Cruise giant Carnival in storm over £11m pay deal

Cruise operator Carnival faces a backlash from shareholders over its chief executive’s bumper pay deal despite the company receiving Government support and laying off staff. 

Investors in the world’s largest cruise company – which owns lines including Princess Cruises, Seabourn and P&O Cruises – are preparing to vote against its pay policy at its annual meeting on Friday. It is likely to be among the first in a wave of shareholder rebellions as Britain emerges from the pandemic. 

Carnival’s chief executive Arnold Donald was given a package that could pay out as much as $15million (£11.4million) including a $6million bonus, according to the annual report. 

Troubled waters: Carnival’s chief executive Arnold Donald was given a package that could pay out as much as $15million (£11.4million) including a $6million bonus

One fund manager said she was uncomfortable with the pay arrangements after the company took £25million in Government-backed Covid loans in June 2020 and furloughed staff. Other bosses facing scrutiny over pay last night include:   

• Alison Brittain, chief executive at Premier Inn owner Whitbread, who is set to be handed a bonus of more than £700,000 deferred from last year. The company received £370million from the taxpayer during the pandemic;
• Barclays’ outgoing finance chief Tushar Morzaria who is facing calls for his bonus to be clawed back after an ‘error’ that cost the bank £450million; 
• Sebastien de Montessus, boss at Endeavour Mining, who was awarded $10million in financial assistance as the company moved to its new London HQ. 

Carnival was badly affected after cruises ground to a halt in 2020. It also came under the spotlight when 3,500 passengers were stuck on its Grand Princess liner due to Covid. The company plunged into a $10.2billion loss in the year 2020. That shrank to $9.5billion last year. 

One of Carnival’s biggest shareholders told The Mail on Sunday that she would vote against the pay plan. She added: ‘I wouldn’t be surprised if they got a high vote against them. They have laid off employees, they’ve taken money from Government and they’ve not paid dividends.’ 

Institutional Shareholder Services, one of the biggest advisers to large pension funds, said it had ‘material concerns’ with Donald’s pay package. 

Carnival said: ‘Our required filings…do not represent what our CEO actually received in any given year since we operate in a pay for performance model where most of his CEO pay is at risk.’ However, a company filing last month suggests he earned at least $11million. 

Whitbread’s Alison Brittain has come under fire for her deferred £729,000 bonus, which was delayed last year amid uproar from shareholders, politicians and activists. She defied calls to scrap the bonus entirely, despite huge losses and taxpayer support. 

Her company has claimed around £370million from taxpayers in furlough cash and business rates relief – none of which has been paid back. She is in line to receive the bonus in the coming weeks on top of her £895,000 salary. She may also receive a separate bonus based on the most recent year’s performance. Whitbread said the bonus is ‘subject to board approval’ this month and it is ‘too early to comment’. 

Luke Hildyard, of the High Pay Centre, said: ‘It’s truly staggering that the Whitbread board sees nothing wrong with taking hundreds of millions of pounds of public money with one hand and then doling out a multi-million pound pay package to an already extraordinarily wealthy CEO with the other.’ 

It comes as the FTSE 100 group kicked off a search for Brittain’s replacement. It has held talks with candidates who could replace her as soon as next year. 

Elsewhere, Tushar Morzaria at Barclays is facing calls for his bonus to be stripped. The bank revealed last week it had exceeded its limit on selling certain investment banking products in the US. The blunder cost it £450million and forced the lender to defer a £1billion share buyback. A longstanding shareholder told the MoS that Morzaria should have his bonus clawed back. Barclays declined to comment. 

FTSE100 gold miner Endeavour Mining almost doubled the pay packet of its boss last year to keep him in post. President and chief executive Sebastien de Montessus – whose takings for 2021 hit £17.3million – was granted a $10million ‘one-off award’ when the firm relocated from Toronto to London. It said this was to prevent him being ‘financially disadvantaged’ by the relocation.

Additional reporting by Calum Muirhead     

This post first appeared on Dailymail.co.uk