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Executive Salaries at Royal - readjusted?

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20 minutes ago, Seville2Cabo said:

What would you have done different?  The cruise industry has significantly different and difficult issues with the pandemic then any other industry.  Disney just said “we are closed“ “employees don’t show up tomorrow”. Airlines are still flying.

I’m not sure what I would have done different, but remember the executives work for the share holders, not the customers.  And their bonus is based, I assume, on share price, ROI and other financial items, but probably not how fast refunds happened.  If the company survives without bankruptcy, he has probably done a great job.

 

    To start, a truly competent executive would have looked past the next period's P & L back in February and March. Surely Duffy and the folks at HAL and especially Princess were more egregious in their recklessness, but it took a lot of blinders to ignore reality & keep pushing out cruises.
    The refund debacle is another short-term "right move" that has long time awful consequences. (Though I suppose it could be argued that this is the story of post-1970s American business ... make next month's numbers at any cost, and worry about the damage to the brand later on. )

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8 minutes ago, EscapeFromConnecticut said:

  The refund debacle is another short-term "right move" that has long time awful consequences

Not sure what the long term consequences are.  People will forget after the CV issue is over and in the mean time, RCCL can survive.  

Now canceling cruises yet sound like a good strategy to me, as is pushing cruises down the road. And the lift and shift is a win win and seems to be a pretty good strategy and management decision.  Again, can’t think of any other industry ever that has the obstacles that the cruise industry has now to survive.  And although you don’t like what they are doing from a customer point of view, it seems to make a lot of sense from a shareholder point of view and that is what he is paid to do.  

People will cruise again, and remember the old saying.  You don’t have to run faster than the bear, just faster than others begging chased - translated - RC just needs to do better than the completion (and from what I read they are) and will get most of their customer back and some from other lines.  

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1 hour ago, not-enough-cruising said:

I really don’t think that management failed miserably. Considering what they are up against I’d say, from a business standpoint, they have done remarkably well. 

Over $11 BILLION in debt at the end of 2019 and growing by leaps and bounds.

 

A new ship a year?  Costly refurbs at every turn?  How does that look now?

 

"Remarkably well??? 

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Just now, yogimax said:

Over $11 BILLION in debt at the end of 2019 and growing by leaps and bounds.

 

A new ship a year?  Costly refurbs at every turn?  How does that look now?

 

"Remarkably well??? 

Prior to the shutdown, record profits and dividends, leading the competition in exclusive offerings........

Currently keeping the company “afloat”, utilizing inventive strategies to facilitate income, has the stock rebounding (better than anyone expected) 

 

Yes, they are doing remarkably well 

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40 minutes ago, Seville2Cabo said:

What would you have done different?  The cruise industry has significantly different and difficult issues with the pandemic then any other industry.  Disney just said “we are closed“ “employees don’t show up tomorrow”. Airlines are still flying.

I’m not sure what I would have done different, but remember the executives work for the share holders, not the customers.  And their bonus is based, I assume, on share price, ROI and other financial items, but probably not how fast refunds happened.  If the company survives without bankruptcy, he has probably done a great job.


What would I have done different?, just about everything. The first cancellation, they waited to the day before with no consideration to the people who have to, or want to, go a day or two early. They couldn’t care less about the inconvenience, and extra cost, that could have been avoided. The way they have treated the crews should be a major embarrassment. The lack of transparency is a new low. The time taken for refunds is inexcusable. In this era, with computers it should be just a nonissue. When I book, the credit card is charged almost instantly. If I get a refund on obc not used, it’s it usually done in one or two days.

If the company avoids bankruptcy, at the very best, maybe the executive board might be able to keep their jobs. If their bonuses are based on share price, or stock price, they should owe the company money. They are a big reason for it, they chose to spend their mountains of cash on new ships and renovations rather than having a backup fund. They couldn’t have avoided borrowing money but the amount would have been a lot less. Sort of like buying insurance.

 

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5 minutes ago, grandgeezer said:


What would I have done different?, just about everything. The first cancellation, they waited to the day before with no consideration to the people who have to, or want to, go a day or two early. They couldn’t care less about the inconvenience, and extra cost, that could have been avoided. The way they have treated the crews should be a major embarrassment. The lack of transparency is a new low. The time taken for refunds is inexcusable. In this era, with computers it should be just a nonissue. When I book, the credit card is charged almost instantly. If I get a refund on obc not used, it’s it usually done in one or two days.

If the company avoids bankruptcy, at the very best, maybe the executive board might be able to keep their jobs. If their bonuses are based on share price, or stock price, they should owe the company money. They are a big reason for it, they chose to spend their mountains of cash on new ships and renovations rather than having a backup fund. They couldn’t have avoided borrowing money but the amount would have been a lot less. Sort of like buying insurance.

 

Although you said everything, you did not say specific actions you would take.   So for background, we (wife, I and another couple) were stranded in Santiago Chile when X canceled 12 hours before boarding.  Yes we were pissed and yesterday, 60 days later, we got our refund. (Still $900 short).  Will still cost us for the airfare home.  

 

But, although I never reached board level, I made too many board presentations and owned 3 businesses (bought distressed and sold for profit).  Customer impact rarely comes up. Share holder value comes up and impact on current and future earns and share price.  Sorry but that is reality.

 

Should they fire the CEO of Exxon because the price of oil is down?  Anyone can manage in good times, it’s how you manage in a crisis that defines the great one and it is too soon to give a report card, but so far they are surviving, and that is better than most.  You, as a customer may not like their actions, but they do not work for you.

 

Since you seemed to have prepared for the virus, I assume you sold all your stocks and took short positions the end of last year. 

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7 hours ago, EscapeFromConnecticut said:


Actually, compensation is always the business of customers - because we pay for it. 
For every RCI nickle-and-dime deal that RCI ever pushed through, a percentage was going to Fain's bonuses. 
 

In this case, RCI came out marginally better than the CCL family - it's poor Princess that has become the public face of the industry's catastrophic COVID decisions. But there's nothing in the RCI senior execs' performance to justify even half of those chart figures.

By that logic everyone's salary is everyone's business because in one way or another we all pay each others salaries. So, care to share?

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8 hours ago, EscapeFromConnecticut said:


Actually, compensation is always the business of customers - because we pay for it. 
 

This is the winner for most ridiculous post

post of the weekend 

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6 hours ago, SRF said:

 

Read the table.

 

SALARY is $1.3 million.

 

The rest is based on stock and performance.  Unlikely to make much in those columns this year.

Don't be deceived.  What corporations often do is cancel out the old stock option price (say $100) and institute a new one (say $20).  As I have said, the board often works hand in glove with management.

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1 hour ago, BND said:

By that logic everyone's salary is everyone's business because in one way or another we all pay each others salaries. So, care to share?


"Everyone" does not direct policy, set strategy or oversee planning.

This, of course, is why SEC filings include such information about compensation at the level of Fain and the others, but don't cover the "everyones."


And of course, the average compensation for the "everyones" at a typical corporation is a tiny faction of the top #s. (Didn't always used to be like that).  As both consumers and citizens, we see the corporate faces of the front-line staff we encounter - yet we also know they call no shots. 
 

So - I wonder what it is that bring you to this conversation. Maybe an opinion about public disclosure of executive compensation, or feelings about SEC documentation, or possibly just a general interest? Such a range of subjects we get into on CC, eh?

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1 hour ago, not-enough-cruising said:

This is the winner for most ridiculous post

post of the weekend 


  What a remarkably nuanced, polite and insightful response. 💗
 Congrats. The judges award you four Hannitys and a Breitbart.

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12 hours ago, yogimax said:

Don't be deceived.  What corporations often do is cancel out the old stock option price (say $100) and institute a new one (say $20).  As I have said, the board often works hand in glove with management.

 

That is still not SALARY.

 

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Huh?  Stock options are indeed a part of the salary package.

2 hours ago, SRF said:

 

That is still not SALARY.

 

Huh?  Stock options are indeed a part of the salary package, often a huge part.  They can literally become worth millions of dollars.  Indeed, they often exceed the base salary.  To think they are not salary is simply false.

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40 minutes ago, yogimax said:

Huh?  Stock options are indeed a part of the salary package.

Huh?  Stock options are indeed a part of the salary package, often a huge part.  They can literally become worth millions of dollars.  Indeed, they often exceed the base salary.  To think they are not salary is simply false.

Stock and bonus is usually part of a compensation package.  Salary is part of the package as well.  Never heard it called a salary package.  AND - many times the stock and performance bonus are achieved by meeting performance goals.  Giving Stock at a price point give the executive “skin in the game” and allows him/her to make more money if the company is successful (usually measured by the stock price)

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10 hours ago, Seville2Cabo said:

Giving Stock at a price point give the executive “skin in the game” and allows him/her to make more money if the company is successful (usually measured by the stock price)

 

Using that standard and considering RCI's performance this spring, Fain should be scrubbing the washroom sinks on Caribbean Way for $12.50 an hour.

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21 hours ago, yogimax said:

Huh?  Stock options are indeed a part of the salary package.

Huh?  Stock options are indeed a part of the salary package, often a huge part.  They can literally become worth millions of dollars.  Indeed, they often exceed the base salary.  To think they are not salary is simply false.

 

They are COMPENSATION, not SALARY

 

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1 hour ago, SRF said:

 

They are COMPENSATION, not SALARY

 

So, what's your point?

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On 5/17/2020 at 2:13 PM, Seville2Cabo said:

Stock and bonus is usually part of a compensation package.  Salary is part of the package as well.  Never heard it called a salary package.  AND - many times the stock and performance bonus are achieved by meeting performance goals.  Giving Stock at a price point give the executive “skin in the game” and allows him/her to make more money if the company is successful (usually measured by the stock price)

Good point.  I've never heard the term "salary package" either.

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Q1 earnings to be discussed at 10:00am EST.   This could be an indicator of future compensation tied to performance. 

 

"Royal Caribbean Cruises has scheduled a conference call for 10:00 a.m. Eastern Daylight Time, Wednesday, May 20, 2020, to provide a business update and discuss first quarter earnings.

The call will be available online at the company's investor relations website, www.rclinvestor.com. 

To listen to the call by phone, please dial (877) 663-9606 in the US and Canada.  International phone calls should be made to (706) 758-4628.

There is no passcode or meeting number. A replay of the webcast will be available at the same site for a month following the call."

 

https://www.cruiseindustrynews.com/cruise-news/22968-royal-caribbean-quickly-schedules-q1-earnings-call-for-wednesday.html

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On ‎5‎/‎18‎/‎2020 at 5:39 PM, time4u2go said:

Good point.  I've never heard the term "salary package" either.


"Salary packages typically include your base salary as well as additional benefits, incentives or rewards, such as superannuation, annual and sick leave, car allowance or bonuses. With a salary package, money is usually deducted from your salary before tax for these items or services."

 

So you want to use "compensation."  Fine... no problem.  But this is not about semantics.  Again, what's the point you are trying to make, beyond "semantics?"
 

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Posted (edited)

On a great year they get paid more, on a bad year they get paid less. The Pandemic was not caused by a Cruise Line executives.  It is a for profit business, not charity. In good times they get rewarded and in bad times they don’t.
 

I find the fascination over of the executive package size rather peculiar.  Some will have bigger packages, and others not so much. It’s not all about how much compensation they have, it’s how they use it. 

 

 

Edited by A&L_Ont

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Posted (edited)
11 hours ago, yogimax said:

Again, what's the point you are trying to make, beyond "semantics?"

It's politically correct for a CEO to claim that they cut their salary in tough times, when most of their compensation comes in different forms (and the lay person doesn't know that). Most folks don't know Fain was compensated $14M last year, but may feel good when the headline says that he took a huge cut to his $1M salary.

Edited by Biker19

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The point is that the entire column called Stock Awards could end up being worthless.  If that entire column was typical stock options, let's assume that Fain received 80,000 options at $110 per share in 2019 (rounding up to a stock award of $8.8M).  For every $1 that the stock price goes up (until the options expire or he sells), due in part to his leadership, he gets $80K.  Shareholders also benefit, so everyone wins.  He didn't actually receive $8.8M in cash or stock that can quickly be converted to cash...he received options (and maybe Restricted Stock Units or similar) that were valued at $8.8M that he can parlay into significant money in the future if the company does well and the stock price goes up.

 

If the stock drops however and stays below $110 per share until the options expire, which would usually be as a result of poor leadership, those $8.8M in options are worthless.  His $14M+ in total compensation in reality is more like $5M+.  Not sure what's in the $4M in non-equity incentive plan, but it is likely also worth much less since it's an incentive plan.  The only truly "fixed" part of his compensation, that is the same no matter what the company does, is worth about $1.3M.  As Andrew said, actual compensation is highly variable based on performance. 

 

As a shareholder (I don't have any RCL stock), I like the idea of a CEO having incentive based compensation.  He/She makes money for themselves by making money for me.  Much better than a CEO making boatload of money while the stock price tanks.  A salary of $1.3M is not a lot for a $2.4B company.

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