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In a year in which Norwegian Cruise Line Holdings Ltd. lost $4 billion and employee salaries were cut by 20% as the cruise operator struggled to deal COVID-19-related shutdowns, Chief Executive Frank Del Rio’s total pay more than doubled to over $36 million.
The company NCLH,
The biggest part of the increase was “all other compensation,” which rose to $10.48 million from $270,040.
Included in that increase was $10.27 million from a “prior contract payout,” which was owed under his previous employment agreement that was amended in August 2017, the filing showed.
Also included was a $100,000 “travel expense allowance,” $20,000 for “country club membership” and a $12,000 “personal allowance,” all the same as the year before. Meanwhile, the 401(k) match increased to $14,025 in 2020 from $13,700 in 2019.
Keep in mind that the “COVID-19 Action Plan” announced a year ago in the early stages of the pandemic included “suspended travel for shoreside employees across the organization” and “paused employer 401(k) match contribution.”
The action plan also included 20% salary reduction for shoreside employees, which when prorated led to Del Rio’s base salary being cut by $272,459, or 15%, to $1.53 million.
Instead, Del Rio received a $2.82 million “inducement bonus” in 2020, after not receiving any bonus the prior two years, that required Del Rio to stay with the company through 2021. If Del Rio leaves the company before year end for any reason other than a qualifying termination, he would be required to repay 100% of the inducement bonus.
Elsewhere in Del Rio’s 2020 pay package, non-equity incentive plan compensation was unchanged at $3.60 million, while the value of stock awards increased to $17.95 million from $12.20 million in 2019.
In February, Del Rio had said that 2020 was “without a doubt the most challenging year in the company’s 50 plus year history,” as the company swung to a net loss of $4.01 billion from net income of $930.2 million in 2019 and as total revenue dropped 80.2% to $1.28 billion.
A company spokesperson said in a statement Wednesday that Del Rio’s “annual run-rate pay” in 2020 was actually about $12.8 million.
“As part of total compensation, he received modified prior-year awards predominantly related to the U.S. government’s decision to rescind travel to Cuba, business impacts from COVID-19 and one-time payments related to his previous and new extended employment agreement,” the spokesperson said. “We believe these changes were in the best interests of the company and secured Mr. Del Rio’s continued invaluable expertise and critical industry relationships to drive our recovery from COVID-19.”
Norwegian Cruise’s stock rose 0.7% to close Wednesday at $31.31. It has rallied 19.5% amid a six-day win streak, and has climbed 23.1% year to date.
The stock has been rallying recently as investors saw the light at the end of a long tunnel. Norwegian Cruise said this week it was planning to restart cruise operations from U.S. ports on July 4, following its request that the Centers for Disease Control and Prevention (CDC) lift its Conditional Sail Order.
In 2020, the stock plunged 56.5%, after surging 37.8% in 2019. In comparison, shares of rivals Royal Caribbean Group RCL,
Among Norwegian Cruise’s other named executive officers (NEOs), total compensation in 2020 for Chief Financial Officer Mark Kempa increased 44.7% from 2019 to $5.79 million; for Executive Vice President, Vessel Operations Robin Lindsay rose 71.3% to $6.85 million; for Chief Executive Officer, Regent Jason Montague grew 58.7% to $6.36 million; and for CEO, Norwegian Harry Sommer rose 57.0% to $6.29 million.