. USA Today wrote at the time that with this increase, a family of four will pay more than $350 in service charges on a typical seven-night cruise — one of the highest levies in the cruise business.

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Photo credit: Jim Walker

Update: We are receiving a number of humorous comments to the article on our Facebook discussion, including this one: “Next thing you know they’ll put coin operated toilets in all the cabins.”

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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A couple of days ago, Cruise industry News reported that, according to NCL’s 2015 Annual Report, Kevin Sheehan received a severance package from NCL last year totaling $13,400,000 (million). 

Mr. Sheehan resigned unexpectedly in January last year amidst some controversy.   

The annual report in question, which you can see here, specified a "a total severance expense of $13.4 million of which $8.2 million was due to the acceleration of the equity-based awards which was Kevin Sheehanrecorded in January 2015." 

In an industry which includes cruise CEO’s who make the big bucks like multi-billionaire Micky Arison and multi-millionaire Richard Fain, perhaps this is just business as usual.

But it must be hard to swallow for some crew members who work around the clock for peanuts, and without any real benefits. Crew members can be fired without cause. There is a saying that a cruise line can fire a crew member for any reason – good reason, bad reason or no reason – without legal consequence.     

NCL has suffered over the year from the perception even amongst cruise fans of being the king of "nickel and diming" its customers. But when it’s time to make a deal with a CEO to move him out of the way without a fuss, NCL will not hesitate to pay millions. 

Photo credit: @CruiseNorwegian via CruiseInd 

March 17, 2016 Update: Proxy statement explaning, among other thing, what Mr. Sheehan’s financial benefits he was entitled to if he was terminated with cause versus without cause. 

March 18, 2016 Update:  Many crew members seemed to like Mr. Sheehan and not the CEO who replaced him, Frank Del Rio, who many describe as an arrogant and cost-cutting boss. Here’s one of many comments sent to me on Facebook:

"It doesnt matter how much Mr Sheehans got. He is such a nice and approchable person. I had the chance to meet his 3 years ago in the NCL Sun,h e came to my side stand to greet and thank us for our hard work. Unlike Mr Del Rio, who comes to NCL changing evwrything, all our benefits. The company is going down for the crew. Del Rio came to NCL PEARL when i was there, stood therw for 2 hours and put the ship up side down. So arrogant and unpolite to the crew, didnt even smile at us. Not even a "well done guys, thank you for your hard work." NOTHING. I’ve been with NCL for the past 3 years. I will appreciate if you keep my name private. I may lose my job if anything comes to public."